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Avoid Repossession

How to Avoid Reposession

If you end up struggling to pay your mortgage payments is essential that you stay calm and try to find a solution as soon as possible. Many people "bury their head in the sand" hoping that the problem will go away, however all this does is increase the chances of you being repossessed.

First thing you should is speak to your lender as soon as possible.

Your lender might be able to give you the following:

  • Change your repayment mortgage into a interest only mortgage (if on capital repayments)
  • Have a payment holiday
  • Have a payment plan for paying off the arrears on top of your existing mortgage payments
  • Add the arrears to the total mortgage loan amount (referred to as capitalising yours arrears)

If you spread the debt over a longer period of time this will mean that you will pay less today but more in the future.

If you have a mortgage of £255,000 on an interest rate of 6% and you had 10 years left to pay this back, this would mean capital and interest payments of roughly £2831 HOWEVER if you speak to the lender about extending this to 20 years (adding another 10 years to repay the loan) your payments will be £1827. That is roughly £1004 difference every month. This can be a great short term solution to not fall into mortgage arrears.

Alternatively...

Another option is to rent out your property. Lettings have dropped in most areas because of over supply and limited demand, especially because most people in the current market cannot sell there houses so they have opted to rent instead.

During the crash of the late eighties early nineties we remember many people handing back the keys to the bank. This is not advisable as the bank will still hold you liable to pay the mortgage back, and the government will regard you as making yourself voluntarily homeless.

Have you tried to sell your property via an estate agent? This is a common approach, but estate agents can generally take months to find a buyer that is quick and professional and they do not understand that when repossession is due being fast is everything.

Your final option should be selling to a cash buying company like us. We understand the repossession process inside and out, and can help you with various solutions to prevent  repossession. It might be worth having a no obligation talk with us about your circumstances - Call 020 7610 5566 or fill in an enquiry form to see how we can help.

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