If you are struggling to make you mortgage
repayments and getting into mortgage arrears it is a serious problem
which could ultimately lead to your home being repossessed by the
lender. This will mean you and your family being
evicted from
your house for mortgage arrears. However, there are a number of possible courses
of action. The problems could be due to losing your job or another
legitimate reason. The first thing to do is contact your mortgage
company. This should be done as soon as you have difficulties
meeting mortgage repayments. Then the following courses of
action can
be considered..….
-
Check whether you are covered by mortgage
protection insurance. If you are then you can make a claim.
-
If you are now unemployed or only working
part time then you may be entitled to income support. You may
also be eligible for an income based Jobseeker’s allowance or
JSA which can be used to aid with interest payments on your
mortgage. The capital payments will still have to be met by you
and the JSA may not even meet all the interest part of the
payment.
-
If your financial circumstances have
changed you may be entitled to help from the government.
For example, even if you work you may be entitled to receive tax
credits to boost your income.
-
If you have a repayment mortgage ask your
mortgage lender to have it changed to an interest only
mortgage. Alternatively ask whether they will agree to accept
reduced payments for a time.
-
If you are behind on payments on an
endowment mortgage, enquire about switching to a repayment
mortgage and cashing in on your endowment.
-
Look at switching your mortgage lender and
cutting repayments by changing to a mortgage with a lower rate
of interest.
-
Alternatively you could consider extending
the term of your mortgage. This will lower your repayment
but it will mean that over the longer term you will pay back
more.
-
Examine the possibility of renting your
home. You could then either stay with friends or family
until your financial situation improves or rent somewhere
cheaper. The money received in rent will help to meet the
mortgage payments.
- And finally if you are evicted for mortgage arrears your
local authority may refuse to find you a house. Because you
have been made homeless by not meeting mortgage repayments you
will be deemed to have made yourself homeless.
- There are many companies specialising in buying properties
facing repossession by the mortgage lender. They will buy
a house from an owner who is struggling to make mortgage
payments. The price they would pay would be significantly
lower than the market value and this is how such companies make
their money. However, they do provide a homeowner who is
struggling to meet the mortgage payments another option.
Many of these companies offer a scheme where after selling the
house to them you may rent it back. This means you will
avoid the hassle of moving house.
Support
There are organisations that can offer help
when faced with eviction because of mortgage arrears.
- The Homeowner Rescue Advice Centre is one such
organisation. It is a registered charity that was established
to offer advice, support, and practical assistance to homeowners
facing repossession due to difficulties in making mortgage
repayments.
-
The CAB is another organisation that can
offer advice to people facing repossession. It offers legal
advice on what courses of action are open to you and will also
be able to assist you in claiming any benefits to which you are
entitled.
-
Legal Aid may
be available to people who need help with their legal costs.
It can help fund a solicitor to deal with your case. The Legal
Services Commission is involved in the process of providing
legal aid. It can help pay for legal help from a lawyer and
help pay the cost of preparing a case for court. Whether you
are entitled to assistance with your legal cost will depend upon
your monthly income. If you receive any benefits you will
automatically qualify for Legal Aid. Owning a home outright or
having over a certain amount of savings in the bank may affect
your entitlement to Legal Aid. Your solicitor will be able to
advise you as to your entitlement.
-
Shelter, the housing and homeless charity,
is another organisation that can offer advice. They have a
helpline dedicated to assisting homeowners faced with
repossession.
Remember that before your lender can repossess your
property two condition must be satisfied:
- the lender has a Court Order for
repossession of the property; and
- the Court must also have issued a
Court Bailiff with a warrant to evict you.
Unless these conditions are met the lender
cannot repossess the property!
