Repossession: Sell a house with mortgage arrears

Repossession: Sell a house with mortgage arrears

Facing repossession is one of the most stressful and dreadful experiences a homeowner could go through. You could lose your house, get bad credit and get into more debt. Selling a home with mortgage arrears is usually one of the last steps to take if you are struggling to pay back your creditors, however it might be your best solution. We Buy Any House is here to help with a friendly and professional advice on how to sell your property fast, for the best price.

What to do before you sell a house with arrears

If you struggle to repay your mortgage, your first step should be negotiating repayments with your creditors. Contact your lender as soon as possible. Most creditors and banks want to help you pay them back – they might be willing to change your mortgage contract by reducing the instalments and increasing the mortgage length, allowing you to pay less over a longer period of time. If you are going through temporary financial struggles and explain your situation to your mortgage lender, your payment could be deferred or you might be allowed to take a payment holiday.

Renting out your home to pay off the mortgage could be an excellent solution if you can live rent-free in another property. However, it is important to note that becoming a landlord might result in other costs such as estate agent fees and repairs. If you need to act fast, renting out isn’t the best solution as moving out, preparing the property and finding tenants could be very time consuming.

Read more: How do I sell my house faster?

No matter what your current situation is and whether you have arrears yet, speaking to your mortgage provider is a crucial step which will definitely help you and the lender find the best solution. Missing out mortgage repayments will negatively affect your credit score and might even trigger the repossession process.

Who can help you stop repossession?

Selling a house with arrears, preventing repossession and negotiating with your lender can be extremely difficult, especially if you have to go through it all by yourself. The government, some charities and genuine cash buyers are here to help with advice and funds. There are plenty of debt management companies and organisations to help you manage your finances and offer emotional support and advice. You could also be eligible for Support for Mortgage Interest (SMI) scheme.

We Buy Any House can help you with a free, no-obligation house valuation and cash offer. Our team has excellent knowledge of the house market in the UK and decades of combined experience in the property industry. We have helped many home owners across the UK successfully prevent repossession and take control of their home and finances. To find out more about how we can help you, simply get in touch with us or request a call back.

What happens when you are repossessed?

According to law, if have been in arrears for 90 to 180 days, your mortgage lender can repossess your home once they have obtained a court order of repossession. After the property is in the possession of the mortgage provider, they are legally obliged to sell your home for the best price they can possibly get. Your lender would normally get an independent house valuation and expert advice on the house market and then try to sell the property as quickly as possible. According to the Council of Mortgage Lenders
  “If the sale of the property results in a surplus after all the money owed to the lender and any other secured lender has been repaid, then this surplus is returned you. Your lender should notify you of the surplus but if you cannot be contacted, the money will either be held by the court or your lender until you can be contacted…But if the sale proceeds are not enough to pay off the money you owe to the lender, then there is a “shortfall debt” which you still owe your lender after possession.” You could avoid the negative consequences of repossession by voluntary repossession or by selling your house as soon as you realised you wouldn’t be able to repay for your home. Alternatively, your property can be repossessed, you could end up homeless and still in debt. Learn more about the repossession process on Shelter’s website. Related: Fees to pay when selling your home

Selling your home when facing repossession

If repossession is inevitable, your best option is to take matters in your own hands and sell your home yourself. You can get a better price for your property, be in control of the sales process and avoid bad credit. Speed, professional advice and taking action on time are crucial in such situations. Firstly, speak to debt advisors who can help you manage your budget, including other debts such as loans, credit cards and outstanding bills. Secondly, find a reliable and legitimate cash buyer who can purchase your property fast, for cash. Search for companies who offer realistic valuations and who can actually purchase your property for cash. Beware of estate agents promising a high but unachievable price for your property. Avoid wasting time and money and go for professional cash buying companies. At we can instantly assess your case and offer free advice, house valuation and cash offer. Before selling your house, think about where you are going to live next, whether the money you would receive from the profit would be enough to cover the mortgage and if your local council can temporarily help you with housing.