Top 10 Tips to Avoid Repossession

If you're a single parent and struggling to pay your mortgage, it's essential to stay focused on what's most important.

Here are some suggestions which you can try doing if you are in danger of having your house repossessed:

1. Speak to your lender as soon as possible to explain your situation – you may be able to negotiate terms which will allow you to keep your home.
2. See if your lender will allow you to take a temporary payment holiday or add your arrears to your mortgage loan. This is known as capitalising your arrears. Perhaps pay off your arrears in instalments.
3. Your lender may agree to extend your mortgage term – this will allow you to make your payments over a longer period of time and will reduce your monthly repayments. But it will also increase the amount you have to repay in the long-run.
4. Rent out the property if you can and rent somewhere cheaper. However, there is likely to be a term in your mortgage agreement preventing you doing this unless you get permission from your lender; the mortgage rate may go up, and you will need landlords' insurace. Another option could be to rent out rooms in your home. A certain amount of income can be earnt this way tax free.
5. Sell the property to pay off the debt.
6. Change your type of mortgage – you might be able to switch to an interest-only mortgage. This may reduce your monthly repayments, but it may mean you never fully own the house, so you couldn't pass it on in your will.
7. Turn up to court – if your case goes to court make sure that you turn up. Even if you think that your situation is hopeless, you may still be able to save your home.
8. Don’t simply hand in the keys - This will not solve your financial problems: you will still be liable for the mortgage until your home has been sold, or any shortfall repaid.
9. See if you are entitled to any benefits which may help you, such as support for mortgage interest. Avoid borrowing more money if you can, as this may only make your problems worse.
10. Get legal advice – make sure that you seek advice well before you have to go to court. This will allow you to prepare for your case, and look at your finances in detail. 

You can get further information from the Shelter website and their National Helpline on 0808 800 4444.