Most people are surviving the credit crunch. They are continuing to pay their home mortgages, despite the rapid increase in cost of living and mortgage rates. This is overall good news. However, there are still hundreds of thousands of people that have or are in the process of losing their home. Of course, homeowners are desperate to hang on to their property, but believe it or not, most lenders are also in favor of you keeping your home. Repossession typically amounts to a lender loss as well. Here are some simple steps that anyone can take to help them hang on to their home in a crisis:

First of all, homeowners should be aware of their financial status. Recognise any lurking financial trouble. Having a good budget can help you foresee periods of temporary money difficulties like: a car lease running out, holidays, tax returns, etc.. Not planning for these temporary extra expenses can be the difference between a struggling homeowner, and a home being repossessed. Homeowners also need to prioritise their debts. Shelter, transport, and food should always be at the top of a budget.

Inform the mortgage lender of your financial situation, job loss, etc…immediately. If you have a legitimate reason for late or missing payments they will often be very understanding, and offer their full assistance. The lender will be much more likely to: offer a repayment holiday, put the missed payments on the back of the loan, spread the missed payments out over the course of the loan, or provide a period of interest only payments if you notify them immediately. Again, it is in their best interest for you to make good on your debt.

Always respond to letters, notices, phone calls, etc.. from the lender. In the case where the lender is unwilling to work with the homeowner, then the homeowner should attend the repossession hearing(s.)

Never grow your debt during periods of financial difficulties. Using credit cards to pay existing debts may prolong a repossession. However, in the long run, adding additional debt can actually negate viable ways to hang on to your home.

Don’t return the house keys to your lender. Your mortgage debts will still exist whether you return the keys to your home or not. Instead, even if you think that your home is a lost cause, get advice! There are several resources for independent and free advice like - the National Debt Line or the Consumer Credit Counseling Service. These services may have a solution to help the homeowner hang on to their home; or at the very least, they can provide impartial information on the different courses of action and the consequences for each.

Explore all of your options- state benefits, insurance policies, etc.. Think outside of the box. The goal is to pay the mortgage, but that doesn’t mean that the solution is always mortgage related.

These steps can help a struggling homeowner salvage their home from the grasp of repossession. The key is early intervention, and a willingness to face money problems logically and realistically.

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