Since the UK’s repossession ban was lifted on June 1st, hundreds of thousands of mortgage holders have potentially been put at risk of losing their homes. Following this, repossession queries on Google have increased by over 200%, suggesting that more repossession orders have already been served.
Financial adviser Paran Singh shares his key tips on dealing with a repossession order right now.
Steps you can take
1: Contact your lender
Your lender is interested in recovering the money you owe them in the most convenient way possible, meaning they are always willing to open a dialogue that helps resolve your issues. Calling them early in the arrears process can help buy you more time to get your finances in order.
2: Contact an adviser
There are several free options for financial advice, including citizen’s advice and charities like Shelter who can help you no matter what stage of the process you are in. You are also always entitled to legal support and may be eligible for free representation during your repossession hearing.
3: Investigate financial support
Financial support such as bridging finance can be a short-term way of resolving repossession proceedings as this will transfer your debt to a new lender and result in your previous lender dropping the order. However, this process is only usually viable for those with a reliable debt plan so it’s important to do your research.
4: Avoid voluntary repossession
Voluntary repossession involves handing over the keys before the date your lender has given you to leave. This may seem like the best option for someone overwhelmed with debt but could lead to shortfall debt and other credit issues. In most cases, you should only approach voluntary repossession as a last resort.
What your lender must do
1: Discuss the exact amount owed
Your lender must provide details on the exact amount owed and any additional charges that come with your arrears. They must also explain to you the reasons for every charge provided and discuss the different options for payment you may have.
2: Final warning notice
You must have received a final warning notice before the proceedings begin, which is usually after three or four months of mortgage arrears. However, they may be willing to extend this if you contact them early to discuss your situation.
3: Get a warrant
If your lender wins the case against you, they will need to get a warrant and provide a specific date on which the bailiffs will come to repossess your home.
Reselling your home
If your home is repossessed by your lender, they will need to sell the property in order to settle the debt. This means they’ll need to get the best price possible for it to keep you from falling into shortfall debt. If you find that your lender is selling your property for less than it’s worth or through questionable means, contact the Financial Services Ombudsman.