The repossession process...

 

What happens if you don’t keep up your mortgage payments? 

 

Whenever you take out a mortgage, second charge or any form of borrowing charged against a property you will see the large warning in bold letters – “your home may be repossessed if you do not keep up repayments on your mortgage”. 

Lenders due use repossession as the very last resort in the event that you do not make up your mortgage payments. But for them to so do is a lot of hassle and a costly exercise for them to execute, so before this blog scares the life out of you, please read on and learn about the entire process before that happens. 

 

The blog is to educate people on how the process and what you can do to avoid this happening to you. 

 

As the mortgage you are given is tied to the property until you pay it off Lenders have the right to take the property back in the event you fall behind on your payments. All lenders will take a 1st charge over your property for as long as you have a mortgage with them. The 1st charge shows anybody who looks on the land registry who will be paid 1st if the property is sold. The lender will be paid 1st and then the property owner and then anybody else who has a charge on the property. The order of the charges dictates who gets paid when and how much they will be paid depending on the charge. 

 

If you fail to make your mortgage repayments lenders will begin the process outlined below, step by step until either the issue is resolved ( you have made up your payments ) or they have repossessed your home. 

 

You will technically be in arrears after missing a mortgage payment for 1 month. As you pay a month in advance it would be 2 months between payments that you will be deemed to have missed one. At this stage you will receive a letter from your lender to ask you to make payment as soon as possible. 

 

If you continue to miss another payment which would be 2 missed payments and 2 months of arrears you will recieve a further letter from your lender with the invitation for a meeting to discuss settling your arrears. 

 

A further letter will be sent from yoru lender outlining the consequences of further missed payments and failure to pay up your balance. 

 

This is the stage where your lender will begin the legal proceedings to take back possession of your home. You still have an opportunity at this stage to rectify your missed payments. 

 

The repossession order will be enforced, and you will legally be forced to leave your home. 

 

You will need to vacate your home. 

 

Any missed payments on your credit file will impact your ability to secure a new mortgage deal in the future and take on any other lines of credit too. So if you are struggling with your mortgage for any reason at all contact your lender directly and they can work with you under the new mortgage charter to help you cope with your mortgage payments and put a plan together to support you. 

 

Like we said at the beginning of the blog, repossession is the final resort.