Advice to help you understand the process
If you are struggling to pay your mortgage, have mortgage arrears or are concerned that you soon won't be able to keep up with your mortgage payments, the advice below may be able to help you to better understand the process.
When you fall into arrears without notifying your mortgage lender (the people you owe money to), they will issue you a claim. This will be sent to the address of the property for which you pay the mortgage.
Receiving a claim from your lender does not automatically mean your home will be repossessed.
There are lots of opportunities for the repossession to be postponed or stopped if you:
- make mortgage arrears a priority: mortgage arrears are considered a priority debt and should be dealt with immediately
- act as soon as possible: The earlier you contact your lender about your changing financial situation, the earlier they can help you
- ask or seek help if you don't understand the process: It is important that you understand the process of the possession procedure
- don't take out another loan to pay your mortgage: This could potentially make your debt worse in the long-term
- contact your lenders and seek financial advice as soon as you can
There are steps at each stage in the possession procedure where, if you act quickly and accordingly, you can stop the repossession from taking place.
If you are concerned about mortgage arrears or an impending possession order, complete the housing support form.
Mortgage repossession procedure
This is a brief outline of the possible outcomes which will depend on your type of mortgage, the size of your mortgage, the size of the arrears, your lender and your financial situation.
Your lender has issued a claim
Do not ignore the letter. Reply and explain why you have not met your mortgage payments.
There are a few possible options at this stage, including:
- a payment holiday which is a temporary freeze on your payments. This must be agreed with your lender and is more likely to be approved the earlier you contact them
- where your income has been reduced (for example, because you have changed from full time to part-time work), you could switch to interest-only payments on a temporary basis
Agreements will differ from lender to lender so it is important that you are honest about your financial situation with them. This way a solution can be agreed as quickly as possible.
Depending on the outcome of the above negotiations there may be a hearing at court.
There are different outcomes that could occur at the hearing:
- Suspended order - The court decides that the lender has the legal right to the property but you could still make the mortgage payments, which the court will assess. You can ask the judge to suspend the warrant for possession on the condition that you can continue to make the agreed payments. If you are in receipt of some benefits, you could apply for SMI (Support for Mortgage Interest) which is government support to pay the interest on your mortgage only
- Outright order - If the court decides that you are unable to make the agreed mortgage payments then the possession of the property goes to the lender. You will have either 14 or 28 days to vacate the property as stated on the possession order from the court. If you haven’t left the property by this date the lender will apply for a warrant of possession to evict you
- Adjournment or no order - The case is either thrown out of the court or the case is dismissed, for example, if the lender hasn’t followed the correct procedure to obtain a possession order or communicated with you correctly prior to the hearing