If you are facing repossession and have tried speaking to your lender and explored the options outlined in the Mortgage Arrears – The Basics
article, then there are still further options.
You may have reached a stage where you know you cannot pay off the arrears and what you can pay is not acceptable to the lender or the courts. In this situation, if you do nothing, the lender will obtain a possession order and serve an eviction notice. Typically you will only have a short time between receiving the eviction notice and having to leave your property (two weeks or less), though there can be several months between falling into arrears and actually being evicted.
Once the lender has possession, they will normally try to sell the property through an estate agent or at auction. If the property is sold for less than the total mortgage plus arrears plus fees and costs owed, then the lender can pursue you for the difference. For this reason you would be advised to explore other options, as this route leaves you without any control over how much the property sells for.
To avoid eviction, you could consider selling the property yourself, perhaps with the use of an estate agent. This may be a better option as you are likely to get more for your property than the lender will. You will also have some control as you will be able to accept a price that you are comfortable with. The downside to this option is that it may take longer to sell your property than the lender or the courts are prepared to allow. Generally, judges may allow extra time for a property to sell as long as solicitors have been instructed and an offer has been made and accepted, and the transaction is well underway.
You can also consider refinancing the property with the existing or a new lender, though as you have been in arrears the mortgages available to you are likely to have very strict conditions and high interest rates.
There are also a number of companies that offer to help you stop your repossession and buy your property within a few weeks and then rent it back to you. This sell and rent back option gives you the benefit of clearing your debts and staying in your home. Companies also offer to buy your property fast for cash, which means you can sell, clear the debts and move on. The downside is that these companies tend to offer less than market value – typically 70-90% of market value. The other downside is that there are many companies offering this service and not all of them are ethical and can take advantage of you. However, if either of these options appeal to you then please see the sell your property section. You can can also complete the sell my property enquiry form and we will pass your details on to carefully selected and vetted companies experienced in offering a good ethical service.
So if you can’t find the money to pay off your arrears, there are some options to explore, each with advantages and disadvantages, so consider them carefully in the light of the specifics of your situation.
