If your home is at risk of repossession because of missed mortgage or loan payments, there are steps you can take to try to avoid losing your property. Acting quickly and knowing your options can make a big difference.
Contact Your Lender
Importantly, some lenders cannot repossess your house, notably if they were car loans or unsecured loans, but if the loan is physically secured against your home such as a mortgage, bridging loan or home equity loan, your property could be at risk. In some cases, it might mean taking a big hit on your credit score or being summoned to court or in arrears.
Either way, the first thing to do is to contact your lender. Explain your situation as soon as possible; many lenders prefer working out a solution over repossessing a home. Ask about options like a temporary payment holiday, which allows you to pause payments for a short time, or reduced payments if you can’t afford the full amount.
Some lenders offer loan restructuring or hardship programs that can help borrowers during financial difficulties. Open communication with your lender can sometimes lead to an agreement that allows you to stay in your home.
Get Financial Advice
Seeking advice from a financial advisor or debt counselor can provide a clearer view of your situation and help you understand all available options. Free services like Citizens Advice, StepChange, or National Debtline offer help with debt issues, including mortgage debt. You might also qualify for government programs such as the Support for Mortgage Interest (SMI) scheme, which offers loans to help cover interest payments if you receive certain benefits.
Review Your Loan Account
Sometimes missed payments or errors on your account can lead to a repossession process. Review your account and make sure there aren’t any simple mistakes, like a failed bank transfer or wrong payment date, that could be fixed quickly. If your lender agrees, you might be able to arrange a repayment plan, which spreads overdue payments across future ones, making it easier to catch up without adding extra pressure.
Modify Mortgage Terms
Ask your lender if you can adjust the terms of your mortgage. Extending your mortgage term (for example, from 20 to 25 years) can lower your monthly payments, making them more affordable.
You may also consider asking if you can switch to interest-only payments temporarily. This means you’ll pay just the interest on your loan, reducing monthly costs in the short term. Keep in mind this is usually a temporary solution, as you’ll still owe the full loan amount later.
Sell the Property as a Last Resort
If none of the above options work and keeping your home becomes impossible, selling may be the best solution. Selling allows you to pay off the loan and avoid repossession. Although difficult, this step can help you avoid the financial and emotional toll of repossession and give you more control over the situation.
Attend Court Hearings if Necessary
If the repossession process has already started, it’s important to attend any court hearings, even if these take a full year, but these can buy you some time.
Explain your situation to the judge, who may allow you to create a new payment plan. You can also request a “suspended possession order,” which lets you stay in the property as long as you meet the court’s terms for repayment.
Taking action early, reaching out for help, and considering all available options can often prevent repossession, allowing you to regain control of your finances and stay in your home.
