It is important to understand how you can stop house repossession if you are having financial difficulty or are struggling with mortgage repayments.
What Is House Foreclosure?
Your mortgage lender will obtain a court order for you to take possession of your house. This is known as house repossession. If you borrow money to purchase a house, the lender becomes a financial owner of your home. As you pay off the debt, this stake decreases.
What Happens When Your Home Is Repossessed By The Bank?
Below is the outline of the house repossession procedure.
Keep in mind that your lender may accept alternative repayment plans for your mortgage and arrears.
Missed Payments
Your lender will notify you if your mortgage payments are late. If you keep missing payments, your lender might continue to contact your about your payments.
Order Of The Court
Your mortgage lender will file a request for a court order to repossess you home.
Court Hearing
It is important that you attend to explain to your mortgage lender the reasons behind your missed payments and to present any suggestions to the lender.
Possession Order
If the judge rules for you, then you will have to sign a repayment agreement. You will be evicted if this agreement isn’t followed.
Eviction
If a possession or restraining order is issued, you must vacate the property by the deadline given by the judge. If you do not leave within this time, bailiffs are sent to you.
This House Is Being Sold
When your mortgage lenders have reclaimed ownership of the property they will then sell it to collect the debt. However, interest will remain due on the debt until the property is sold.
Repossession Of Your Home Is Not An Option
If your mortgage lender has threatened to start the repossession process against you, it is important to stop them from doing so.
Some things you can ask your lender include:
You can extend your mortgage term
You can change your type mortgage
A payment holiday is a temporary stoppage from making payments
Reductions in payments
Capitalizing arrears (adding to your total mortgage balance)
Voluntary House Repossession
The voluntary repossession can be avoided by avoiding a full foreclosure. However, you will still need to surrender your property to the lender.
How To Stop The Repossession Of Your House
It can be worrying to find a house repossession or order placed on your property. But, it’s possible to avoid repossession even up to the day that you are evicted.
Talking To Your Lender
You should have a fair amount time to sell the house or arrange another payment – even though your lender has applied to the court for repossession, it is still advisable to follow the instructions under “How to avoid repossession” above.
Contribute To Your Arrears
Even if your mortgage payments or arrears cannot be fully paid, it’s important to pay any amount that you can afford.
Rent Your Home
Renting your house could be an option when you are facing foreclosure or debt arrears. If you are unable to move, you might consider hiring a lodger.
Check If You’re Eligible For Financial Help
If you have experienced a major life-changing event that has left you in financial difficulty, it is worth checking if you may be eligible for any benefits.
Check Your Policy
These plans provide protection in the event of illness, an accident, or redundancy and allow you continue making your mortgage payments even if you are no longer receiving a steady income.
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