What Happens if my Home is Repossessed?

If you fall badly behind with your mortgage repayments, your lender can repossess your home and sell it.

Obviously, your first concern will be finding somewhere else to live.

But the nightmare won’t end there.

Once you get back on your feet, it may be several years before you can persuade a mainstream mortgage lender to give you another loan.

In the meantime, you’ll probably be able to borrow from one that specialises in bad credit mortgages, but this will cost you considerably more.

that’s still not the end of the story though.

The Rules on Outstanding Mortgage Debts

If your lender sold your home for less than you owed on your mortgage plus interest and sale fees you can expect it to come after you for the shortfall.

According to the law in England, Wales and Northern Ireland, lenders have up to 12 years to start chasing you for the outstanding amount.

But those that are members of trade body The Council of Mortgage Lenders adhere to a voluntary agreement to act within six years.

In Scotland, lenders must usually act within five years.

But no matter where you live in the UK, if it’s thought fraud was involved, there’s no time limit for beginning recovery action.

And, whether your financial difficulties were your own fault or not, once your former lender has begun the chase to recover its money, there is no limit on how long it can keep after you.


How to Avoid Repossession

that’s why you should never bury your head in the sand if you can no longer pay your mortgage.

Contact your lender right away to discuss your options.

For more on this, and the various sources of help, read If You Have Problems Paying Your Mortgage