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Avoiding or Selling a Repossession: Top Ten Dos and Don'ts


1.  Get your Finances in Order
Before you go for help over being repossessed, you need to understand what your outgoings are and what monies you have coming in. Be clear on whether this is a permanent situation or one that is temporary, for example are you sick, or have you lost your job or are you just spending more money than you have coming in. Sign up for our budget sheet which you can do for free by emailing enquiries@designsonproperty.co.uk or calling 0845 838 1763.
 
2.  Talk to an Independent Debt Advisor
Ideally, before you start to default on any payments (ie not pay the mortgage to the lender) then speak to an independent debt CHARITY first. For example CAB, National Debtline etc. They will be able to advise you on your options.

3.  Speak to an Estate Agent
It might be best to talk to a local estate agent that is also a qualified surveyor. They may be better able to value your property for you so you know how much it’s worth. You need to know if it’s worth more than your mortgage, or less which will leave you in a situation of negative equity.  Find out how long it might take to sell the property by asking for a ‘six week price’ and a ‘quick sale, two week price’. 

4.  Speak to or Write to your Lender
Once you are clear on your financial situation and understand from independent debt charities what your options are, you will need to contact your lender. Ideally book an appointment with them or write a letter that is checked by one of the charities. Explain:-

1. Your current financial situation.
2. What you can afford to pay now and in the future.
3. If you have decided to sell, what the likely property value is and how long it might take to sell. 

5.  Keep paying your Mortgage if you can
Apart from keeping fed and warm, your mortgage is incredibly important to keep paying, otherwise you will find it very difficult to get credit in the future AND you will still be chased by the lender for outstanding payments and money owned on the property for years to come. Although it’s hard, try to cut out any ‘non essential’ items such as Sky or Virgin, smoking, going to the pub, DVDs, CDs, computer stuff. You can use your local library and other facilities for free internet access and to hire DVDs, CDs, books and even read the local newspaper.

6.  Don’t sell to ‘anyone’
Lots of unscrupulous property investors and agents will try to buy your property at a ’massive discount’ and make out they are doing you a big favour. It’s important to understand that agents and property investors aren’t the only people you can turn to as typically they will want to pay 25-40% LESS than your property is worth. That could be the difference between you selling your property and having some money left over or having nothing at all.

Other, professional companies will buy for 10-15% less than the market value. If you want to find out who these companies are, email enquiries@designsonproperty.co.uk or call 0845 838 1763 and we will find the best company for you, arranging for three valuations which we will do for free. 

7.  Beware companies and property investors offering to ‘buy’ and ‘rent back’ to you
Since the summer of 2008 it has been ILLEGAL for companies that are not registered with the Financial Services Authority (FSA) to offer to buy your property and then rent the property back to you. This is because some people and companies have being buying properties at a discount on the ‘promise’ of allowing you to rent it back, then increasing the rent substantially OR kicking you out within months of you thinking you would be allowed to stay as long as you needed.

Approximately 99% of the companies and people that used to operate sale and rent back schemes have now STOPPED as they have chosen, or failed to meet the FSA’s criteria. For more information on 'sale and rent back schemes' visit the FSA and the Rent Back Charter Association.

8.  Independently check any Valuations
There are lots of ways of valuing a property. Some companies and people will do this fairly others will try to justify the lowest possible valuation they think they can get away with. Don’t get caught with unscrupulous investors who cheat you out of tens of thousands of pounds to line their own pockets and take advantage of your situation.

We can carry out an independent desktop valuation for you from £99, giving you the likely minimum and maximum value your property is worth. Alternatively we can find an independent surveyor who will value your home for around £150 –£200. We may even be able to negotiate this fee being paid by the buyer for you.

9.  Use your OWN Legal Company
Many companies will ‘offer’ to pay your legal fees. That’s fine as long as you don’t have to use the legal company they suggest. Although most legal companies are good at what they do, some aren’t and will structure the contract in favour of the buyer not the seller (ie you!). It’s also important that your debts are discharged properly with the lender. So you MUST have a legal company that has dealt with repossessed properties before. 

10.  Check your Credit Rating
If you do default on your mortgage payments and end up getting repossessed, you need to check with your credit companies what your new credit rating is as this may affect you being able to buy a mobile phone, secure a loan and will certainly impact on you securing a mortgage in the future. So it’s essential that you check what your new credit rating is and understand how this will affect you. Once you have paid off all your debts, make sure that the lender updates your credit rating to reflect the fact that you HAVE repaid your debts.

Finally, don’t ever ‘just hand back the keys’ to a lender. They will still chase you for outstanding monies and mark you down on your credit rating, so however ‘tempting’ it might be, don’t do it as it’ll work out worse for you in the end. 

If you are worried about how to pay your mortgage, feel free to contact us at enquiries@designsonproperty.co.uk or on our 0845 838 1763 number (this means you get charged at a local rate) and we’ll do our best to find a solution for you.

NALS Conference Chair 2016

Kate's Consumer Portal

Propertychecklists.co.uk

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