Things To Consider If You Are Facing Having Your Home Repossessed

Facing repossession can be one of the most terrifying times of your life. With mouths to feed and a roof to put over your family’s heads, the prospect of not having enough money to pay your mortgage can be incredibly daunting. For many reasons, redundancy and illness amongst them, hundreds of people are still facing the frightening prospect of having their house repossessed due to not having the funds available to pay the mortgage. This article looks at what you should do when you realise you cannot pay your mortgage and what steps your mortgage lender may take to help you.

As soon as you fear you may not be able to meet your next mortgage payment you should speak to your mortgage lender as they will have come across this situation time and time again as people struggle to come to terms with rising debt, and they should be willing to discuss matters with you and talk through your options.

Your mortgage lender must take steps to maximise your chances of being able to keep your home and a set of guidelines referred to as a ‘Pre-Action Protocol’ must be followed by your mortgage lender. As the name suggests, the Pre-Action Protocol requires the mortgage lender to carry out certain steps to try and assist you before taking legal action against you.

Your mortgage lender will discuss the current state of your mortgage with you, setting out how much you still owe and how much interest and charges and may be required to pay. You may submit a request to pay your mortgage under different terms (i.e. a lesser amount each month for a longer period of time) and your mortgage lender is obliged to consider your request. If your mortgage lender refuses to accept the new terms you are suggesting, they must set out the reasons for their refusal within 10 days.

If you fail to stick to a repayment agreement your mortgage lender must give you 15 working days warning (in writing) if they plan to start court action against you.

When your mortgage lender has fully considered your circumstances, options that they may make available to you include extending the length of your loan (thus reducing the amount of your monthly repayments) or accepting reduced payments from you on a short term basis with monthly payments increasing thereafter. You must show willingness to pay as much as your finances will allow and must commit to sticking to any new arrangements that are put in place.

To summarise, the key thing to remember if you are facing the prospect of not being able to pay your mortgage is to speak to your mortgage lender as soon as possible and be completely open with them about how your finances have changed and what you can now realistically avoid to pay.

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