Your Ultimate Guide To House Repossession
Facing repossession? Explore options like negotiation, refinancing, or a quick cash sale with We Buy Any House for a stress-free solution.
Having your house repossessed can be one of the most stressful and emotionally challenging experiences you can have. House repossession typically occurs in the form of foreclosure when mortgage payments are missed. While this can be difficult, knowing your options can help you move forward down a positive path.
What is House Repossession?
Defaulting your mortgage payments can trigger the risk of repossessing your property. Defaulting on mortgage payments means failing to make the required loan payments on time, which would have been agreed in the mortgage contract.
When you default on these payments, the lender may take legal action, which can lead to foreclosure, which is the process where the lender takes ownership of the property (also known as repossession) and sells the property to recover the unpaid loan amount.
Having your house repossessed can be intimidating, but if you understand why repossession occurs and what you can do to avoid it, you will be able to retain control of your property.
If you want to sell your property before repossession takes effect, We Buy Any House can help you sell quickly and alleviate stress.
What is the Pre-foreclosure Process?
Pre-foreclosure indicates that the lender is beginning the legal process to foreclose a property. If you are currently in a pre-foreclosure state, acting quickly and exploring options to keep your property or settle your debt is essential. To give you a better understanding of the pre-foreclosure process, here is a brief timeline:
- Day 1: First missed mortgage payment
- After 30 days: Late payment is reported to credit bureaus
- After 45 days: Lender reaches out to work on foreclosure prevention
A second mortgage payment is missed
- After 60 days: Another late payment is reported to the credit bureaus
- After 90 days: Lender demands payment and reports a third late payment
- After 120 days: The foreclosure process begins
This 120-day period is the pre-foreclosure phase, during which lenders must offer ‘loss mitigation’ plans to help borrowers catch up on payments. You risk the lender proceeding with the repossession of your property if no alternative plan is agreed upon.
A few options are available to mitigate the emotional and financial damages
How to Prevent House Repossession
- Extend your mortgage term
Reduce monthly payments by spreading them over a more extended period.
- Request a mortgage payment holiday
Pause payments temporarily until you regain financial stability.
- Capitalising your arrears
Show your lender that you’re trying to deal with the problem.
- Switch lenders
Seek better terms with a new lender if possible.
- Maintain future payments
If an agreement is reached, staying on top of mortgage payments will help avoid the issue in the future.
If negotiations with your lender do not resolve the issue, you have a few other options to mitigate the emotional and financial damages.
Option 1: Selling on the Open Market
Selling your home on the open market before the lender forces a sale can prevent repossession once the transaction is finalised and the outstanding mortgage is cleared. This option allows you to maximise your property’s value by attracting buyers willing to pay a competitive price. However, the process can be slow and unpredictable, depending on market conditions, buyer demand, and the time required to complete legal and financial procedures. Delays could put you at risk of repossession if the sale isn’t completed quickly enough.
Option 2: Selling at Auction
Selling your property at auction is another potential way to halt repossession proceedings. Auctions often create a sense of urgency, attracting serious buyers and potentially leading to a faster sale. There are a few points to consider:
- Firstly, if your property fails to sell at auction, you may be liable to pay an auction fee.
- Secondly, you must pay the 2-5% auction house commission, often with VAT payable. The equity of your property could be reduced after these fees are paid.
Option 3: A Cash Sale
Selling your property to a cash buyer offers a fast and hassle-free alternative to traditional sales and auctions. This method eliminates lengthy mortgage approvals and potential buyer withdrawals, ensuring a quick and reliable transaction—often completed within days. Cash sales typically come with no estate agent or auction fees, allowing you to retain more of your property’s value. If you’re facing house repossession, a cash sale can provide immediate financial relief, helping to clear outstanding mortgage debt and avoid foreclosure’s legal and credit implications.
While house repossession is a challenging experience, exploring your options can help you regain control of your financial future.
How can I Accurately Assess the Value of my Property Before Selling it?
Accurately assessing the value of your property before selling is crucial to attracting potential buyers and securing the most equity for your property.
Research and checking local market trends will be a good place to start. Review recent sales in your local area to get an idea of the price point for properties similar to yours. Consider key factors such as size, condition, location, and any upgrades you have made to the property.
Remember that recent renovations, energy-efficient upgrades, or unique amenities, such as smart home features, can increase value.
A second option is to hire a professional appraiser who would provide a more accurate valuation and a report that would be helpful for negotiation purposes. Although this comes at a cost, there are cost-effective options available.
Lastly, our experienced property experts at We Buy Any House use the latest property valuation technology to accurately assess your home and tailor a competitive cash offer. We recognise that selling a property—especially in challenging situations like house repossession—is a significant decision. That’s why our offer remains valid for seven days, giving you the time and flexibility to explore all your options confidently.
Conclusion
Whether through negotiation, alternative financing, or selling your property, taking proactive steps can significantly ease the burden. By understanding your rights and available solutions, you can make informed decisions protecting your home and financial well-being.
We’ve put together this guide to help people dealing with the prospect of repossession. At We Buy Any House, we help hundreds of customers each month and want to share valuable information to help others in a similar situation. Have a look at our reviews. We think they speak for themselves.