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When everyone has a home

Housing advice for Northern Ireland

Understand your mortgage and other loans

If a loan has been secured on your home the lender can try to repossess the property if you don't pay the loan back. Properties can also be repossessed because of rates or ground rent arrears, but this is hardly ever seen in practice.

Mortgage debt

mortgage is a loan used to purchase a house. The mortgage lender can repossess a property and sell it if the borrower isn't paying back the loan according to the terms of the mortgage agreement.  There are different types of mortgages.  Your options if you fall behind can depend on whether you have an interest-only mortgage, a repayment mortgage or an endowment mortgage. 

Mortgage debt is always a priority. Falling behind with your payments could ultimately mean you lose your home.

Secured loans and second mortgages

Homeowners will often take out a second mortgage or a secured loan to finance home improvements or as a way of accessing a large amount of credit.  Like your original mortgage, this loan is secured on your home, so if you don't keep up with the payments, the lender can repossess your home. 

Any loan secured on your home should be treated as a priority. 

Unsecured loans

You may have other debts that are not secured on your home.  This could include bank overdrafts, credit card debts, hire-purchase agreements or loans on non-essential services. 

You have to repay these debts eventually, but you should focus on handling your priority debts first.  If you've got money left over, after you make payments to your priority creditors, you can use this to make your non-priority payments.

Negotiating with lenders

Ideally, mortgage arrears should be cleared as quickly as possible, but your lender should work with you to find a way of allowing you to pay off the money you owe without taking your home.  It helps to get advice from somewhere like Housing Rights.  Money and debt advisers can make sure that you can afford and stick to the repayment proposal you set up.  There's no point setting up an agreement that you know you can't afford.  Falling behind on your repayment plan can make your relationship with your lender more difficult.  

Remember, your home will only be repossessed if your lender has a legal reason for repossessing it and the correct procedure is followed. Repossession doesn't happen automatically and you may be able to stop it at any stage in the process.