Top 10 Tips for Avoiding Home Repossession

In the US and UK, the number of home repossessions has been rising as people with large mortgages struggle to make the necessary payments. These are 10 tips to help avoid seeing your home repossessed. The important thing is to adopt a useful strategy as soon as possible. Don’t wait for things to get out of hand before acting.

1. Maintain emergency cash savings. Ideally, this would be sufficient for 6 months without work. To build up an emergency fund, make saving a priority and think carefully about spending
2. Talk to your Mortgage Lender, before problems emerge. They may be able to help offer a temporary respite.
   Consider an interest only mortgage. Although it is not a good solution in the long term, it will provide a temporary reduction in interest payments.
3. Earn More. Could you take a lodger in? A spare room could make a profitable way to easily earn more money. In some areas the income from a lodger can pay for 50% of your mortgage. This is an effective way to avoid repossession.
4. Take Independent Advice from Debt Advice bureau’s and Citizen’s Advice Bureau’s they may be able to offer practical steps to avert repossession.
5. Reduce all unnecessary outgoings. Look at each bill and think whether you could make savings or whether you need it at all. Look at ways to reduce cost of running a house
6. Use an Isa Saving account to make the most of interest savings
7. Take out Payment Protection Insurance PPI or Mortgage payment protection Insurance MPPI to cover repayments in the event of an emergency
8. Check to make sure you would actually be covered for a pay out. Sometimes payment protection insurance schemes may not payout for certain circumstances like the self employed.
9. Short term income protection will help you to cover all your bills.
10. Sell possessions. A bit drastic but perhaps there are some possessions that you don’t need very much.