How Many Months Before A Repossession?
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If you are in a position where you potentially face your property being repossessed, then it can be a stressful and serious situation; However, it isn’t one that will just happen overnight.
Repossessions can take many months and can be hard when you need to be proactive with your search.
This article is going to look into repossession as a whole and what it means to be in house repayments arrears.
What are mortgage arrears?
Mortgage arrears happen when you miss a payment of your mortgage and you have payments overdue on your property. In technical terms, a mortgage repayment goes into arrears when you first miss a payment. On the other hand, a handful of mortgage lenders give an unofficial period of around 15 days before they contact you about missing the payment.
Even if you do miss a payment and do not manage to pay straight away, possession action will not take place straight away. Lenders usually don’t want to repossess any of your possessions; they will want to use this strategy as a last resort.
Possession action will usually be taken to an action when you have missed at least three payments. Although, some lenders will postpone this even further than three payments.
Can you miss a mortgage payment?
Missing a single mortgage repayment will not result in your mortgage lender reposessing your house, but it will result in questions around why you have failed to make the payment. They'll typically contact you and ask if you are able to pay. It could also affect your credit rating.
Mortgage companies don't want to reposess your house, it's an expensive process, so missing a single payment they will usually be fairly understanding and work with you to try and resolve the issue.
What happens when you are in arrears?
Mortgage lenders can’t just turn up to your home and make you leave. There has to be a process followed beforehand. This is called Pre-Action Protocol for house repayments Arrears.
This process makes sure that you, the homeowners, are fully notified of what is happening. This therefore allows you to solve the issue before any of the repossession processes start happening.
Generally, lenders will give you around fifteen days to respond to any standard letters sent to yourself. If you are uncontactable then you will eventually be told that if you don’t pay the arrears to your lender, you will be taken to county court for the repossession of your house.
Pre-empting the arrears process
An approach you could consider, if you realise you are going to struggle to make a payment, is to speak to your lender before they contact you in the first place.
If you pre-empt the process by contacting your lender, it can often help lenders to see that you are approaching the situation with a lot of responsibility. It conveys you are more committed to paying off any arrears you are likely to build. If you do this, you still need a plan in the end.
How many months house repayments arrears before repossession?
As we've mentioned the last thing that house repayments companies want to do is repossess your home and it's a final resort as for them it's costly. It depends upon your particular lender, however most won't start repossession proceedings until around the 3rd month payment being missed at the earliest.
What is the house repossession process?
Here is generally the process for a reposession in the UK:
The lender will contact you about the arrears & try and arrange a way of paying it back
If it continues the lender will seek court action
You will be sent paper work from the court on your hearing dates and details
You attend the hearing, if you don't turn up there will likely be an outright posession order
The court makes a desicision, an outright order which means leaving within 4 weeks, or a suspended order that allows you to stay in your home and gies you a schedule of repayments to pay a set amount over your normal monthly payment
Baliffs may be able to evict you if you have an outright order or breach your terms of a suspended order
The lender will sell your home
What should I do when the arrears process starts?
To start with, never ignore any letters you receive from your house repayments lender. Contacting them immediately can slow or even halt the repossession process. Ignoring the situation can make it accelerate.
If you are able to make a payment or even a part payment, then do so. Even suggesting a repayment plan to your lender in order to settle the arrears is a positive step forward.
Within this, there are other things that can be done to help your situation. Under the Protocol for house repayments Arrears, the lender needs to give you the opportunity to do so. These situations include claiming against any house repayments payment protection insurances, claiming through government support as you may be entitled or rescheduling any payments you have left on your house repayments.
Can I stop a repossession?
There are several things you can do to try and stop a repossesion beforeit even goes to the courts, here are a few tips:
Keep in constant communication with your lender, talk to them and be clear about the situation
Try to improve your financial situation and catch up house repayments
Work out a repayment plan with your house repayments lender
Speak to a debt adviser
Pay back as much as you can, when you can
If you find your home at risk of repossession, one of the best ways you can recover the money that you have already paid into it is through selling. If you can cover the cost of your house repayments, and the outstanding repayments and still come out with money then this is the best option for you.
However, whilst selling through the open market is an option, it may not be ideal. Open market sales can be slow, and there is no guarantee the buyer won’t pull out at the last minute and set you back to square one.
Because of this, the best way to sell your home at risk of repossession is by selling to a cash buyer. A cash buyer is the best way to ensure a fast house sale as they have the funds to buy your house outright and will allow you to complete the sale in a time frame that suits you.
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