Options to avoid repossession of your home

How to stop repossession

To stop repossession of your home you need to:

• keep talking to your lender

• try to improve your financial situation

• work out a repayment plan

Lenders make money out of mortgages. They want to come to an agreement where you can resume payments instead of repossessing your home.

You have time to improve your situation and your lender must follow certain rules before they can start court action.

If court action has started, you can still speak to your lender and try to come to an agreement.

Speak to a debt adviser

You should get expert advice as soon as possible. A debt adviser can help you:

• decide on the best option 

• find ways to improve your finances

• make a financial statement

• work out a repayment plan

Talk to your lender

Contact your lender as soon as you miss a mortgage payment.

Explain:

• why you’re in arrears

• that you’re making effort to clear the arrears

• that you will send them a repayment proposal soon

You can start talking to your lender at any point even if they’ve started court action. The sooner you contact them the better your chances of keeping your home.

Payment holidays because of coronavirus

You can ask your lender for a 3 month payment holiday if you're struggling to pay because of coronavirus.

The missed payments will be added to the amount you owe for your mortgage. It's likely your monthly mortgage payment will go up after the payment holiday ends.

Check first  if you have insurance that will cover your mortgage payments. For example, mortgage payment protection insurance or through your current account.

Pay as much as you can

If you can’t pay your full monthly instalment it's better to pay something.

Small regular payments can:

• show that you’re reliable

• help to build trust with your lender

• show you’re trying to manage your budget

• show that you’re prioritising your mortgage

Improve your financial situation

Take steps to deal with your mortgage arrears by:

• looking at your income and outgoings

• prioritising your mortgage and other debts

• coming up with an affordable repayment plan  

Think about selling your home

Selling your home could cover the costs of your mortgage and your arrears. If you are likely to have money left after the sale this could be an option to think about.

If you can't afford a repayment plan you could think about an assisted voluntary sale. 

Don’t choose voluntary repossession

Voluntary repossession is when you leave your home and give your keys back to your lender.

In almost all situations it is a bad idea to choose voluntary repossession. Voluntary repossession does not clear your mortgage payments or your arrears.

Voluntary repossession still affects your credit rating.

You will continue to be liable for:

• monthly mortgage payments

• repayment of the arrears

• other costs such as building insurance

You will also have to pay your lender’s costs for selling the property.

The council may well decide that you're intentionally homeless if you hand the keys back to your lender when you have nowhere else to live.