What is repossession?
Repossession is when your mortgage lender applies to a court to take your home from you if you miss mortgage repayments or those of other loans secured on your home. They do this in order to sell the property to make back the money that you owe. Repossession is a last resort, and you will be faced with actions before it comes to this. Your lender must discuss your financial situation with you and therefore give you a chance to pay off the outstanding repayments. If you do not comply, they will take it to the courts. The judge will then decide if the repossession should go ahead or not. It may not go ahead if you show you can meet the repayments and if you clear the outstanding payments within a suitable amount of time. If not, usually the court will instruct the repossession action to proceed, and you will be evicted by bailiffs.
How to avoid repossession
- Always listen to and pay attention to letters and warnings from your lender, as if you are aware of what may happen earlier on, you will have more time to find a solution
- Contact your lender as soon as payment issues arise
- Cooperate with the courts and any legal action in order to be able to explain your situation and see if something can be resolved
Can you get a mortgage after facing repossession?
It is possible to get a mortgage after having a previous property repossessed, but it can be challenging. There are a few lenders willing to offer good rates as long as you fit within specific criteria. The date of the repossession makes a difference to the mortgage you can obtain. It tends to become possible around 3 years after the repossession has cleared, although exceptions can be made if you have a larger deposit. The repo will also stay on your credit report for 7 years.
The other factors are as follows: The size of the repossession - if the repo was millions of pounds on more than one mortgage, this would potentially pose a bigger threat to a lender; therefore, if it was on a lower-valued single property, you will be more likely to obtain a mortgage. Along with this is the reason for the repossession. Getting advice can be really helpful to find out what is best for your personal situation and to know for sure if your expectations can become a reality.
Still unsure or need more information? Don’t be scared off by uncertainty. Contact View Finance today on 0333 320 8658 or send us an email info@viewfinance.co.uk, and our advisers will work to the best of their abilities to help you find what you are looking for.
