Most people see home ownership as a big breakthrough in achieving their dreams. However, it is quite a huge investment to own a home which is why you may be emotionally and financially devastated when your home is repossessed. When a home buyer buys a home using the mortgage, the property is partly owned by the lender until the borrower can fully repay the loan. In case you fail to repay your monthly installments, there is a risk that you could fall behind in your mortgage repayment which increases the risk of your home being repossessed. When your house is repossessed it means that you will be evicted then your house sold to repay the balance of your mortgage loan.
Sometimes adjusting your budget can give you some much needed money to keep up with your loan repayment. For example, you can change your lifestyle, suspend subscription, and reduce cell phone usage. In case you are sure that you cannot make loan repayments it is advisable that you contact your bank right away. There are also financial lenders that can help prevent your home from being repossessed, especially if you are stuck in a negative equity or are unable to keep up with your mortgage arrears. If you are notified that you are facing foreclosure as a result of being in mortgage arrears, it is possible to stop your home from being repossessed by following below tips.
Contact your bank about the mortgage arrears
If you are in mortgage arrears, you can avoid your home from being repossessed by contacting your lender. In this case, you should write a letter explaining why you are in mortgage arrears and tell them that you are doing all you can to clear the mortgage arrears. Remember that the faster you contact your lender the higher your chances of avoiding your home from being repossessed.
Consulting a property debt specialist
It is possible to prevent your home from being repossessed even if you are stuck in a negative equity or your mortgage arrears are becoming unmanageable. If you are finding it difficult to deal with your lender, consulting a property debt specialist can help stop home repossession. They have the experience and knowledge on knowing how to get through the issue without losing your home.
Alter your mortgage terms
You can ask your lender if it is possible to alter your mortgage terms before the repossession process starts. They may look at your options such as mortgage type, how far you have fallen behind your payments, and why you are in mortgage arrears. Depending on your situation, you can ask them to reduce repayment amounts, extend the mortgage term, or capitalize the mortgage arrears.
Look at your financial options
If you have a mortgage, there is no doubt that you should look to pay it first over other expenses. Expenses such as pay TV subscriptions, credit cards and phone bills should be paid after paying your loan. It is important that you look at your finances so that you can see how you can repay a mortgage and ensure that you keep up with your loan repayments.
Rent your home
Consider renting out your home so that you can boost your income which helps you to repay your mortgage. It is important you get permission from your mortgage lender and ensure you notify your HMRC before renting out your house.
If you are behind your mortgage repayment you can follow the above tips to prevent your home from being repossessed. Also make sure that you check with your insurance to confirm if you took mortgage protection insurance. This insurance ensures that you continue to pay your mortgage even when you don’t earn enough income.