23 September 2022

How to stop the repossession of your house

How to stop the repossession of your house

If you are behind on your mortgage, your mortgage lender is able to sell your house in order to recoup the money that you owe.

Facing repossession can be a worrying prospect, but we’ve put together some advice to help you stop house repossession by assessing your options and making the best decision for your circumstances.

Repossession can negatively affect your ability to secure another mortgage in future, so it’s better to stay calm and take decisive action to avoid it.

How does repossession work?

Missing one mortgage payment will not trigger the repossession process, but may result in heavy fines. If you fail to pay for more than one month it is increasingly likely that your mortgage provider will seek to repossess your home.

Lenders can’t do this without giving you notice of their intentions, and from the moment you miss your first payment, it’s likely that they will send a letter informing you of the charges you have incurred and the consequences of further missed payments. If you don’t contact them or respond to their letters, they are likely to push for repossession to happen sooner rather than later.

Default notice

If you fall far enough behind in your payments (usually three to six months) they will issue a formal letter called a ‘default notice’. This letter will usually give you two weeks to settle your debt with the lender. If you fail to pay before the deadline, your account will be in default and the lender is likely to file for repossession.

Dealing with the court

Your lender will have to apply for a repossession order with the county court. At this point, you will be called for a court hearing. If the court rules in favour of your lender and grants the possession order, then the repossession will usually be set for within 28 days of the court hearing. The lender will then look to sell the property to cover their costs.

The judge may also hand down a suspended possession order, this means that as long as you make regular payments as detailed in the order, you can stay in the house. However, if you fail to make payment, the lender can apply to evict you.

If you need help dealing with repossession, there are charitable services online that can help you manage the process.

Seeking help

It is always sensible to speak to a housing charity if your house is being repossessed – non-profit organisations, like Shelter – offer free, impartial advice and may be able to take a clearer view of your situation. If you suspect your lender is treating you unfairly or breaking the law, you can also lodge a formal complaint with the Financial Ombudsman.

There is room to negotiate

There are ways that you can stop repossession. Lenders are likely to be open to negotiation, as it is in their interests to continue the mortgage agreement if possible. Mortgage providers make more money by continuing to collect your mortgage payments than they would by going through the costly and time-consuming process of repossessing and selling your property.

Even if your lender has already begun a court action against you, it is possible to speak to them and try to come to an agreement.

Starting this conversation is a great way to relieve some of the pressure that comes with repossession, buy you some time and allow you to make the right decision about how to proceed. In fact, if you begin this conversation early, rather than waiting until your account is already in default, you have a far better chance of coming to a workable arrangement with your lender.

If you can demonstrate a good faith effort to clear your mortgage arrears and present a clear plan for how you’ll pay back what you owe, this will go a long way to building trust with your lender. You may want to speak to a financial expert to help put this repayment plan together. Your lender is legally obliged to consider your proposal, so there’s nothing to lose by opening a dialogue and asking for more time to clear your debt.

Loans are available to help in some cases

A bridging loan or repossession loan may be an option in some cases. These loans clear your mortgage arrears and transfer your debt to another company. This option is only available if you have a history of good credit scores and a workable plan for paying back your debt.

Be cautious about taking out further loans – make sure you have fully thought through your repayment plan and ask for financial advice if you are at all unsure about whether you can meet the terms of the loan.

Selling up to cover your costs

You might consider selling your property to avoid repossession.

Before taking this option, make sure that any sale would completely cover your debts. It is sensible to speak to an estate agent to get an accurate valuation so that you can weigh up the benefits of selling. If the sale does not clear the entirety of your debt, your lenders may chase for the outstanding amount, leaving you in a tricky situation.

If selling your home would cover your mortgage and arrears and leave you with some leftover money to start again, this could be a good option.

Selling your home can put you back in control of your finances, providing the property’s value exceeds the debt involved.

How to sell your house fast

Of course, a house sale on the open market can take a long time, and if you are in a repossession situation this is likely time you don’t have. House buyers, like UPSTIX, who offer a quick sale and can buy any house can be a helpful and stress-free way to make a quick sale and remove uncertainty from the process.

Remember that house buying services will not offer you the full value of your property – in our case our valuations are typically 11% below the market rate, but if the amount of equity in your property is enough to absorb this and still clear your debt this could be the best option.

UPSTIX can provide a free, instant quote, driven by data. If the quote looks good to you, then you can register your interest with us and we’ll send an estate agent to look at your property and finalise the valuation. To be completely transparent, we’ll also share all the calculations that we used to reach our final figure, so you can move forward with all the information.

If you’re happy with our final offer we can commit to complete and have the funds safely in your bank account within seven days. No one moves faster.

Our process is tried and tested, and we will deal with every sale with sensitivity and care. You’ll have a dedicated UPSTIX expert assigned to your case who can talk through everything with you and make sure you’re fully informed at all times. Our solicitors will provide your lender with proof of our intention to buy your property, halting any further legal proceedings and giving you peace of mind.

Get an instant offer today to see if we can help.

Back to all news

Ready to make your move?

Data-driven valuation. FREE online cash offer. Quick sale.

Value and associated costs used for illustrative purposes