Typically, the number one reason people’s homes are repossessed is due to mortgage arrears. However, falling behind on your rent or failing to pay your council tax can also be considered as a property debt.
Getting back on track once you are in debt can be difficult and research from We Buy Any Home revealed that 1 in 20 Brits have been evicted from rental properties or had their home repossessed due to property debts. The age group most at risk of losing their rented or purchased property due to related debt was those aged 18 to 34.
What not to do
If you are in rent or mortgage arrears, don’t simply bury your head in the sand or leave the property and hand over the keys. There are ways to rectify your situation without abandoning all hope. The worst-case scenario is being evicted or having your home repossessed and there are other less stressful options available to you.
Contact your mortgage lender
Your mortgage lender is not out to get you, even if you are in arrears. You are their customer and, as long as you are truthful and keep lines of communication open, they will usually help you put together a plan of action. Your mortgage provider is obligated to help you form a resolution and they must inform you of the following within 15 days of you falling into arrears:
- Inform you of the total outstanding sum
- List dates of the payments you have missed
- Make you aware of the total outstanding mortgage amount
- Give you a fair timescale to make repayments
- Ensure charges incurred because of late payments are cleared
Rest assured, your lender cannot seek repossession until all other solutions have been exhausted. Only once these have failed can they take legal action.
Be honest with your landlord or agent
Similarly, your letting agent or landlord does not want the worst to happen. They do, however, tend to be more forthright compared to mortgage lenders as they tend to be individuals or smaller companies who will notice a rental payment not being received. Nonetheless, being upfront and honest about your situation may fall on an empathetic ear and they may help you put a payment plan or another solution into motion.
Sell your home
This can be a difficult decision to make but it can be the most sensible option in some circumstances. Often, avoiding repossession can enable you to buy again in the future, as otherwise your credit rating would be affected.
If you cannot see yourself making your mortgage payments for the foreseeable future, it might be time to consider selling your home. This could allow you to pay off any property debt and purchase a smaller home or rent for a while whilst you put a plan together. In some cases, it could be a property that you are letting out is not drawing in enough consistent rental income. If selling a house with tenants could help you avoid reposession, speak to us, we can help facilitate a sale of any property type.
If you need to sell your house fast, get in touch with We Buy Any Home today. We can help you sell your home and avoid repossession in as little as seven days. This is helpful for those who need to avoid the long turnaround that can be typical of the traditional property market.