More house repossessions are expected in 2020 as many people have lost their jobs due to the impact of COVID-19.
According to research conducted by a Personal finance website Just Money, about 34% of respondents say that their family earnings were significantly affected by the lockdown.
According to the law if you default for three months or more on your monthly home loan payments the bank may repossesses your house and sell it to recover the outstanding money owed.
In the past repossessed homes were sold without a reserve price meaning the banks could sell your house for much less than it was worth.
And you will still be liable for the outstanding debt.
This left customers with a potentially lifelong debt but now more stringent rules have been put in place to protect home owners.
Just Money Commercial Manager Sarah Nicholson says: “The government has put a lot of measures in place the bank cannot just take your home without notifying you , you need to try and prevent this.”
About 68% of the respondents say that their savings will only last them up to one month if they were to lose their jobs.
Consumers are urged to watch their spending and have at least months’ worth of emergency fund.
And if you can no longer afford to pay for your home there are options to consider to avoid repossession.
Sarah Nicholson says: “If you are in a situation where you are really battling you should consider debt counselling they will help you to consolidate your debt.”
Consumers are urged to inform their banks when they start experiencing financial difficulties instead of playing hide and sick.
And selling the house before it gets reprocessed could be a better option as it is likely to get a better price.
The measures can help to avoid the costs associated with repossessions.