Your house being repossessed can be a devastating experience. With the loss of jobs due to the pandemic and uncertain financial times, you may have found yourself late on a couple of payments on your mortgage for one reason or another. If you find yourself in a situation where a court is about to issue a repossession order on your property, the following tips will help you chart the way forward as you try to salvage the situation.
Avoid Ignoring the Situation
When the lender calls you regarding your late payments or default, panic can set in, making you ignore their calls, emails, or messages. You may be tempted to go as far as changing your current address in your bid to evade them. However, this will only make the situation worse. Instead, make yourself reachable, respond immediately or as soon as you can. Showing availability and responsiveness may buy you more time as you find funds to make your payments.
Reviewing Your Finance
Work out on your monthly expenditure by cutting back on the amount of money you use on shopping, food and clothes, internet and electricity usage, and leisure activities. This will help you set aside extra money that you could use to catch up on your late payments. Additionally, you could look for other part-time jobs to increase your income, enabling you to pay your lender.
Negotiating With the Lender or the Bank
The next best step is to negotiate with your lender or financing bank. If possible, book an appointment with them and plead your case. Be honest with them about your current financial situation. Let them know what you are doing to turn the situation around. If you can, inform them that you could make a smaller monthly towards the mortgage and find out if it is possible to extend the mortgage period. Showing such goodwill to your lender may bear fruits, buying you an extension on the repayment period.
Consulting Your Mortgage Broker
Contemplate seeking advice from a reputable mortgage adviser for guidance on the best financial options you may use to refinance your lender. If possible, they will advise how you can receive a bridging loan or other forms of assistance that will help stop any repossession proceedings initiated by your lender.
Checking on Your Insurance Policy
It may be easy to forget about insurance altogether with the stress that comes with a looming repossession. So call up your lender, and inquire if you had a mortgage insurance policy. Your insurance could be the breather you need, as some policies cover up to 150% of the loan should your loss of income arise from an illness, or an accident, or other terms specified in the insurance policy.
Attending Court Sessions When Called Upon
You should attend all court sessions when called upon during the repossession process. If you are unsure about the time and date of your hearing, find out from your lender when you are served with a repossession notice. The courtroom will provide you with an excellent opportunity to plead your case by filling the defence form with reasons for your default. Additionally, The court may grant a suspended repossession order by the judge, enabling you to stay in your house while making payments as agreed.
Selling The House
If all other options fail, know you can still sell your house even with a repossession court order being issued on it. This is especially the case when its value is significant enough to cover the mortgage costs. After that, use the remaining money to settle somewhere else, and get your life back on track.
Conclusion
A house repossession is an overwhelming experience. However, communicating with your lender, negotiating with them on possible payment options may buy you some time to catch up on your late payments. Additionally, consulting your mortgage broker on available refinancing options, attending court sessions, and checking your insurance policy are practical steps you can take before considering selling your house or the repossession is complete.
