In This Article
- Can I stop my repossession order?
- Ways of deferring a repossession
- Could I make a profit from a repossession?
- How long does a repossession take?
- What are your legal rights?
- What happens when a house is repossessed?
- Can I get my home back after a repossession?
- Can I get my money back after a repossession?
- Can I get repossessed today?
- Selling a house before mortgage is paid
- What happens when you pay off your mortgage?
Can I Stop My Repossession Order?
It can be worrisome when a property repossession order has been placed on your home – but it is possible to stop your home ending up at a repossessed house auction, even right up to the day of eviction. It could be that you sell to cash house buyers, it could be that you manage to organise a new payment plan, however it plays out, it is never too late to take action in the UK.
We will look at the house repossession process and some ways you can defer repossession, as well as asking, if your house is repossessed do you get any money back? On the other side, we will go further and ask what happens when you pay off your mortgage.
Ways Of Deferring a Repossession
Take me to your lender
In line with pre-action protocol, you are allowed to be negotiating with your lender, who has to give you the opportunity to talk with them outside of court. They should allow you a fair amount of time to sell your house, or to arrange another way to pay – even if your lender is already applying to the court for repossession, you should still try and avoid having your house be repossessed and ending up at repossession auctions.
To try and stop the property repossession of your house, negotiate with your lender to see if you can change the type of mortgage you have, extend it or reduce your payments. If you can prove that this will then allow you to keep up with repayments, lenders will consider all reasonable options. There is no harm in writing up a new mortgage proposal idea and negotiating with your lender. If this is successful, you may not have to worry about your home ending up listed as one of many repossessed houses for sale.
However, make sure you are negotiating with your lender and recording it in writing at this point. If you do go to court, you will then have the opportunity to explain your situation to a judge and will have evidence of your attempts to resolve the situation.
Pay your arrears
Even if you can not pay the arrears in full – or make a full mortgage repayment – if you can manage any amount, no matter how small, you should pay this as soon as possible. Paying even the smallest sum back shows that these repayments are your top priority and you fully intend to catch up with your payments and can lessen the likelihood of your house appearing at repossessed house auctions.
Get a lodger
Renting your home is a creative solution when faced with debt arrears. Consider taking on a lodger to live alongside you, or if you can, stay elsewhere and rent out your whole home. This income could cover a significant part (if not all) of your mortgage repayments.
Of course, you should only do this with the proper legal agreements in place. If you decide to go down this route, you should speak with a UK financial advisor or even a letting agent to ensure you’re not breaking any laws on contracts, and you must keep the wellbeing of your tenants at the forefront.
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Could I Make a Profit From a Repossession?
If you cannot keep up with your repayments and your financial situation isn’t expected to improve, selling your home quickly may be the only way to stop repossession or avoid voluntary house repossession. Although this is probably not ideal, it is better to sell your home yourself because you will probably get a higher price than your lender at an auction. Thus, you would not have to worry about your home ending up listed as one of many repossessed houses for sale.
One option to sell your house is through online or high street estate agents. If you are against the clock however this could be stressful as the average time to sell can be 6 months or more. Unless you are a buyer looking at how to buy a repossessed house, it is unlikely you will make a profit from a repossession.
You can sell to UK cash home buyers. All you will need is to agree on a price to sell your house, based on the value of your property. They often do the rest, including instructing and paying your legal fees. Providing you have equity in your home, money received from the sale of your property goes towards paying off your mortgage and mortgage arrears you have accrued. The remainder is cash in the bank for you.
How Long Does a Repossession Take?
To answer your question simply, a property repossession order will typically be a 60-day repossession order. If, however you do not contest the property repossession or don’t turn up to the hearing it is more likely to be a 30 day repossession order. However, you are not clear if you have even received a notice of intended court action or a court date. There is no hard, fast, rule which states when each lender will start repossession proceedings, they can be after just 1 missed payment – the average is between 2 and 3 missed payments. After this, the process of eviction will begin and the house heads toward being listed on house auctions, online auctions, and repossession auctions.
If you are worried and you cannot keep up with your repayments and your house is at risk from repossession, then it might be wise to consider selling your property for cash and moving to a more affordable house that doesn’t stretch your budget to this extreme.
What Are Your Legal Rights?
According to Gov.uk, you may be able to postpone or stop your home being repossessed. Check if you can get legal aid to help with your legal costs. You can get advice from UK Civil Legal Advice if you’re eligible, who may be able to help you out and make sure your house does not end up listed as one of many repossessed houses for sale.
Furthermore, they state your legal rights before court. Before a mortgage lender can repossess your home, they must:
- tell you how much you owe
- consider a request from you to change the way you pay your mortgage
- respond to any offer of payment you make
- give you reasons for turning down your offer of payment within 10 days
- give you a reasonable amount of time to consider any proposal they make
- give you 15 days’ written warning if they plan to start court action
- tell you the date and time of a repossession hearing
- let your council know within 5 days of getting notification of the date of the court hearing, in case you need to apply to the council as homeless
What Happens When a House is Repossessed?
