Once you have fallen behind with paying your mortgage, getting back on track can be difficult. Spiralling into debt when owing such large sums of money is a stark reality and it can easily happen to anybody. Whilst burying your head in the sand can be tempting, this could put your property at risk. Research conducted by We Buy Any Home revealed that 1 in 20 British citizens have had their home repossessed after falling into serious arrears.
Analysing the mortgage habits of 2502 responders, We Buy Any Home discovered that those aged 18 to 34 were most at risk of losing their home, with 1 in 39 having previously faced repossession. The majority of those in the older 40+ age demographics had admitted to defaulting on payments, but had the ability to rectify the situation swiftly.
What are mortgage arrears?
If you have outstanding mortgage payments, you are in arrears. Whether you have missed one monthly payment or are seriously in debt, and owing money is referred to as mortgage arrears. Being behind on your mortgage repayments can result in property repossession if the situation is not dealt with effectively, following your mortgage lender carrying out the steps listed below. If you have not been in contact with your mortgage lender, do so immediately.
Contact your mortgage lender
To your mortgage lender, you are a customer. As long as you keep lines of communication honest and open they will be keen to help you and talk you through a plan of action. It is their obligation to discuss potential resolutions with you. Your lender must tell you 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 clear
Rest assured, your lender cannot seek repossession until all other solutions have been exhausted. Only once these have failed can they take legal action.
Start cutting costs
If you are falling behind with your mortgage payments because your salary is simply not stretching far enough, take a look at your bank statements. Try and discover where you could be spending a little too much and if there are any areas where you could make some cutbacks. A great way to decipher this is by listing your outgoings against your incomings, as well as essential and non-essential spending.
Check your insurance
If you are in mortgage arrears as you have been made redundant or are off work due to an accident or illness, check if you have Mortgage Payment Protection Insurance. Also known as Accident, Sickness and Unemployment Insurance – you may have taken this out when you took out your mortgage.
Ensure you double-check with your lender who you took your mortgage out with, they will be able to let you know if you have this cover. If so, you will be able to receive help with your mortgage payments.
How to stop repossession
Although it can be distressing, if you know you will not be able to make mortgage payments for the foreseeable future, it could be time to sell your house. This option would allow you to get some money in the bank and move on to a cheaper property or a rental home until you figure out your next step. Mortgage arrears and repossession negatively affect your credit rating which would affect your ability to borrow again. Therefore, sometimes this option could protect your future. Perhaps you own additional property that is being rented out. If you need to raise funds fast in order to avoid repossesion, selling a house with tenants is an option worth considering. Tenants should be able to retain their rights to stay in the propety under a new landlord and you recieve the cash to help stave off the threat of repossesion.
If you would like information on selling houses fast, get in touch with WeBuyAnyHome today. We can secure an efficient house sale solution for you in as little as seven days. This means you can avoid the long turnaround of the traditional open market. Simply fill in our enquiry form below and we will be in touch within 24 hours to help.