How Many Months Mortgage Arrears Before Repossession?

Missed a mortgage payment? First things first, there’s no need to panic just yet. And, you’re not alone—in fact it’s one of the biggest questions people have when they fall behind. So if you’re here because you’re wondering how many months of mortgage arrears before repossession, let’s cut through the confusion and equip you with the facts.

What are mortgage arrears?

Being confident of the facts starts with the basics. Mortgage arrears simply means you’ve missed one or more payments on your mortgage. But missing one payment doesn’t mean you’re going to lose your home in an instant. 

The kind of arrears that lenders are concerned about build up over time. But even if that sounds like your situation, it’s far from game over if you take action before things spiral out of control.

What is repossession?

Repossession is when your mortgage lender takes back your home because you’ve fallen too far behind on your payments. It’s the final step lenders take to recover the money that they loaned to you. 

Repossession happence once other solutions — for instance repayment plans or a change of terms — have failed. The lender would then apply to a court for permission to take possession of the home and sell it to settle what you owe them. If any proceeds remain, they would pass these on to you.

How long before repossession?

Here’s the reality: Repossession isn’t something that happens overnight. Typically, lenders won’t even think about repossession until you’ve missed three to six months of payments. But that doesn’t mean you won’t hear from them, because—and this is really important—lenders are legally required to try and work with you before they go down that road.

So, if you’ve missed a few payments, don’t pack your bags, but equally don’t ignore it. The earlier you engage with your lender, the better. You’ve got options, and repossession is the last resort for any lender. What they really want is for you to catch up on your mortgage arrears.

What should you do if you’re falling behind?

Here’s your first step: get in touch with your lender, and do it early. 

Lenders are far more likely to help if they can see that you’re being proactive. There are a few options, like extending the mortgage term, temporarily reducing payments, even switching to an interest-only mortgage for a short period to give you some breathing room.

It’s also worth speaking to organisations like StepChange or Citizens Advice. They’ll help you understand your situation and work out a plan that suits you.

Is repossession inevitable?

The short answer is: No, not if you take action. Even if you’re several months deep in mortgage arrears, you can often avoid repossession. 

Lenders are required to explore alternatives, so the key is keeping the lines of communication open and showing that you’re willing to tackle the issue. The truth is, lenders don’t relish the chance to repossess a property as it’s a costly and drawn out process, so coming up with a solution is a win-win.

Act quickly, stay on top of things, and you might be able to stop repossession in its tracks. The earlier you act, the more options you’ll have.

What is the process from arrears to repossession?

There are five distinct steps in the process, so there are plenty of opportunities to turn things around and avoid repossession. Here’s how things unfold:

1. Notification of arrears

Your lender has to notify you that your mortgage account is in arrears. At this point they’ll encourage you to get in touch, or to make up the shortfall as soon as possible. 

While most people in arrears will already be aware of having fallen behind, some people may have missed a payment due to a banking glitch or simply forgotten, so this notification gives people a grace period where they can put things right if they’re able.

2. Agreeing on a solution

You and your lender work together to try to get things back on track. This might involve setting up a repayment plan, extending your mortgage term, or switching to interest-only payments for a while.

Proactive, open communication at this stage can make all the difference, so even though you may feel like you want to hide from your lender, be honest and responsive so you can arrive at a solution that suits you and them.

3. Legal action

If the solutions you’ve agreed on in step 2 don’t play out or you continue to fall behind, this is the point at which the lender may choose to begin legal proceedings to eventually repossess your property. 

However, as this involves applying to court, it’s not a done-and-dusted thing yet. If you find yourself here, talk to your lender again about any avenues you’ve not yet explored, or wider solutions like selling your home.

4. Court proceedings

During the legal process you’ll be given the opportunity to give your side of things and defend yourself. The court may side with you if you can demonstrate that you’re willing and able to pay the arrears, but if not, the court may grant a possession order to the lender, meaning they then own the property.

5. Eviction and sale

Once a repossession order is granted, you’ll need to leave the property so that the lender can sell it to recover the outstanding mortgage debt. Any remaining funds will then be returned to you.

Help is at hand

Lenders want to help you stay in your home, so reach out to them as soon as you start falling behind. The sooner you act, the more likely you are to avoid losing your home.

And if you’ve explored your options and a fast house sale feels like the best way forward, SellHouseFast.co.uk can help. We buy any house for cash with our simple, fast, free process, helping you to avoid further stress and move forward with confidence. Get a free, no-obligation quote today and explore how you can take control again in a matter of days.