What is the house repossession process? Properties are usually repossessed when an owner has defaulted on their mortgage and fallen into arrears (this is most often the start of the house repossession process) or the mortgage lender, who – as a result – applies to the courts for the issuing of a repossession order. As is typical with the house repossession process, the order is followed by an eviction order. That’s how most repossession houses enter the real estate market as houses for sale. It will likely find its way onto house auctions, online auctions, and repossession auctions.
The sale of the property goes towards paying off the previous owner’s debts, and the lender is legally obliged to get the best possible price. In order to recoup their investment as quickly as possible, lenders will often price the property below market value to encourage a sale.
Can I Get My Home Back After a Repossession?
Theoretically, you can get your home back after property repossession, but you would need to be able to cover all associated costs, including the mortgage and arrears first. It would be ideal if you could stop repossession by following the steps above instead.
Selling your house through a regulated property buyer allows you to sell your house without paying any estate agent or solicitor fees. It’s a fast solution that stops repossession efficiently, who aim to buy your property within three weeks for up to 85% of the market value in cash. The sale is confidential and doesn’t involve any hidden fees, meaning you can escape further financial duress. It is a more desirable situation for individuals than having your property end up at repossessed house auctions.
However, you need to be negotiating with your lender to check that you can do this, as it may not be possible to sell your house if it has negative equity, which means you owe more than it’s worth. The aim of selling your home is to pay what you owe, so if you have negative equity, this won’t be a good option for you.
If you’re considering selling your home to avoid repossession, you can sell your house quickly, and for a fair price.
Can I Get My Money Back After a Repossession?
If you’re pondering the question ‘if your house is repossessed do you get any money back?’ or perhaps you’re worried that you may lose it all, be aware that your debt problems don’t necessarily end after your house has been repossessed.
If your house is repossessed do you get any money back? The number one reason why you will not get any money back after your house has been repossessed is because your mortgage lender will sell your house at well under market value. Lenders are not in the property business, which means that all they want is to get their money back as fast as they can. Whether you’ll get any money back after your house has been repossessed depends on how much equity you have in your home at the time this happens. When asking if your house is repossessed do you get any money back, you should contact your lender to discuss your equity in the property. Even where you thought you had equity in your house, it is unlikely you will get any money back, due to the fees involved in repossession and your legal standing. Thus, the answer to ‘if your house is repossessed do you get any money back?’ is an unfortunate no.
Can I Be Repossessed Today?
Luckily, in these testing times, you do not have to worry about your home ending up listed as one of many repossessed houses for sale. The financial regulator has allowed borrowers to apply for a second mortgage payment holiday and extend its ban on home repossessions for a year. Those looking at how to buy a repossessed house may find properties thin on the ground this year.
In an update on Nov 2, 2020, the Financial Conduct Authority UK revealed further details of its plans to bolster support for mortgage borrowers in the UK-wide lockdowns. You do not have to worry about your home ending up listed as one of many repossessed houses for sale.
The regulator announced it would extend payment deferrals by up to six months and in yesterday’s statement confirmed borrowers who had not yet had a mortgage holiday would be eligible for two deferrals across this time frame. The FCA UK has also proposed borrowers who currently have a mortgage payment holiday will be eligible for another payment deferral of up to three months.
Mortgage payment holidays were introduced in March, and extended in June, as a way to support borrowers who were experiencing difficulties with making payments due to coronavirus restrictions. Alongside mortgage payment holidays, the FCA UK has paused the house repossession process, including guidance that firms should generally not enforce repossessions before 31st January 2021 except in exceptional circumstances, such as a customer requesting that proceedings continue. The FCA UK is now proposing to extend this guidance so that firms should not enforce repossessions before 1st April 2021, alongside their mortgage payment holiday proposal. If you are on the other side of this, you may ask how to buy a repossessed house…
Selling a House Before Mortgage Is Paid
Is it possible to be selling a house before the mortgage is paid? Yes, you can sell your house before a mortgage is paid. In fact, selling a house and relocating before paying a mortgage in full is relatively common. However, you won’t be able enjoy the entirety of proceeds coming from the sale; your remaining loan balance will need to be paid first. If you are thinking of selling a house before the mortgage is paid, the market is high enough and you need to make a swift sale for whatever reason, you should consider a quick house sale company. This lifts a weight off your shoulders if you are worried about mortgage payments, which can lead you to be selling your house before the mortgage is paid.
What Happens When You Pay Off Your Mortgage?
According to Experian, what happens when you pay off your mortgage is you’ll receive a number of documents from your lender that show your loan has been paid in full and that the bank no longer has a lien on your house. These papers are often called a mortgage release, or mortgage satisfaction.
You’ll likely receive a statement indicating that the loan’s balance has been paid in full and a canceled promissory note. This is all part of the official process of what happens when you pay off your mortgage. In many cases, your lender will file a certificate of satisfaction with your county government, which releases the home’s deed to you and indicates that you are now the sole owner. Ask your lender if they will do this for you. If they will, be aware that it can take a few weeks or months for it to be filed. Once your lender has told you they’ve filed the documents, contact your local records office to confirm that their records show your mortgage has been cancelled.
If your lender says they don’t file it for you, you can file it yourself—just check with your local county clerk or registrar to find out what the process involves with what happens when you pay off your mortgage.
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