With the mortgage landscape continuing to change as a result of interest rates increasing month by month, repossessions are also on the rise. If you are worried about your house being repossessed, we’ve compiled a list of key questions and answers that might help you understand what can be done to combat this issue.
Yes, house repossessions have increased by 50% in the first three months of 2023, demonstrating just how much the interest rate hikes are affecting the average UK homeowner. This percentage increase equates to 1000 repossessions occurring between January and March 2023, with over 76,000 mortgages being in arrears of over 2.5% of the outstanding balance (up 2% from the last quarter of 2022).
Mortgages law states that a bank can repossess your home if you have been in arrears for 90-180 days because you have been unable to keep to the monthly payments stated in your original agreement. Once this decision has been made, the bank will need to contact a judge and get an order for repossession, which could take up to nine months.
You are unable to sell your home once it has been repossessed, as the bank will be the ones to auction it off and take the money from its sale. However, you could sell your home to avoid repossession, which might help you clear some of the arrears and mortgage amount. The lender may delay any repossession action if you show that you are in the process of selling your home.
Simply put, paying your monthly mortgage payment on time and in full is the only way to avoid repossession. If you are struggling with payments and are looking for a way to pay your entire mortgage, you might want to consider Equity Release.
For homeowners over the age of 55, an Equity Release plan, such as a Lifetime Mortgage, allows you to secure a lump sum from the value of your home that can be used to pay off your mortgage. With no monthly payments, the loan amount will only need to be paid off after you pass away or enter long-term care, allowing you much needed breathing room to enjoy the later years of your life.
