What can I do to avoid repossession?

Repossession is a stressful situation for any household, and one which has affected increasing numbers of people as the financial crisis has progressed. Rising costs of living over the past year have made it difficult for many people to meet all their commitments - and when that means missed mortgage payments, your home is at risk.

However, repossession is not a five-minute process. You will not lose your home the day you miss a mortgage payment. Repossession is neither an ideal situation for you nor your lender - and as such, your mortgage lender will want to help as best they can.

In reality, there will almost certainly be enough time to act. Here we look at some of the things you can do if you are facing repossession.

Rule #1: talk to your mortgage provider

First and foremost, you should always contact your mortgage lender at the first sign of trouble. Whether you are one or three months behind on mortgage payments, or even if you only think you might be about to fall behind, your lender will be eager to look at what steps can be taken to rectify the situation.

In some cases, your mortgage lender may be able to offer you a payment holiday, in which your mortgage payments are suspended in order to allow you to get on top of your commitments. Be aware, though, that the further behind you are on payments, the more difficult this will be.

Alternatively, your mortgage lender may agree to simply reduce your payments for a few months - this way, your mortgage debt is being reduced, giving you some relief until your situation improves.

Get professional debt advice

If other debts are getting in your way, another option is to speak to an expert debt adviser to see if you can reduce your outgoings on your unsecured debts. There are several ways you can approach this.

Firstly, you could work with your debt adviser to draw up a debt management plan. This will involve making arrangements to repay your unsecured debts based on how much you can afford, which could free up cash to help you repay your mortgage arrears in instalments. Ordinarily you will pay this on top of your existing mortgage payments, but it might be possible to arrange to pay off your arrears during a payment holiday.

You could technically do this on your own, or you could ask an expert to help you - someone who knows the market well and who has dealt with similar cases before.

Alternatively, you could take out a debt consolidation loan in order to group together your existing debts. The main advantage of this is that you can reduce your monthly payments by spreading them out over a longer period of time - potentially freeing up much-needed cash to put towards your mortgage. However, it is important to remember that repaying your debts over a longer period is likely to mean the total amount you repay increases in the long term.

Don`t hesitate

However you decide to tackle your mortgage arrears, the sooner you do it, the better. Every mortgage payment missed is another one you will have to make at a later date - and the interest and charges can grow more quickly than you may think.

Tags: repossession, avoid repossession, repossession tips

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