Home repossessions in the UK are at a 12 year high. The recently privatised Northern Rock Bank is repossessing 50% more homes than the mortgage industry average. Ouch!
In order to avoid repossession you need to talk to your mortgage lender as soon as you realise that you cannot afford your mortgage payments. The reason most people find themselves in these life changing circumstances is often due to the high level of credit card debts, loan debts and mortgages.
What ever you do don’t be tempted to abandon your home. Your mortgage lender will add any interest and all the costs they incur for the disposal of your home to your total debt until your home is sold. That’s Interest on your mortgage until your mortgage account is settled, Estate agent fees, solicitor’s costs for selling, the banks costs for all their letters and staff time spent and their legal fees, etc. This means that you will end up owing thousands of pounds to your mortgage lender after they have disposed of your home. Your mortgage lender can and will pursue you for any money due to them from the sale of your home for up to 12 years.
Try and sell your home first or seek an alternative solution as this will help you limit your costs that you will owe. The best solution here is to contact a Debt Management organisation like, Consumer Credit Counselling Services (CCCS) or National Debtline both are run by charities and they offer a free advisory service. Alternatively you could try and do it yourself, start by paying your mortgage and any secured Homeowner loan payments first each month. This will keep a roof over your head while you try and sell your home for the best possible price you can get. What ever money you have left at the end of each month after paying your mortgage, utility bills and living expenses should be divide proportionately between the loan and credit card providers that you owe money to.
What ever you do you must make a payment to your loan and credit card providers each month until you have sold your home. If you do not then your creditors can take you to court. If your loan or credit card provider try to take you to court for not paying your agreed payments to them. You will then need to prove that you have made an effort to pay them every month. The courts are more likely to deal more leniently with you if you have made an effort to pay – pay something even if it is your last £1 pay it.
The reason for this blog post is that most people don’t actually realise that they are still in debt for a further 12 years after their home is repossessed by the mortgage lender. The Mortgage lender can still pursue you for payment of the outstanding debt from the repossession. Therefore it is worth fighting to hold on to your home at all costs. Take my advice and seek professional help from a charity run Debt Management organisation.
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