“I’m behind in payments…will I be giving my house back to the bank in London?”
Nobody wants to lose their home. But sometimes financial circumstances turn against you and those financial commitments become simply too much to manage.
If your situation progresses too far, you may be forced into the unfortunate situation of having to give your house back to the bank in London, leaving you temporarily without a place to stay. In addition, there may be long-term consequences, including a dramatic and long-lasting impact to your credit (and your ability to get a house in the future).
No one wants that. That’s not an ideal outcome. Fortunately, there is a strategy you can take today to help you proactively protect yourself and get back on track to financial solvency.
Here’s a brief overview of the foreclosure process
The repossession process can vary depending on location and the type of mortgage you have.
Usually, if you miss a few mortgage payments, your mortgage company will start sending you notifications and then warnings. Over time, if you fail to pay back the mortgage payments you missed, the mortgage company may put your home up for public auction.
How long you can stay in your house after it is sold in auction depends where you live. At some point, however, you will need to find a new place to stay.
Fortunately, you have options!
If you wait until your home is repossessed, it can have a devastating effect on your credit rating. One option to protect yourself is to work out an arrangement with the mortgage company called a “deed in lieu of foreclosure”.
This is when you hand over ownership of the house to the mortgage company so that they save the money they would spend on repossession proceedings, which can be significant. And you get to avoid having a repossession listed on your credit rating.
You can also avoid repossession by selling your house before it’s lost at the auction. If your mortgage is paid in full then there will be no more penalties against you and your credit rating. (If your mortgage isn’t paid in full, you will need to make up the shortfall).
Here’s an example: Let’s say you owed £100,000 on your home and you sold your home to us for £90,000. You would give that money to the mortgage company, along with £10,000 to make up the short-fall, and your loan would be paid off. (If you contact a property solicitor or conveyancer, you may be able to negotiate a deed in lieu of foreclosure deal in which the mortgage company agrees not to go after the difference in exchange for the deed to the house.
At Sell My House London, we’re professional property investors. Contact us today at 020 3633 9175 to find out what we can offer you for your house — even if it needs repairs.
I want to avoid giving my house back to the bank in London!
Why do people choose to sell their home instead of going through repossession? (After all, they still don’t live in their home anymore).
Well, losing a home can be difficult but the impact on your financial situation and your credit is considerably less than if you simply wait out the repossession process. In fact, going through repossession could impact your credit score by as much as 100 to 150 points. So the short-term challenge of selling your house is still a better choice than the long-term pain of giving your house back to the bank.
Interested in learning more about a proactive option besides giving your house back to the bank in London? Call us at 020 3633 9175 or fill out the form to get more information