According to a recent report released today, Citizens Advice have warned that around 1 million mortgage holders could be facing repossession because they have no way of paying off the capital left on their interest-only mortgages when the term ends.
For some of those people, time is already running out and they will either be faced with having to find the capital to pay off the remaining debt, sell their homes or face repossession!
The charity has said that some people who went to a consumer champion event were not even made aware that they would need to repay the capital at the end of their mortgage term.
There are currently around 3.3 million mortgage holders in the UK who have interest only products. According to a recent poll by YouGov it estimates that;
- 1.7 million have no linked repayment vehicle, such as an endowment or ISA
- 934,000 have no plan for repayment
- 432,727 have not even thought about how they will repay the capital
Since 2012, lending rules were tightened to ensure that interest-only mortgages were no longer available without a payment plan; however people that already held these mortgages would have had the same level of support.
Citizens Advice has expressed concerns that interest-only mortgage holders do not have the same protections when their term ends than when mortgage holders fall into arrears.
New rulings launched three years ago, gives lenders a legal obligation to consider alternative options before starting possession action, including extending the length of a mortgage, changing the type of mortgage and giving people reasonable time to sell their property if necessary. However these protections to not apply to interest-only mortgages at the end of the term!
Even if your mortgage lender has started court proceedings against you, it is not too late to sell your house quickly and avoid long-term consequences. A guaranteed sale to a cash buyer will normally enable you to stop the repossession court action.
If you’re concerned about your financial situation, are struggling to make your mortgage repayments or are already in mortgage arrears, selling your house quickly to a professional homebuyer like Quick Move Now could resolve the situation before it has a long-term impact on your financial record. Choosing to sell your house before you get repossessed gives you the opportunity to re-take control of the situation and prevent any long-term impact on your life; giving you the opportunity to start again with a clean slate.
If you’d like find out how Quick Move Now could assist in your individual circumstances, call their friendly, professional team FREE now on: 0800 068 3366 FREE or fill in the free, no-obligation estimate form to see how much you could get for your property.