Is your home under threat of Repossession?
Have the UK Government provided enough help for people in this situation? We do not think so, if your one of the unfortunate people above, have you tried these five ways to save your home from repossession.
Have you:
Tried to re-negotiate your loan with your lender.
Tried to qualify for the Government Mortgage Rescue Scheme.
Tried to qualify for Mortgage Interest Benefit.
Tried to find a Sale and Rent-back company to help.
Tried to obtain a re-mortgage or loan to repay your lender.
To re-negotiate your loan with your lender:
Most lenders will only go so far with adjustments of your monthly payments, and only tolerate short periods of no payments or reduced payments and they usually demand an extra amount to reduce any arrears. Many people are forced into unrealistic repayments which they cannot afford but which are then fixed by a suspended possession order.
A suspended possession order is a constant threat from your lender as they can apply for a 28 day eviction warrant should you default at any time under this order. Once your lender has repossessed, they can sell for any figure they wish, often for well below the market value of the property and if there is a shortfall against what you owe, plus their costs, they can chase you for up to 12 years for this amount.
Don’t forget, your lender will continue to add the monthly mortgage payments to your debt until the house is sold, and you will not have access to any equity you might still have left in the property either. The property could be unsold for years. left to deteriorate and even be boarded up or sold at auction, all further reducing its value. Lenders could even force the sale or repossess the next property you own if they trace you within the 12 year time span and you are unable to meet the shortfall and you have equity in your new house.
The credit agencies will hold the repossession on their registers for six years and this will have a severe restriction on your ability to obtain credit for that time period.
To qualify for the Government Mortgage Rescue Scheme:
Unfortunately, this Government initiative has offered very little help as the number of people who qualify are a very small percentage of those who need assistance. The scheme only operates with a small number of lenders who are members of the scheme and only then if the lender at its discretion decides to put you forward for possible help.
You will also have to prove that you have very vulnerable family members living with you, such as the very elderly, the disabled, a pregnant woman or very young children and who would be eligible for homelessness assistance and be in mortal danger if made homeless.
You cannot be the owner of second homes or investment properties and the total household income must fall below £60,000 per annum. You must not have savings of over £16,000 either. You also have to prove that your house is not too big or too small for your family’s needs and submit to an inspection by the council.
All negotiations with your lender have to have been exhausted and you will have to have had a financial circumstances appraisal conducted by the scheme operatives or CAB. The main problem though has been the maximum permitted market value allowable under the scheme of £120,000 which most regions adhere to.
To qualify for Mortgage Interest Benefit:
This may not be straightforward as the benefit is only paid in respect of the amount of the original mortgage sum used to purchase your home plus any essential, (not cosmetic), improvements that have increased this mortgage accordingly.
Many people who have re-mortgaged to raise capital for other reasons or to consolidate other debts find that the benefit does not cover these amounts. Only the interest element of the qualifying amount of your mortgage would be covered and there is a maximum limit of £200,000 beyond which no help is available.
The benefit only assists for mortgage loans where the interest rate is 3.69% or lower, so if your lender is charging you a higher rate of interest, the benefit will not cover all of the interest due. Of course, you have to qualify for the benefit in the first instance by being on income support or job seekers allowance or similar benefit.
To find a sale and rent-back company to help:
Very strict regulation has reduced the number of these companies to a mere handful and their qualifying criteria is now very restrictive. Most people do not qualify for their assistance for these reasons.
To obtain a re-mortgage or loan to repay your lender:
The number of mortgage lenders left operating in this market are almost negligible. If you find yourself in the position of having mortgage arrears of even more than one month in the last twelve months and/or any poor credit history you will almost certainly not be offered a re-mortgage or a loan.
Even if you have kept an immaculate payment history, most re-mortgages have very limited loan to value percentages and their rulings over income qualifications are now extremely stringent. To add to these problems most of us have suffered significant property price falls.
But I don’t qualify for any of the above, we here you say. Don’t worry, the help you need is available. There are an increasing number of individuals who are in the unfortunate position of being in possession of an eviction notice, or who need a cash sale and are looking for a quick solution.