Unfortunately, not everything goes to plan in life. You could lose your job, go through a divorce or suffer an injury or illness, all of which can hit your finances hard. If you do find yourself in financial difficulties, the immediate concern for most people is trying to cover the mortgage payments to prevent home repossession Stoke.
Some people can scrape together the cash and get through the crisis, but for others, the threat of repossession becomes reality. But like most things in life, there are solutions to problems, and you can try to avoid such a thing happening.
One positive thing to remember is a lender cannot just turn up and take control of your home. Before any repossession can happen, there are certain things a lender must do.
Mortgage Lender Obligations
Mortgage lenders must follow rules set by the Financial Conduct Authority (FCA). These rules ensure lenders treat customers fairly and sensitively, especially when dealing with payment issues.
Repossession should only be a last resort for the lender after all, it is in the lender’s interest to try and get you back on stable financial footing – no one wants to go through the repossession avenue if they can help it. Lenders would much rather you get back on a stable footing than have to go through the long process of evicting and putting the home back on the market.
Lenders must offer solutions before repossession, like delaying interest payments, extending the mortgage term, changing the mortgage type, or adding missed payments to the total mortgage amount. We’ll explain more about these later.
Lenders must also give borrowers enough time to sell their homes if they cannot agree on a repayment plan. The quickest way to sell house fast is to sell to a cash house buyer like We Buy Any Home.
If a lender doesn’t follow these rules, borrowers can make a formal complaint to the lender or the Financial Ombudsman Service. The Financial Ombudsman can check how the lender handled the situation and may ask them to stop legal action and find a repayment solution outside of court.
Lenders must also consider any repayment offer made by borrowers. If they don’t accept the offer, they must explain why within ten working days.
If a lender decides to start legal action, they must inform the borrower five working days before and follow all the necessary rules during the court hearing. If they don’t follow the rules, the court may delay the hearing to give the lender time to comply.
If the above is all adhered to, then your home will be at risk. But don’t worry, as mentioned there are five ways which can help to stop repossession in Stoke.
Sell to a Cash Buyer
If you are facing the threat of repossession and searching for a solution to prevent it, We Buy Any Home can intervene by purchasing your property for cash, effectively halting the repossession process. This approach works by ensuring that the cash we offer for your property is greater than the outstanding mortgage balance, allowing you to clear the debt.
As soon as you get in touch with us, we can act swiftly to buy your property and stop repossession in Stoke.
More and more people are using our services to help stop repossession in Stoke. You can even carry on living in your property after the sale goes through if required rent-free. Over an extended period, we usually aim to sell any property we acquire. However, in certain instances, we may opt to rent the property out, depending on the local rental market conditions. If you wish to stay in the property purchased by We Buy Any Home as a tenant, be sure to bring up this topic with your assigned agent during your initial conversation. The agent will then evaluate if this arrangement is feasible and, if so, will strive to make it a reality for you.
Extending Your Mortgage Term
When you took out the mortgage, you probably agreed to repay it over typically 20 to 30 years. The repayments are then split equally throughout the mortgage with interest added on top. By speaking to your lender, you may be able to extend the length of time you repay, thus reducing the monthly repayments. You will still have to re-mortgage once your fixed rate ends, or be at the mercy of tracker rate rises, but it is an effective way to reduce your payments relatively quickly.
Make sure to discuss this with your lender, as they may be willing to work out a new payment plan that suits your financial situation and provide Stoke repossession help for you.
Change Your Mortgage Type
Switching your mortgage type is another relatively quick option. Most people are on a repayment mortgage, whereby you repay both the loan and the interest so that after the period of the mortgage you own the home outright. But there is another option, whereby you only repay the interest. This would in most cases reduce the monthly repayments, hopefully to a level that is then affordable to you. At the end of your mortgage term you will still need to find the money to pay off the full amount of the mortgage, if not you will still face the threat of repossession, so remember this when you explore this option.
A Payment Holiday
A payment holiday can provide temporary relief by allowing you to take a break from making mortgage payments. This became a very more widely understood option during COVID when many lenders offered payment holidays to people hit hard by the pandemic. It’s important to note that interest will continue to accrue during this time, and you’ll need to make up for the missed payments in the future. This should only really be sued as a temporary measure as an extended payment holiday can damage your credit rating and is dependent on the generosity of the lender. Plus, any payment you miss will be added to the mortgage plus interest. You could save money now but end up paying more over the length of the mortgage.
Reduced Payments and Capitalising the Arrears
Another option is to negotiate reduced payments with your lender. They may be willing to accept lower monthly payments which can help you manage your finances in the short term at least. Alternatively, you can consider capitalising the arrears, where your outstanding debt is added to your total mortgage amount. This option will increase your mortgage balance but can offer a more manageable repayment schedule.
Facing house repossession can be challenging, but you have options to prevent it. Explore these five strategies to find the best solution for your specific situation. Stoke homeowners are facing rising bills thanks to inflation and stagnant wage growth. But remember, there are always solutions and services like We Buy Any Home are there to help if repossession becomes a real possibility.