Even though a finance company has begun home repossession proceedings, it does not mean that there is still not an opportunity for the borrower to sell. A homeowner has the right to sell or remortgage their property at any time even up to the day when the locks are due to be changed by the court bailiff.
Selling Before A Case Goes to Court
A borrower in financial difficulty needs to always consider the option of selling their property before it gets repossessed. For example, if the homeowner knows that they are unable to make repayments and the property will be repossessed anyway. In this case if the property is repossessed, it will be more than likely that the home will be sold at auction at a lower price than if the borrower were to sell it themselves. People are often reluctant to take the option of selling due to sentimental attachment to their home and the thought of moving being too hectic.
If a homeowner decides that their best option is to sell the property before it is repossessed, they should speak with lender immediately and inform them of what they have planned. The lender may be inclined to provide the borrower with more time in order to sell the property, particularly if their is equity in the property. It is recommended that homeowners keep the mortgage company informed on the how the sale is progressing. Documents which will prove to the lender that a real sale is under way are mentioned below:
* Documentary evidence of correspondance from estate agents.
* Evidence of any offers which have been put forward at a price sufficiently high enough to recover the mortgage.
* Evidence of letters from a solicitor providing confirmation that a sale is in agreement or is in progress and the date of completion of the sale.
If the mortgage company is satisfied that they will be recouping their loan without having the inconvenience of going through the court process and then have to sell the property themselves, then there is a strong possibility that they will be willing to wait.
Selling Once Court Proceedings have Started
The majority of lenders will carry on with the repossession proceedings in court until they are provided with documentary evidence which illustrates that a property has been sold or is in the process of sale. The mortgage company will require evidence of an exchange of contracts, this to prevent issues of non sale. People prematurely say their property is “sold” the moment any offer has been received. It is important to note that there is no guarantee of any sale until contracts have been exchanged.
Selling After the Possession Hearing
Courts will also provide borrowers the opportunity to remove all arrears on their mortgage account and avoid home repossession. This is done when the borrower goes ahead and carries out sale of the repossession home by themselves. When attending court, a borrower can advise the judge that the property is up for sale and is on the market. Upon hearing this many judges will grant a 56 day possession order. This will providethe borrower with more time and a good opportunity to make a sale. On occassion the magistrate may grant a period of 3 montsh to carry out the sale. The majority of court judges will want to see documentary evidence that the property which has now been listed has been offered at an adequate price whcih will cover the mortgage when sold. A case can also be adjourned when there is evidence that a sale is pending. This will provide the homeowner with the opportunity to complete the sale and hence avoid home repossession.
Selling Once an Eviction has been Scheduled
A borrower has the ability to prevent an eviction from taking place by selling the repossession property. The court judge will expect to see clear evidence illustrating a sale is pending. In a case where the property is being sold at lower price than the debt on the mortgage, it will be highly unlikely that the magistrate will put a stop on the eviction. If the homeowner can show that they are able to provide money to cover the shortfall on the mortgage then the courts may consider stopping the eviction.
Re-mortgaging
It is important to remember that although it may be easy to find a company which will provide the homeowner with a remortgage on their property, the deal which will be put on the table may not be very competitive and repayments may be extremely high. Another point to note is that missed payments on the original mortgage agreement can result in stains on a credit report and thus limit the options available when it comes to finding a remortgage.
The courts and lenders both view a remortgage as similar to an actual sale. If you are remortgaging at this stage of the repossession process its important to make sure that the lender is kept in the loop as to what is actually happening. They should be provided with any documentary evidence which proves that a remortgage is due to be completed. Judges also can provide a homeowner with further time and stop a repossession if they are happy that a remortgage is due to be completed.
Conclusion
It is important for borrowers to highlight and act quickly as soon as they begin to struggle to make payments. This will give them more time and improve the chance of avoiding repossession by selling their property for a better price than an auction would guarantee or getting a remortgage at a more competitive rate than they would get once more repayments have been missed and their credit report is tarnished.
Related posts:
Tags: Buy A Repossessed Home, buy repossessed homes, home repo, home repossession, property repossession, repossed home, repossessed homes, repossessed property, repossession houses, repossession properties
[...] Read about selling or remortgaging your property before repossession. [...]