At last. some good news: Thanks to the very low interest rates over the past few years, the number of people having their homes repossessed last year was the lowest for 35 years.
According to the figures from the Council of Mortgage Lenders, home repossessions in 2016 were down nearly 25 per cent when compared to the previous year. The number of people behind with their mortgage repayments also fell.
Your house can be repossessed if you get significantly behind with your mortgage repayments. In order to get back the money you owe them, the mortgage lender can evict you from your property and sell it. This is only ever done as a last resort, and the lender needs to apply to the court for permission first.
The money raised by the house sale is used to pay off what’s outstanding on your mortgage. If there’s anything left after that, it goes to the homeowner. But if the property sale doesn’t raise enough cash to clear your mortgage debt in full, your lender may continue to pursue you for this.
If you are behind with your mortgage repayments, or struggling to make them, it’s important not to panic. Repossession really is a last resort – lenders don’t want to have to evict you from your home.
What lenders want is for you to both come to an arrangement that lets them get back the money they lent you and you keep your home. That’s why you should never ignore their attempts to contact you.
If you’re in arrears on your mortgage, which means you’ve missed one or more of your agreed payments, get in touch with your lender as soon as possible. Let them know why you haven’t paid and you may be able to come up with a new arrangement.
Let’s say you’ve just lost your job. You may be struggling to cover your repayments but optimistic that you’ll get a new job within a few months. Let your lender know your situation and they may agree to a payment break.
During this time, you won’t have to pay your mortgage. And while this could increase your mortgage term and the length of time you’re making payments for, it might still be worth it if it takes some pressure off you until you find a new job.
On the other hand, your circumstances may have changed more permanently. Perhaps you’ve had a child and given up work, so you’re relying on your partner’s income alone to cover your mortgage payments.
Again, you should let your lender know about your change of circumstances as soon as possible. Together, you may be able to work out new monthly repayments you can afford – you can always pay more if your circumstances change in the future.
Your mortgage payments should be your priority. After all, paying them is what keeps a roof over your head.
If you’re struggling to juggle all your financial outgoings, your mortgage should be what you pay first. Speak to your other lenders or service providers and see if you can work out a new repayment agreement with them that takes the pressure off your finances for a while.
And if your finances are causing you to fear you’ll lose your home, there is help available. As well as contacting your lender directly, you can get information and guidance from the Money Advice Service.
Debt Advisory Centre: 0161 871 4881