Can Repossession Rescue Finance Help Me?
Repossession rescue finance helps homeowners in crisis avoid losing their home, and usually consists of either:
- A full remortgage, or
- A second mortgage, or
- A bridging loan.
Each type of loan is used to repay arrears or other debts, bring the payments up to date, and release equity from your property.
Once you have had time to recover and restore your finances, you are usually advised to then look at refinancing the rescue finance later down the line, so that you can secure better lending terms.
If you are looking at repossession and your bank has refused to help, or you have been rejected for emergency finance elsewhere - do not worry, there are plenty of lenders out there who specialise in helping people recover from a financial crisis.
For personal support, advice and recommendations on the best rescue finance for you, give our team a call on 0330 304 3040 or drop us a message at firstname.lastname@example.org.
Assessing Your Finances To Avoid Repossession
The first step is to work out where you are - how much do you owe, and how far behind have you fallen? If you are over two months behind, and have received a court order for repossession of your home, there are still options to avoid this.
If you are one month behind, the situation is of course much less critical than if you are over six months late on mortgage payments - the less severe your default, the more lenders who will be able to help.
Should you be further behind, this demonstrates a higher risk. Revolution Brokers do work with specialist lenders who may be able to support your application, but usually:
- Fees will be higher.
- Interest rates will be less competitive.
- You will need higher equity - or lending will be restricted to a % of the value of your property.
This is why it is so important to act quickly to find the right solution before the problem escalates.
If you are unsure of the best way to avoid repossession or do not know whether repossession rescue finance is your best option, then contact the Revolution team on 0330 304 3040 and we will walk through the situation with you.
How Much Equity Do I Need in My Home to Avoid Repossession?
Most mortgage lenders who offer repossession rescue finance will need to see a reasonable level of equity in the property, because:
- That means that they can lend funds to pay off other debts.
- There is enough security in the property to protect them from risk.
The terms and borrowing you can get depends on how far behind you are with your arrears, and any other relevant factors on your credit file.
Homeowners with equity of around 50% or higher are a much lower risk than applicants looking for an 80% LTV or more.
If you have a previously clean credit record, you may be able to borrow up to 95% LTV - but this will be much lower if you have been struggling with credit issues for some time and have fallen into arrears with your mortgage.
You may hear about non-equity loans, which can lend you more than your property is worth - and up to 120% of your home's value.
However, this is a very specialist type of finance, is often extremely expensive, and should only ever be considered as a last resort and in the short-term to avoid getting into further financial difficulties.
It's common to have other debts as well as falling into arrears with your mortgage. For most people, mortgage payments are the last thing you wish to default on, and so you may have stopped paying other bills beforehand to be able to keep up with your mortgage for as long as possible.
Very often, applicants will need to borrow money to clear other debts, as well as to avoid repossession.
This will, of course, be reflected in your credit report, which will show any late payments, defaults or financial difficulties - and the more issues shown, the more difficult it is to secure new financing.
Most lenders will want to see evidence that they are lending responsibly, and that you will be able to keep up with the repayments once the other debts have been cleared.
Assessing the Reason for Financial Difficulties
The reason you have fallen behind in your mortgage payments can make a big difference.
In the current economic climate, many people are reliant on government support and furlough schemes, and with mass-redundancies predicted some lenders could offer payment holidays, more flexible finance, and emergency support.
Suppose you have experienced an emergency that has caused the financial strain. In that case, some mortgage providers may be able to help, and will not proceed with a repossession order if you have been proactive in contacting them to explain what has happened.
Where circumstances could not have been foreseen, or a significant life event has occurred which has impacted your income and caused you to default, the most important thing is to get in contact with your mortgage lender.
Examples include redundancy, illness and injury - in which case a lender might offer support until you have recovered or found a new job.
Should there be no extenuating circumstances and you have mismanaged your budget it is less likely that a mortgage lender will be able to offer much flexibility.