According to the Council of Mortgage Lenders there were 125,100 households in arrears by the end of June 2007, and even the CML is reluctant to predict the number of repossessions likely by Christmas.
So what can you do if you get behind with your mortgage payments? Pray? Hang on in there and hope for a miracle?
Some homeowners have turned to a new idea known as sell and rent back. The idea is that you sell your property to a company that lets you stay on as a tenant so you dont lose your home.
But beware! Some of these companies take advantage of you when you are at your most vulnerable. Some people have practically given away their homes, just to avoid the humiliation of going to court. But its okay, because they are hoping to be able to stay in their home and pay rent, at least thats what they were told. A few months later they find the threat of eviction hanging over them yet again, when the company chooses to make them homeless once and for all.
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Shelter, the homeless charity, Citizens Advice and the Council of Mortgage Lenders are all sufficiently worried about some of these operations to have written to the government in October expressing their concerns.
So, if you are in arrears, seek advice immediately. The problem will probably get worse. Its tough to get back on track, but it can be done. Contact your lender, sort out an arrangement with them and stick to it.
You could put your house on the market. Most lenders and courts will allow you a certain amount of time to find a buyer, so that your arrears are paid off by the sale.
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You could look into remortgaging or taking out a secured loan. Think carefully about this option as it may not be affordable in the long run.
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If you are considering selling and renting back, make sure you go with an ethical scheme that has a Code of Practice protecting your tenancy and your equity. If you sell through Mortgage Rescue Scheme, your landlord is vetted and is not permitted to evict you, provided the rent is paid. You can buy your house back at todays market value or you can remain as a tenant for as long as you wish. Mortgage Rescue Scheme offers ongoing support, so you can make a fresh start financially. You even get an exit fee, if you chose to leave the scheme.
Selling and renting back should be your last option. So make sure its just your mortgage you lose, not your home as well.
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