It is commonly understood that if you fail to keep up with your mortgage payments your home is at risk of repossession. For more information about how to stop a property repossession please read this article. What is less well understood is that if you borrow funds via an unsecured loan you can face the same risk. Typical forms of unsecured lending are credit cards and personal loan agreements.
So how can an unsecured debt lead to the repossession of a property?
Lenders are not stupid. When they agree to provide some form of unsecured lending they will mainly base their decision on your income level. However, they will also carry out credit checks and find out if you own a property. This information will make it easier to approve your loan and may even influence the amount they are prepared to lend.
If you subsequently fail to make your loan repayments the lender may apply to the courts to obtain a county court judgment (CCJ). Once they have a CCJ they can then apply for what is known as a charging order. The charging order can be registered as a secured debt on your property. And hey presto that is how an unsecured loan turns into a secured loan.
In most cases the lender will not seek to force the sale of the property to recover this newly secured debt. This is because the debt, being an unsecured loan initially, is relatively small compared with mortgage debt. It is not cost efficient to repossess property for small sums of money. Interestingly, the lender can also charge interest on the outstanding loan amount. At the current prevailing interest rate of 8% this represents a healthy return. Conceivably this could even have a bearing on the lenders desire to repossess. However, if the lender decides to recover their debt they can apply for an “order for sale”. If the order for sale is granted they can repossess the property.
After Repossession of a Property
Be aware that once a property is repossessed your debts do not stop accruing. The lender will continue to charge interest until the property is sold. If the sale of the property is not sufficient to cover the outstanding debt you have what is called a “mortgage shortfall”. You remain responsible for any mortgage shortfall. The lender can pursue you for up to 12 years to recover the mortgage shortfall.
If you are in a situation that is beginning to resemble the above scenario then call us or simply enter your postcode and complete your details. We will contact you immediately to see if we can help. If we are not in a position to help we will do our best to advise you.
Life doesn’t always turn out in the way you’d expected and even the best laid plans can come undone. Where sudden, unexpected debt is concerned, it’s likely to affect all areas of your life, from lifestyle habits and food shopping, to more important factors such as your car and property. Here’s an insight into some of the ways you can deal with your property if you suddenly experience debt, along with the pros and cons of each.
After a long and protracted recession, it seems that if we have finally turned the corner. Many analysts now predict that 2016 will be an excellent year in terms of this financial recovery. However, this can actually present some very real problems for those who are looking for a quick London house sale. Whether due to outstanding debt or a relocation, the fact of the matter is that this can be a bit of a complicated process. Let’s take a look at a few steps to make sure that this move is performed efficiently.
Quick house sale companies do have a place in the market. Perhaps you have just learned that you owe a massive amount in back taxes. You may not be able to afford mandatory major works that will soon be carried out or you could simply wish to liquidate the estate of a recently departed family member. These are a few examples of when a quick house sale company is advantageous. What are some of the positive attributes of these firms and which policies should be avoided?
Some property owners will be happy to learn that the risks of a bursting housing bubble are seen by many analysts to be highly overstated. This could be great news for those who are casually looking to sell their home and are not in a rush for cash. However, this very same scenario (believe it or not) may very well represent a further burden upon the shoulders of those who need a quick London property sale. Although this may seem counter-intuitive, let’s look at why such an observation may turn out to be true.
There are many families and individuals that may be looking for a quick house sale in London. A professional property buying company will provide you with such a service and allow you to liquidate your property asset in a quick and efficient manner. Typically, they will offer to buy the property at between 70-80% of the true market value of the property in return for the service they provide. Unfortunately, all that glitters is certainly not gold in terms of quick house sale companies. Let’s take a look at some of the worst practices to avoid as well as a handful of tips to select the right agency.
Debt is a four-letter word which is difficult for most individuals to hear. However, it is also a part of life. One of the most startling recent figures highlights this immutable fact. The 35-44 age group throughout the United Kingdom holds the burden of property debt; a massive £266 billion pounds.
However, it is also a fact that other forms of debt are likewise just as rampant. Whether referring to unpaid mortgages, credit card mistakes or simply an individual that has been out of work for an extended period of time, lenders are hardly flexible. There are naturally times when one will desire to sell a home fast in London for these very same reasons. This can nonetheless be a daunting proposition.
The number of homes seized by lenders jumped by 48% in the first half of this year as borrowers, squeezed by the credit crunch and rising mortgage costs, defaulted at levels not seen since the early 1990s property crash. Reported on Guardian online.
With interest rates static at 5%, living costs and fuel prices rocketing increasing numbers of people are struggling to keep pace with mortgage payments, and other debts secured on property.
The Ministry of Justice said 28,658 house repossession orders were made by the courts in England and Wales in the second quarter of 2008. This was up 24% on the same period in 2007 and 4% higher than the first quarter of 2008. Records show that 1.5 million people have current mortgage deals which are about to expire.
Your credit record is used by lenders and credit providers to decide whether you are reliable enough to be given credit, and, as such, it is vital to have as good a credit history as possible. A good credit rating will mean that you will be able to borrow money, and at more favourable terms then those with patchy records.
With rising interest rates, more people are getting into mortgage arrears recently; while the number of repossessions is tipped to rise next year. Here are ten steps to help borrowers stop mortgage arrears from building up and risking repossession.
The number of companies offering quick house sales has increased recently, and there are now over 200 such companies in this sector, up from around 25 just a year ago. So why are people looking for a fast house sale?
How you deal with your debt problems depends a lot on both the size of the debt, and the extent to which the problem has been allowed to build up. For smaller debts, making a few cutbacks may be enough, but more serious debt problems require more drastic action.
Do the maths
To start to deal with the problem, you will first need to sit down and work out exactly how much you owe. Not facing up to the problem means that you will start getting County Court Judgements and worse. As a rule of thumb, if your debt repayments take up more than a fifth of your budget, then you are in the danger zone.
The sale of my property was well managed with regular communication and advice and support provided throughout the process. The company also provided legal support through one of their panel solicitors which was professional friendly and reassuring during what was a complex sale. They are trustworthy and reliable and I would recommend this company to anyone looking to sell their property. Thank you for making this a much easier process. R. Mangal, Leyton, London, E10