What you can do to avoid repossession – a guide :Cross Stitch – Home and community
There are several things you can do to make sure your home isn’t repossessed. It’s never too late to get advice, so don’t walk away or hand over your keys to your lender. Find out how to get help to keep your home if you are facing repossession.
Speak to your lender as soon as you think you have a problem making your mortgage repayments.
Generally, lenders are willing to talk about your situation and help you find a solution. There is a set of conditions called the ‘pre-action protocol’, which your lender must fulfill to give you every chance to keep your home. If your case goes to court, you and your lender have to prove you have followed the pre-action protocol to the judge.
Your lender must:
- tell you how much you owe and any interest charges you’ll have to pay
- consider a request from you to change the way you pay your mortgage
- respond to any offer of payment you make
- give you their reasons for turning down your offer of payment within ten working days
- give you 15 working days’ written warning if they plan to start court action because you haven’t kept to a repayment agreement
How your lender can help
To help you manage your repayments, your lender may:
- agree to change or lengthen the term of your loan
- accept reduced payments from you in the short term
- add any repayment debt to the amount you have borrowed
You need to:
- show you are willing to make repayments you can afford
- pay what you can, when you can, even if you can’t afford the full payments at the moment
- get a written copy of any repayment arrangement you make with your lender
- keep in regular contact with your lender and let them know about any changes in your circumstances
Speak to an adviser immediately if you can’t reach a repayment agreement with your lender or can’t pay at all
A trained money adviser from an independent agency, like the Citizens Advice Bureau or Shelter, can give you free and impartial advice about:
- talking to your lender
- prioritising your debt payments
- decreasing your spending and increasing your income
- any government-backed schemes you may be eligible for, like Mortgage Rescue
- any benefits or financial help you may qualify for, like Support for Mortgage Interest
Follow the link below for a list of independent money advisers, their contact details, how they can help and what to take with you.
If you are very behind with your mortgage repayments, in order to avoid repossession, you may want to consider selling your home. You can do this independently or in some cases with help from your lender. This could result in you getting a better price for your property than if it were repossessed.
If you decide to sell your property, you should discuss the matter with your lender first. They may offer an ‘Assisted Voluntary Sale’ scheme. This is where you put your property up for sale with the involvement of your lender. Sometimes they can help with some of the costs of the sale or move.
You should always get advice from an independent money adviser to discuss what is right for you.
You should also get legal advice on how a decision to sell your house might affect your legal rights, in case you need assistance from your local authority.
If you have fallen behind with your mortgage payments, your lender will send you a letter called a ‘notice of default’. Make sure you read this letter – it will give information about how much you owe and any action your lender plans to take.
You need to:
- speak to your lender straight away – you could still reach an agreement with your lender at this stage
- get help from an independent adviser – take the letter with you
Your lender can start legal action to repossess your home if you don’t respond to the letter or can’t reach a repayment agreement. Even at this stage you can still get help to avoid repossession.
See ‘What to do if your mortgage lender takes you to court’ for information about:
- where to get independent, impartial advice
- how you’ll find out about the hearing
- when repossession could be postponed
Repossession doesn’t happen automatically. Even if you have been given a date to attend court, you can still get help to keep your home.
See ‘Preparing for the hearing’ for further information including:
- where to get advice
- what you need to take with you
- help to estimate your legal costs
It is vital that you go to your court hearing. It’s your opportunity to explain your situation to the judge. If you don’t go, it’s much more likely the judge will decide you have lost the right to keep your home.
See ‘Going to court for repossession – what happens on the day’, to find out what the hearing will be like.