Knowing how to stop a home repossession can help prevent an outright catastrophe. Unfortunately, evidence suggests that the vast majority of homeowners have no real understanding of how to stop a repossession from occurring.
Contrary to popular belief, most banks and lenders will do everything within their power to stop a repossession becoming necessary. Though it is typically the efforts (or otherwise) on the part of the debtor that will determine the outcome.
The better you understand the way a repossession works, the better your likelihood of being able to avoid a repossession if the worst should happen.
Repossessions occurs when a mortgage lender seeks authorisation from the courts to take possession of your property, in the event of non-payment on your mortgage or failure to keep to the terms of the mortgage. When entering into a mortgage contract, you grant the lender a certain stake (or level of ownership) in your property. Their ownership level decreases as you repay the loan, though the lender maintains the right to seek a repossession order at any time in the event of non-payment.
This means that even if you have repaid 85% or even 95% of your mortgage, your home could still technically be repossessed if you do not keep up with your payments. The basics of how to stop a repossession in the UK are relatively simple, but it is essential to take affirmative action at the earliest possible stage.
Banks and lenders rarely seek repossession orders without first considering all other viable options to resolve the issue. Where a bank chooses to pursue the repossession of a property, the process generally takes place as follows:
1. Mortgage Arrears
Missing the occasional mortgage payment is not typically grounds for repossession. You may face late payment fees or other penalties but your lender will usually give you fair warning, along with the opportunity to make up your repayments.
It is only when mortgage arrears become relatively serious that repossession proceedings begin. With regard to how to stop a repossession order being sought, it is vital to speak with your lender at this early stage to reach a mutually amicable agreement.
2. Court Order Application
This is where the lender makes a formal application to the courts to repossess your home, which involves a court hearing you must attend. The judge presiding over the case will hear evidence and listen to arguments on both sides of the dispute, ultimately determining whether or not to grant a repossession order.=
3. Repossession Order and Eviction
If the lender's application for a repossession order is successful, the occupant of the property will usually have a period of 28 days to move out. This may be extended to 56 days in some cases upon request or appeal.
It is important to note that all court costs incurred on both sides will be added to the borrower's outstanding debt, often significantly increasing the balance owed. Eviction occurs where the occupant of the property refuses or is unable to leave their home by the agreed deadline, at which point they may be physically removed along with their belongings.
Understanding how to stop the repossession of your home through constructive dialogue is essential for all homeowners. Nobody plans to fall into arrears or deliberately fails to meet their repayment obligations – hard times and financial shortfalls often cannot be predicted.
There are various options available for stopping a repossession becoming necessary, which for most struggling homeowners include the following:
1. Reach out to your lender
Major banks and lenders are often willing to stop repossession in its tracks, simply by discussing the issue with the borrower and coming up with a viable repayment plan. This could include a temporary suspension of your repayments until you get your finances back on track, a lower monthly repayment you can afford or anything else that allows you to gradually repay your debt. Acting early is essential as leaving things until the last moment makes it more difficult to reach an acceptable agreement.
2. Pay off some of your debt
You may be unable to pay off your arrears in full but simply offering to pay off at least some of your debt demonstrates to your lender that you are committed to meeting your obligations. Again, this should be discussed at the earliest possible stage to prevent repossession becoming necessary.
3. Consider a bridging loan
If your financial shortfall is strictly temporary, you could consider securing a short-term loan against your home. One example of which being a bridging loan, which can be issued in a matter of days and repaid in full within the subsequent few months. This opens up the possibility of repaying your outstanding mortgage balance in full, selling your home for its full market price and repaying your bridging loan in one lump sum. All remaining profits would be yours to keep, which could be used to finance a new home purchase when the time is right.
4. See if you're covered by mortgage protection insurance
It's always worth checking whether you are covered (fully or partially) by a mortgage protection insurance policy. Many homeowners enter into such policies when taking out a mortgage, though do not fully understand the extent to which they are covered.
Depending on the circumstances surrounding your financial shortfall, your mortgage insurance policy could cover your repayments to avoid home repossession entirely. For more information on short-term borrowing for covering urgent expenses and outgoings like these, book your obligation-free consultation with the team at UK Bridging Loans today.
Clients approach UK Bridging loans either directly or via introducers. Basic questions by way of a “fact-finding” process are used by UK Bridging Loans to determine if the lending requirements are a possibility.
An immediate yes or no answer is given and if suitable, a quotation is formulated and forwarded to the client, usually by email.
A formal offer is produced for any client wishing to proceed and forwarded for signature, again, usually by email.
Each client is visited at the security address for signature of the remaining loan paperwork, including a CH1, land registry charging order. We will also collect any additional pre-requested documentation.
The signed documentation is immediately sent to our underwriters. Our model is based on very quick completions as each deal is funded using all of our own money. On rare occasions we may request additional information.
Average completion from initial acceptance to pay-out is usually just a few days. We rarely require valuations or additional legal representation. The land registry charge is removed once the bridging loan is repaid.
The applicant could be too old to obtain a standard high street mortgage as most mortgage lenders now prevent borrowing into what is deemed, “normal retirement age”.
The property may be in a condition where it is not suitable for mortgage finance and as such a Bridging Loan could be used to complete the purchase and any required work prior to refinancing.
The applicant may have some adverse credit, however minor, which was previously acceptable to lenders but now no longer fits the high street lending criteria.
The applicant may have difficulty proving income requirements needed for more regular finance. This may be due to poor self-employment records, a break from work or a reduction in self-employed workloads or overtime.
We offer quick turnaround with fast bridging loans and in cases will approve and get you the finance needed in 24 hours.
Funding provided for all manner of development needs, from light to heavy refurb or complete development build.
A bridging loan can be a good way to stop yourself falling into bankruptcy, given you an urgent cash injection when needed.
Business finance can be obtained through bridging finance and can be used for a variety of purposes for your business.
Consolidate your debts into one monthly payment by using a bridging loan to bring your finances back in to shape.
If you have been hit with an unexpected tax bill this can be a real strain on finances. Use bridging loans to pay your tax.
A bridging loan can be used to bring your mortgage out of arrears and stop the home from being repossessed in the process.
Our quick and easy bridging loan calculator can be used to easily identify the repayment on a bridging loan in just a few clicks.
Business Address: Office block 2, Kibworth Business Park, Kibworth Harcourt, Leicestershire, LE8 0EX
Telephone: 0116 366 6338
Email: contact@ukbridgingloans.uk