When your house is repossessed, its important to remember that as the owner of the property, you will be the one who is liable to pay the difference in the outstanding loan amount and the amount the house is resold for.
This cost can often run into the thousands. Between the time that the home is repossessed and sold again, there are other costs which need to be paid – solicitor fees, estate agents fees and all interest accrued will need to be paid by you.
Once the property is sold the mortgage company can chase you for the outstanding amounts for a period of 12 years if the home has been repossessed in the UK. In Scotland, the law states that you are liable for a period of 5 years.
The best way to avoid high payments is to look to try and sell your property as quickly as possible yourself. Repossession homes are often resold at a cheap price in a property auction. By selling your property yourself, it may be below market value but not as low as a potential auction price.
Read about selling or remortgaging your property before repossession.
Also read Stop your home being repossessed.
Once your property has been repossessed the mortgage company must follow some guidelines when contacting you. These rules have been set by the Council of Mortgage Lenders (CML).
Once the property is resold the mortgage company will contact you by recorded delivery within a 28 day period. They will send to you
1) Address details of the repossessed home.
2) The date at which the property was sold.
3) Details of the sale of the property including details of seller and buyer.
4) The price at which the repossession home was sold.
5) The method of sale of the property, eg. Auction
Remember that the lender will be obliged to sell the property at the highest price possible after repossession, but in truth the property will often be sold under value and then it is you will be paying the difference.
If you are suffering from financial difficulty and are unable to make mortgage repayments, then we would advise conducting the sale of your home.
Our article on selling or remortgaging your home before repossession will help you.
