How can you get repossessed?

ukbondraider

In this climate of rising house prices, how the hell does someone get themselves in a position where they get repossessed.

Surely if you get into financial trouble you could sell your house at a lower price than the market to attract interest (which will no doubt still be more than what you paid for it) pay off the mortgage and then start again when you get back on your feet?

i.e if you paid £280K for a place 5 yrs ago and get into financial difficulty you could sell your house which now would be worth around £400K for at least £300K and repay the mortgage.

I really do not know how the hell someone can get repossessed in todays market. Do people simply rather wait for repossession to try and get the most for their house? Wouldnt you prefer to sell it cheaply and keep your credit profile in tact for future acquisitions.

Maybe I am missing something but it is so annoying if such repossesions are due to remortgaging to buy cars/holidays etc. If this is the case then such people deserve it.

thesaint

Simple reason is people get into financial trouble tend to bury their head in the sand, it can lead to depression, and by the time they realise it's too late, and welcome the bank repossession proceedings.

mystic_trev

ukbondraider wrote: »

In this climate of rising house prices, how the hell does someone get themselves in a position where they get repossessed.

Buy a couple of new cars, a few exotic hoildays,a Plasma screen TV and some other meaningless trinkets (all on MEW) and then face higher Interest rates!

TAG

Or of course there's illness or losing your job. How do you start again with those senarios then even if you have equity in your house?

A_Fool_&_His_Borrowed_Mon

They get repossessed as their home is in danger of repossession if they fail to keep up repayments on it.

If they bought the place on a shoe - string budget/ Mew'ed to the max & costs increase (eg Interest rates) then fail to keep up with the repayment, they then get repossessed.

silvercar

if someone is ill or loses their job they have no salary on which to get a mortgage. So in your example they could sell the house and have some equity in the bank, but this equity is not enough to buy a house outright and they have no way of getting another mortgage.

TAG

silvercar wrote: »

if someone is ill or loses their job they have no salary on which to get a mortgage. So in your example they could sell the house and have some equity in the bank, but this equity is not enough to buy a house outright and they have no way of getting another mortgage.[/QUOTE

Not sure whether that answer was directed at me or the OP? Just to clarify, your answer, is the point I was trying to make. Prehaps not to clearly though.:o

silvercar

I was agreeing with you!

Another reason people get repossessed is that they use their house as security for business loans. the business gets into difficulties and the lenders turn to the house to get their money back.

lynzpower

Maybe I am missing something but it is so annoying if such repossesions are due to remortgaging to buy cars/holidays etc. If this is the case then such people deserve it.

Why do you have SUCH a problem with people who YOU presume do this? Its almost all you go on about!

Col.Mastard

They lied about their Salary?

lynzpower

Col.Mastard wrote: »

They lied about their Salary?

er dont you have to produce payslips and bank statemetns whne you apply for mortgages these days??