Repossesion Threat

Repossession orders rose by a massive 16% during the first three months of the year - and as homeowners come off fixed-rate mortgage deals, home repossession levels will rise this year how can you avoid losing your home?

The figures show that the number of mortgage possession claims instigated by the courts this year has risen by 5,000 in the three months of this year. The Credit Crunch has caused interest rates to rise and homeowners coming off their fixed rates are getting a payment shock and unable to find suitable remortgages.

It should be remembered that many actions which go to court do not end in repossession the court will in the first instance look at ways of keeping your in your home.

At the court hearing the judge may decide to postpone the hearing, cancel the repossession because a payment schedule to settle the arrears has been agreed between the lender and borrower, or delay the repossession to give the homeowner the chance to sell the house themselves.

But unfortunatly in some cases the repossession order is granted and a date set by which the property must be vacated. The Council of Mortgage Lenders released figures for the second half of last year. And actual repossessions rose to 27000.

The CML forecasts a repossession rate of 0.38% (45,000 repossessions) in 2008 which is higher than last year but still relatively low in relation to the 11.8 million outstanding mortgages in the UK and the rate of repossessions in the early 1990s.

The Government announced plans to help homeowners who are struggling to pay their mortgages.The plan is to boost debt counselling and provide free legal advice to help homeowners threatened with repossession.

With 1.4 million fixed-rate mortgages expiring this years and new mortgage rates soaring in price because of the credit crunch. The Government plan to provide a new debt advice service through the National Housing Advice Service.. It also talking to lenders and getting them to provide more information for struggling borrowers.

Time for action
If you're worried about repossession and the effects of the credit crunch, there are a number of things you can do to protect yourself.

First, take advice from the rest of our site and cut your spending take a look at our top ten tips to beat the credit crunch.

May be look at remortgaging before its to late and maybe consolidate some debts or remortgage and also consider a debt management plan for your unsecured debts. For more information see our debt management page.