July 15th, 2021.
What Happens When a House is Repossessed?
There are so many moving parts when it comes to solidifying a loan on a property, that naturally things can potentially go wrong further down the line. Here, we explain what happens when a house is repossessed and what you can expect to happen should you find yourself in this situation.
What is a Repossession Order?
This is the first point of call in the repossession of property process. If you miss a mortgage payment, most lenders will give you the opportunity to provide reasoning. Mistakes happen and, if this is the case, banks are more often than not happy to listen.
However, if you repeatedly miss payments and become in arrears for 90-180 days, mortgage law dictates the lender is within their right to enact repossession of property. For this to start, the lender must get a judge to grant and then issue to you a repossession order from court.
What Happens When a House is Repossessed?
Failing to honour your side of the loan agreement by not meeting the required payments, means the lender will now do what is needed to reclaim the money loaned. If the loan is secured against your property, this will be done by selling the house, with most banks hiring professional estate agents or auction houses to get the sale done.
It’s common knowledge how volatile the housing market can be in the UK, so there may be difficulties when the lender comes to selling the house. If this is the case, you should be aware that additional costs could be added to what you already owe.
These may include:
- Interest payments
- Penalties
- Upkeep of the property
- Any repairs needed
- Legal fees
- Estate agent fees
What is the Best Way to Deal with Repossession of Property?
A situation as stressful as this will never be easy, but there are steps you can take to minimise the fallout. The first thing you must establish is dialogue with the lender you opted with.
Letting them know the reasons why you may have missed a payment is vital in avoiding the following steps discussed. The best way to do this is to secure the help of a good financial team to navigate the best route on your behalf. There may be options available to you to refinance, so all avenues are best explored.
Then, if you find yourself having to proceed with the repossession order from court, you’re not doing it alone and at least some of the stress will be relieved.
How Can Pure Property Finance Help?
At Pure, we build bespoke finance deals that suit our clients’ specific needs. This includes affordability checks to ensure payments can be made, and repossessions are avoided.
However, circumstances change, and we want to make sure a situation like this doesn’t get the better of you, or effect future investments too much. If you have previously had some financial difficulties, we have a wealth of expertise in residential bad credit mortgages and are always happy to help.
Our friendly team can immediately help alleviate the stress you may be under, so contact us today, and let’s find solutions together.
