What is the normal repossession process

desmonds

Hi,

Been a long lime since I last posted. Well, I went BR sept 2006 and was discharged 6mths after.

My reason for writing is that I am concerned as most people are coming off fixed rates how I will manage my increased mortgage payments.

I am with Northern Rock fixed at 5.19% until 1st April 2008 whenI will then go onto their SVR which is something like 7.69%.

I have a £365K mortgage so you can see why I am worried.

I am hoping that NR will offer me another deal that is less than their SVR because of the fact that I have never defaulted on the mortgage.

I am keen to know what would happen if I was unable to pay the full mortgage amount each month?

I am not talking about not paying anything but what say if I could only manage 75%, would they still go for repossession or do they only do that as a last resort?

What would be a last resort ?

I have read that the government has asked banks to be more understanding before taking the repossession route whilst we are in this credit crunch so one hopes that banks are going to do this.

Downsizing would mean reapplying for a mortgage with very limited lenders offering sub-prime mortgages and the ones still around too expensive and more than the SVR that I would end on with Northern Rock, so I would be better off staying with them.

Renting would be another option since I have at least £100K equity in the property.

What i really would prefer would be to ride the storm and what with the BOE bast rate on the way down then mortgages in the next year will become at least more affordable.

Does anyone reading this have dealings with Northern Rock and whether they are ruthless when it comes to missed payments.

I have found them to be quite helpful and the product that I have with them very flexible and have had a 6mth payment holidays whilst off work which has helped me tremendously.

What I need to know really are the stages the normally are taken if monthly mortgage payments get into arrears and how easy it is so negotiate a payment plan with the lender etc etc

kind regards

Desmonds

Vaux-Hall

desmonds wrote: »

Does anyone reading this have dealings with Northern Rock and whether they are ruthless when it comes to missed payments.

I don't, but I would say that how Northern Rock have behaved in the past may bear little relevance to now as their position is completely different. They may be more desparate to keep customers to keep money coming in (you've never missed a payment), or they may need to screw people for every penny they can. Hopefully the former!

pink_muppet

I think they would start possession proceedings if you get into arrears, even if you are still paying 75% of the mortgage each month as the interest on a mortgage of that size will rack up fast, the only way a court would suspend it would be if you could pay your full monthly payments and a bit towards the arrears (which they usually like paying off in 2 years)

I think you need to speak to NR fast about a new deal

dmg24

Are you sure that you have £100K equity in the property desmonds? A year ago you only had £10K? x

Tassotti

Talk to NR...Come to an arrangement...

Any Loan company will prefer to receive reduced payments than none at all.

It IS a hassle for a loan company to repossess your house, and they don't want that hassle.

Negotiate, make your maximum possible payments, but don't take the mickey, else they will take your home.

Tass

desmonds

dmg24 wrote: »

Are you sure that you have £100K equity in the property desmonds? A year ago you only had £10K? x

Remember it is nearly 18mths ago and bearing in mind there was an early repayment charge of £12K that would have reduced any equity at the time.

100K is a conservative estimate based on it's value after 1st April 2008 when the fixed rate ends and the early repayment penalty not applicable. The fact is that two recent properties have sold for £500K and £550K.

So, I went BR at the right time otherwise the potential equity now in the property would have been a beneficial interest and I would have had to sell.

Nice though that you still remeber me!!

mpsavuk

I don't understand the relevance between the amount of equity you estimated and the fixed rate mortgage ending???

Fergie73

So, I went BR at the right time otherwise the potential equity now in the property would have been a beneficial interest and I would have had to sell.

I would take some advice on this. Isn't there a rule with bankrutcy that you can be chased for something like 8 years, so if you sold and made a profit, creditors could still come after you for it?

desmonds

mpsavuk wrote: »

I don't understand the relevance between the amount of equity you estimated and the fixed rate mortgage ending???

Well, after 1st April 2008 then my fixed rate ends and the early payment charge which was £12K does not apply so any equity in the property is not eaten up by any penalty charges.

If I was to settle the mortgage a day early then I would still have £12K penalty to pay and if equity was £100K then I would only have £88K remaining having paid the penalty charge.

House price valuations go in quaters, the first quater(Q1) being March/April which would be the next increase, if any, an estate agent would value a property.

I am only guessing that by then that there may be approx £100K equity, it could be more or it could be less since a house is only worth what someone is prepared to pay for it.

The house that sold for £550K 6 mths ago is probably worth £575K now as house prices have gone up since then.

Remember, that a 1% increase per month on £550K is £5.5K whereas on a smaller property of say £100K then thats only £1K, so its easy to see how much a £500K property can shoot up in price in such a small space of time.

Anyway, my initial question was to do with repossesion process not the value of my property.

We seem to be getting off the point.

Sorry.

Desmonds

desmonds

Fergie73 wrote: »

I would take some advice on this. Isn't there a rule with bankrutcy that you can be chased for something like 8 years, so if you sold and made a profit, creditors could still come after you for it?

Hi,

It's something like 5 years but my wife bought back my beneficial interest that the Official Receiver (OR) had in the house which means that the house was satisfied and the OR has no longer any interest in the property, otherwise, yes, creditors could come back in the 4th year of BR even after discharge and any equity that had accrued would be taken into account.

Desmonds

clutton_2

legally a lender can ask for repossession if you are two full months payments in arrears. if you pay 75% it would be a good few months before you were two months in arrears - but that is not including the new added on interest,

do check your mortgage T&Cs to see how many "admin" fees you will also pay if you get into arrears - they often charge for arrears letters etc etc