how many months mortgage arrears before repossession?

February 26, 2024

71
Repossession processes due to mortgage arrears generally begin after three to six months of missed payments. However, this timeframe can vary based on the lender’s policies and the individual circumstances of the borrower. It’s important to note that lenders are required to follow a pre-action protocol, offering homeowners opportunities to address the arrears before proceeding with repossession.

Early Stages of Arrears:

  • Initial Missed Payments: Lenders will typically start the repossession process after several months of missed payments. However, this can vary depending on the lender’s policies and the borrower’s circumstances.
  • Communication from Lender: After the first missed payment, lenders will reach out to the borrower to assess the situation and attempt to resolve the issue without proceeding to repossession.

Legal Process and Timeline:

  • Pre-action Protocol: Before any legal action, lenders are required to follow a pre-action protocol, including discussing payment options and considering requests for payment delays.
  • Notice of Intended Possession: If arrears are not cleared or an agreement reached, the lender may issue a notice of intended possession. This is typically after 2-3 months of missed payments.
  • Court Proceedings: Lenders may start court proceedings to obtain a possession order. This process can take several months, giving borrowers additional time to find a solution.

Repossession Timeline:

  • General Guideline: It can take between 3 to 6 months of missed payments before a lender initiates repossession proceedings. However, the actual timeline can extend beyond this, depending on the lender’s actions and the borrower’s response.
  • Court Decision: Even after court proceedings are initiated, repossession is not immediate. A judge will review the case, and borrowers can still negotiate with their lender to halt the process.

Preventing Repossession:

  • Communication with Your Lender: Engaging with your lender at the first sign of financial trouble is crucial. Lenders may offer solutions such as payment holidays, term extensions, or interest-only payments temporarily.
  • Financial Advice: Seeking advice from a mortgage adviser or debt counsellor can provide strategies to manage your situation effectively.

Conclusion:

While there’s no fixed number of months before repossession occurs, the process generally begins after 3 to 6 months of missed payments. It’s vital for homeowners to act early, communicating with lenders and seeking advice to avoid the repossession of their home.

Answered by:

Alison Gibson

Ascot Mortgage Expert

Last Updated:

18.03.2024

Answered by:

Alison Gibson

Ascot Mortgage Expert

Last Updated:

18.03.2024

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