Effects Of Repossession

Will a repossession affect my credit rating?

A repossession does effect your credit rating in two different ways. Firstly, the repossession has a bad credit rating, and will give you a bad credit rating for a period up to six years. However, if a property is sold and the mortgage not cleared in full, then this has a further impact, in that you sold a property with negative equity, and that the lender could chase for the remaining debt thereafter for a much longer period of time.

If my home has been repossessed, do I legally have to continue to pay for it?

Once your home has been repossessed you are responsible under the contract that you originally signed to keep up the mortgage payment until the day it is sold. So, if it takes 6 months to actually sell your property, you would be a further 6 months, technically, in arrears, and your mortgage account will be debited that amount of money. And, you are liable to pay those fees, and, of course mortgage payments during that period of time.

How long do I have to continue to pay for the property after repossession?

You have to pay for a property after it has been repossessed until at such time it has been completed or a sale is completed to the new owners. That period is generally between two and eight months and can be longer, but not particulary shorter then that.

Is there any way I won't have to continue to pay for my property after repossession?

No, the lender always reserves the right to keep the mortgage conditions in place and that is you'll pay for the use of that property even though you have no use of it. You'll pay for the mortgage until such as point as it's been sold to a third party.

What happens if I can't afford to continue to pay for the property after repossession?

Typically, no one really pays for the mortgage while it's being repossessed, as you generally have to find payment for rent as you've gone somewhere else while the property is being sold. So although you're not paying for it, this will be added to your mortgage account and debited at the end once the property has been sold.