If you’re behind on mortgage payments or in arrears, it’s important to know how to stop house repossession.
What Is House Repossession?
Your mortgage lender seizes your home through a court order. As you pay off your mortgage, the lender’s financial stake in your home decreases. If you miss payments, mortgage lenders can seize your home and sell it to recover debts.
Repossession: What Happens?
If your house will be repossessed or you just found out this is a possibility, the process is outlined below.
Throughout the repossession process, you should propose alternative, reasonable ways to repay your arrears and mortgage to your lender. It’s possible they’ll agree to a repayment plan up until the day of eviction. Lenders use repossession as a last resort.
Your mortgage lender will write to you if you miss a payment. If you miss payments, your lender will keep contacting you.
- Court Order
Your mortgage lender will ask a court to seize your home. This application costs money and explains why a judge should give the lender the property.
You will get a court date. You must attend to explain to your mortgage lender and the judge why you missed payments and what you suggested.
- Possession Order
If the judge rules in your favor, you must sign a new repayment agreement. If you don’t, you’ll be evicted.
Avoiding House Repossession
If you fear your mortgage lender will begin the repossession process, try to prevent it or prepare yourself.
You can ask a lender to:
- Extending mortgage term
- Change loan type
- Payment break (a break from making payments)
- Investing arrears (adding them to your total mortgage amount)
If you’re unsure how to stop home repossession, consult a legal or financial advisor.
Voluntary repossession is another way to avoid full repossession, but it still involves giving your property to your lender. This option avoids court fees and sometimes allows you to stop making mortgage payments, as you are still liable to pay the interest on your debt until the lenders sell the property to recover their costs.
Stop Home Repossession
It’s worrying when a house repossession order is placed on your home, but you can avoid it even on the day of eviction. It’s never too late to act, as your mortgage lender won’t profit from reselling your home.
- See Your Lender
The pre-action protocol requires your lender to meet with you outside of court. Even if your lender has already filed for repossession, you should still follow the steps in “How to avoid home repossession” above.
To stopping a house repossession, ask your lender to change your mortgage, extend it, or reduce your payments. Lenders will consider all reasonable options if you can show you can make payments. It’s OK to send your lender a new mortgage proposal.
- Clear Arrears
Even if you can’t pay the arrears or mortgage in full, you should pay any amount as soon as possible.
- Rent Home
Renting your home is a creative solution to debt and foreclosure. Consider a lodger or, if you can, renting out your whole home.
- Check For Financial Aid
If a major life change has caused you financial trouble, check if you’re eligible for benefits.
- Check Your Policy
Check with your lender to see if you have mortgage protection insurance. These plans protect you in case of illness, accident, or redundancy and allow you to continue mortgage payments if you lose your job.