House Repossessions - Reality Bites

A few years ago bankruptcy and house repossession were considered the domain of the feckless or business failures. How times have changed! The growing number of personal or business bankruptcies is testament to the change in our attitude to this.
The general acceptance of these predicaments doesn't lessen the emotional pain and stress that this generates within a family. The loss of a family home due to repossession and having to relocate to a new area that is unlikely to be as close to schools or work will have a deep impact on parents and children alike.
Unfortunately by the time your lender is talking about repossession, time is really beginning to run out. So, how have you arrived at this precarious position? Ignoring the red reminders isn't going to make them go away. Sleepless nights over a prolonged period worrying about money will affect your reasoning abilities, but disappearing into a bottle isn't the solution either. Blaming yourself or your partner won't resolve the problem, nor is arguing about whose fault it is. What you have to do, and fast, is to try to find a solution or way out.
Having your property repossessed is just about the worst option for you. Any equity you may have could be lost as the lender may well sell at auction or significantly below market value, simply to recoup the money they have lent.
1. Don't ignore the warning letters. Seek help from the Citizen's Advice Bureau. They should be able to put you in touch with a debt advisor. CAB offers a free service - so don't use any agency that requires upfront payment, you will just be compounding your problems with another debt.
2. Speak to your lender. There are horror stories about how badly they treat defaulters, but the advice you will receive from just about everyone is to let them know of the situation. You may be having problems because of a prolonged period of ill health; redundancy; steep rises in mortgage payments that you can no longer afford; personal difficulties, which leave you unable to work or other similar situations. Lenders are required to be as helpful as possible but remember they are not providing social housing - they are running a business.
3. One possible solution is to sell your home and rent it back from a company that specialises in buying homes for cash in a fraction of the time it can take on the open market. There are many companies providing this sort of service and the rates offered range from 75-85% of your property's current value, depending on who you use. The beauty of this option is that any equity built up since you first purchased your home will be realised rather than lost. You also get to stay in your existing home on a rental basis. Check to see if the company offers a guaranteed long-term tenancy scheme (rather than short-term), which provides tenants with the peace of mind and security that should enable them to start afresh. The existing mortgage is paid off, you get a lump sum of any remaining equity and those horrible repossession nightmares just disappear.
4. Another option is to try to sell your home and stay with family or friends until your situation improves or find somewhere to rent that is affordable. You will need to factor in here the time it can take to sell your home on the open market, which can be anywhere from 3 months to a year. A sell and rent back company can complete within 3-5 weeks.
5. See if you can get housed by the local council. Given the length of many council housing waiting lists I wouldn't hold my breath!
Having your property repossessed isn't the end of the story. Repossession will affect your personal credit rating for years to come, which will make it even harder and more expensive to get back on the housing ladder. Indemnity insurance will be increased and you will find it harder to get credit.
Above all, try as early as possible to recognise the warning signals and act on them. Cut your expenditure on non-essentials to zero. That means no cigarettes, no drink, no chocolate or other "little" things to make you feel better. Believe me, all those "little" things add up to one huge hole in your budget. Face up to the situation and try to find a way round it or seek advice on the best solution from a debt advisor.
You don't need to continue to lose sleep over your financial difficulties. Sell & Rent Back may not be the best solution, but it is an option worth considering if you are currently facing repossession and can see no immediate solution.
If you need to sell your property fast visit http://www.sell-my-house-fast.org and complete the online form for immediate help - sorry UK only.
Article Source: http://EzineArticles.com/?expert=Jason_Coghlan