Facing the prospect of having your house repossessed is scary. However, receiving your notice of delinquency of payment in your mortgage doesn’t automatically mean you will immediately be kicked out of your house and lose your home. There are certain things you can do to slow down the repossession process, so that you can get back on your feet and fix your financial record, while hopefully, getting to keep your house. Here are seven things you can do to help you keep your home from getting repossessed:
Face Things Head On
Do not ignore notices and pretend that you’re not having a hard time. Face your problems head on because these notices come with repossession prevention advice. Most lending institutions have a 15-day grace period for you to pay up what is due. Some may have penalties, but you can always request and try to have them waived. After non payment of 90 days, that’s when repossessions proceedings begin. The entire process of having your home repossessed can take a few months to a year, depending on where you reside. Hopefully, you can come up with the money to allow you to stay in your home.
Pay Something Towards your Arrears
If you are able to do so, pay a little bit towards your mortgage arrears. Even it it is just a little bit, find the money to do so. Even if you can’t pay the full monthly payment, offering what you can afford to pay shows the lenders you are making your debt a top priority. This shows the lender that you are willing to work with them by attempting to manage your budget. Paying a small amount also exhibits your willingness to be responsible, making future talks with them a lot easier.
Talk to Your Lender About Refinancing
Repossession is a time consuming process that most lenders would actually prefer to avoid. Talk to so you can work out a solution instead of hiding in shame. Lenders can offer to refinance your property with new terms and interest rates that are more affordable. The upside is this does not affect your credit history, and it has the potential of lowering your monthly payments. This is similar to working out a repayment plan or home loan modification to change the terms of your existing loan to make the monthly payments more manageable for your pocket.
Ask them About a Forbearance
Discuss the concept of forbearance with your lender. This is also known as a payment holiday. Here, they temporarily agree to suspend your payments for a specific time frame giving you time and allowance to find your financial footing. This is why paying a little bit upfront of what you can afford bears a lot of weight with your lenders because this shows them that you are putting in your best effort to come up with the funds. You may just have had a stroke of bad luck, but it doesn’t last forever. These deferred payments will be eventually tackled towards the end of your loan. The important thing here is you are given ample time to make ends meet.
Check your Insurance for Possible Coverage
Check to see if you are eligible to claim from mortgage insurance protection to help you pay back your arrears. Sometimes, your income will suffer because of an accident, an illness, or a job redundancy, which is totally covered by this mortgage insurance. Re-read the fine print of your contract and talk to your lenders about this possibility.
See If you Can Claim Benefits from The Government
It is prudent to check if you can qualify for benefits to help you pay your mortgage through SMI or support for mortgage interest or a universal credit help with housing costs. It will take some time for you to apply and get the approval, but do tell you lender about these critical steps you have taken. They should not start any repossession proceedings if you have a good chance of getting your benefit claims approved. Other benefits you can claim include pension credit and other benefits like unemployment, low income, or disability.
Rent or Sell Your Home
Desperate times call for desperate measures so consider taking in a lodger to rent one of your rooms to help augment your income. You can also temporarily move back to your parents’ house and have your entire house leased. However, do check on the policy with your mortgage lender and inform them of your plans. On top of that, verify to see how this additional income can affect your tax standing. If you are unable to do any of these, and you are struggling at settling your arrears, consider selling your home before it becomes repossessed. There are many property buyers out there on the lookout for distressed property. It is better to sell the house, even with the negative equity, than to completely ruin your credit history with a total repossession.
