I Have Property Debt, What Are My Options?
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Property Debt, What Are My Options? Property debt either in the form of negative equity or mortgage repayment arrears, is a UK-wide problem.While no region is immune, some have suffered more than others. The North England and Wales have been worst affected.
Property Debt Options
Statistics published in June 2016 showed that EACH DAY some 53 mortgage possession claims and 36 mortgage possession orders are made in the UK. In addition, there are 398 landlord possession claims and 309 landlord possession orders.
Eighteen properties are repossessed daily. That’s one every 79 minutes.
These are the figures published by the much-respected Money Charity (registered charity number 1106941),
Mortgage arrears is a self-explanatory term; repayments are not being made in full and/or on time, leading to ever-increasing property debt.
If it is a case of negative equity, here the victims problem is that they owe more on the property than its current marketplace value.
It is estimated that some 500,000 homes in the UK are in negative equity.
If you need rather than merely want – to sell your home, but are trapped in negative equity, almost certainly you are going to need help. The same is true if you are unable to maintain your mortgage repayments.
The reason you will probably need help in successfully navigating your way out of property debt, negative equity or, worst case scenario, both, is that there are complex legal issues and money matters involved and it requires a high level of expertise to untangle those.
Thankfully there are experts whose raison d’tre is to secure just such an outcome – a fair, affordable, legally binding and prospects-restoring way out for those with problems arising from mortgage arrears and/or negative equity. Did you know, for example, that there are specific mortgages for those in negative equity but needing to move house?
So take heart, because with the right people working on your behalf it may well be possible to re-mortgage to a better, more affordable format even if you are in property debt.
Many of those with interest-only mortgages are in trouble at the moment, for although in terms of mortgage repayments they have benefited from interest rates having remained so low for so long, the flip-side of that particular coin is that their savings and investments, which were to have paid off the capital sum borrowed, in turn have yielded only tiny gains.
There is little to suggest that this is likely to change in the foreseeable future, for in the wake of the Bank of England’s decision in to cut its base interest rate to an all-time low 0.25%, The Sunday Times reported: Savers face five more years of record-low returns, with investors betting that the Bank of England will not undo last weeks interest rate cut before the end of the decade. (August 7, 2016).
A re-negotiated longer term and more affordable rate may be an option here.
Alternatively, having an expert working on your behalf to reach a resolution with your lender could result in the property being sold, despite being in negative equity, freeing you to move on.
Or, depending on your particular circumstances and just as people are individuals, so too cases vary in the nature and extent of debt and the victims ability or inability to pay an Individual Voluntary Arrangement (IVA) might be the best option.
An IVA is an agreed programme to repay lenders. In return, the person owing money has in-built safeguards which offer protection. In addition, negotiated settlements can see vast amounts of debt 70%, 80% or even 90% – being written off by creditors.
It may even be that bankruptcy is by far the best course of action for some.
Negative Equity UK has just such experts to advise you, work on your behalf with lenders, safeguard you from harassment on the part of creditors and, ultimately, help you get your life back on track, so ending years of stress and misery.