If your house is repossessed do you get any money back (Or lose it all)

What are the chances of getting any money back after your house is repossessed?

If your house is repossessed do you get any money back - Or lose it all

If you’re pondering the question ‘if your house is repossessed do you get any money back‘. Or perhaps you’re worried that you may lose it all. You may want to read on. Also be aware that your debt problems don’t necessarily end after your house has been repossessed.

But whether you’ll get any money back after your house has been repossessed depends on how much equity you have in your home at the time this happens.


For each loan or mortgage secured on your home, if you’re in arrears on any one of them, each lender has the same rights to apply to the UK courts to repossess your home. In the event your home is repossessed, the proceeds from the sale of your house will first be used to repay each of these secured loans. Depending on how much of your mortgage is unpaid, any money left over after repaying these lenders, and after paying for any legal fees, repossession costs and court fees will be paid to you.


House repossession process and how it works

How the house repossession process works is important to understand. As this will help you to see why you may not necessarily get any money back after your house has been repossessed. This can be true whether you have equity in your house or not.

Of course if you are already in negative equity, you don’t stand to get any money from your property after it has been repossessed.

More Reading: What is negative equity?

Your home is not yours if you have a mortgage secured on it

Many people who own homes in the UK who have mortgages don’t appreciate how their homes are actually owned by the mortgage company. When you signed a mortgage contract, the mortgage lender has a right over your house.

This right extends to the fact that if you fail to make your mortgage payments, they can repossess your home. Even just one missed payment will put you into arrears with your mortgage lender.

More Reading: How many months mortgage arrears before repossession?

The wording recommended by FCA documents reads “YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.” In other words, this is a warning to make you aware that you must keep paying your mortgage.

It’s not always easy to get out of your mortgage once you’ve signed the contract and drawn the money.

More Reading: How can I legally get out of my mortgage?

Missing mortgage payments creates a ticking repossession clock

Missing mortgage payments creates a ticking repossession clock

For each mortgage payment that you miss, the closer you get to being repossessed. If you don’t act quickly and respond to your mortgage lender when they write to you, the repossession clock simply speeds up.

There is a process that all mortgage lenders have to follow. They must follow this procedure before they are able to repossess your home.

Part of this process involves them applying to the court for a repossession order. If you are unable to offer a solution to the court. Or if you offer a solution, but the judge dismisses your offer, judgement will be made to the lender for repossession.

It is then only a matter of time before you will be ordered to leave your home.

What happens after your house has been repossessed

After your house has been repossessed, the mortgage lender will review the numbers.

  • The lender will assess how much the property has netted when it is sold.
  • They will total the amount left outstanding on the mortgage. This amount will include any arrears and penalties.
  • The mortgage company will add up all the legal costs for applying to the court and add-in all their legal fees.
  • The balance, if any will be repaid to you.
  • If the net of the above means that you owe money to the mortgage company, they are entitled to come after you for this money.
  • They can if they choose make you bankrupt in the process. Which may mean that you could lose any other assets you own.

More Reading: If my house is repossessed can I get another mortgage?

If your house is repossessed do you get any money back

If your house is repossessed do you get any money back
If your house is repossessed do you get any money back

Getting back to the original question of if your house is repossessed do you get any money back, let’s take a look now at why you may not get money back. Even where you thought you had equity in your house.

Your lender will sell your repossessed house at under market value

The number one reason why you will not get any money back after your house has been repossessed is because your mortgage lender will sell your house at well under market value.

Lenders are not in the property business. All they want is to get their money back and as fast as they can. This means that they will sell your house quickly. A quick sale means a lower than market valuation. Normally, repossessed houses sell for at least 25% below market value.

For example, if your house is worth on the open market say £235,000. But let’s say your mortgage outstanding is 176,000, including any arrears. This leaves you with equity of £58,750.

Let’s now assume your mortgage lender sells your house quickly for 25% under value. This would mean it sells for 176,250.

But then there are selling fees, and let’s assume these amount to £2,500.

The net proceeds the mortgage company will receive from selling your house will be £173,750. Which is less than what you owed on the mortgage by £2,250.

This is before the other added costs, which are discussed below.

More Reading: How can I stop my house being repossessed? (12 Options To Stop it)

Court fees and legal costs for the repossession process

Your mortgage lender will need to spend money both on legal fees and court fees to repossess your home. These are not cheap and would likely amount to in excess of £1,000.

This means that the negative amount noted above of £2,250 will be increased by these court costs and legal fees.

The conclusion is that even where you have a reasonable amount of equity in your house, you are unlikely to get any money back. But also, as already mentioned, if your house is in negative equity, or if there’s very little equity in it, you don’t stand a chance of getting any of your money back.

But there is a solution to this problem, and it will help more than you might realise.

Seek help from a property solutions expert

Within reason, no matter how far down the repossession track you are (obviously this will not count if your house has already been repossessed), there is a solution at hand.

If you can avoid being repossessed and stop the repossession from happening, you’ll not only prevent being humiliated when you’re evicted. But also, your credit rating in the future will be less tarnished.

Your credit rating will have been affected, as this happens the minute you miss one or more mortgage payments. But if you stop the repossession from happening, you won’t have a repossession on your credit rating.

To find out more on how you can seek help on stopping your repossession, please contact us immediately. For example, in the example explained above, where the home owner had £58,750 of equity, there’s every possibility you’d get some of this equity out.

A bonus to this solution is you don’t need to involve and estate agent either. This saves on estate agent commission fees.

I hope you’ve got something from reading this article on “if your house is repossessed do you get any money back

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Also, if you have any questions, please feel free to comment below too. Alternatively, if you need more help, please feel free to contact us on our contact us page here. Or join the discussion and ask your question in the property forum.

If your house is repossessed do you get any money back (Or lose it all)

4 thoughts on “If your house is repossessed do you get any money back (Or lose it all)

  1. I have a joint mortgage with my ex partner who is non contactable. I want to sell the house as i cannot afford to keep it on. The house is worth £260k and I have a mortgage of £97k
    I have tried many times to find him over 6 years. He has not paid any money towards the mortgage and the deposit for the purchase of the house was mine.
    Please help

    1. