Repossession is when your mortgage lender takes your home from you following non-payment of your loan. Most lenders don't want to take this step, however, and there are ways in which you can avoid repossession even if you have already missed a mortgage payment. Major lenders will not commence proceedings until you have missed three months of mortgage payments; certain lenders, including Natwest and Royal Bank of Scotland, wait until six months of arrears have accumulated.
Instructions
- 1
Contact your lender as soon as you know that you are going to fall behind on your mortgage payments. Banks should not commence repossession proceedings while there are active negotiations taking place. If you are upfront and honest with your lender at all times, they are more likely to work with you to try to resolve the situation.
2Discuss alternative payment options with your lender, such as an extension of your mortgage term, which spreads the debt over a longer period thus reducing the monthly payment amounts. A payment holiday may be another option, if you are confident that you will have your finances back on track within a month or two. Changing your mortgage to an interest-only mortgage will reduce the monthly payment amount.
3Contact a debt counselling agency for help if you are not able to sort things out with your lender yourself. This works in your favour if the matter does end up in court as it shows that you have taken real steps to address the problem. Go for a non-profit debt agency (see Resources below).
4Sell your house to pay the loan off; you can do this even if the matter has reached court and a possession order or eviction notice has been issued. This will only work if the value of the house is high enough to enable you to pay back what is owed.
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