Repossession and home loans, tips to avoid losing you house.

Repossession and home loans, tips to avoid losing you house.

Moving house is on the top five most stressful and traumatizing events in your life, right up there with divorce and losing a loved one. Moving home when your house has been repossessed is much worse, in many ways. Firstly, emotionally being thrown out of your house makes you feel insecure and raped. Our homes are a great symbol of who we are, of our feeling of safety in an unsafe world. Secondly, repossession is a disaster economically. You will not only lose your home and more than likely still owe money on your mortgage, you will be blacklisted and will find it hard to get finance for a long time. For these reasons, and I’m sure you can find more, you should do everything you can to avoid repossession. This article will try to help you think creatively and find solutions.

First let’s start with some somber facts. According to the Council of Mortgage lenders in UK, the rate of repossessions has raised by 54 per cent. And that is after the government slashed the interest rates to the ground. Despite low interest rates borrowers are struggling to pay their mortgages. What can you do?

PLAN AHEAD.

Most mortgage companies will allow you to save for the bad times. If you are currently able to pay your mortgage, plan for when you can. The majority of companies will let you pay 500$ a month more or even give out lump sums if your income is more erratic than a monthly or weekly wage. If you pay ahead this gives your mortgage provider reasons to give you a break when you struggle to make payments. The break can come in the form of interest only payments for a set time or an outright mortgage holiday for a set period.

DON’T PLAY THE OSTRICH GAME

If you are already in trouble and repossession is a serious possibility then you have to face your problems. Burying your head in the sand will not solve the problem and what’s more there are things you can do however bad you feel things are going.

The first step is to contact your mortgage provider before they do. This shows good will to your finance company and will give out the message that you want to pay your debts and will work with them. Give them a good idea of your current financial situation; the setbacks, the potential for positive change in the future. Some companies will give you a break if they feel your situation is likely to change soon. It will cost you extra interest but you won’t lose your home.

NEGOTIATE

There are all kinds of routes you can take to re-negotiate your mortgage. You can refinance your mortgage with a longer tenure and cheaper monthly payments. It will increase your interest payments and the expense of your mortgage, but you can always increase your payments and lower your interest when things get better.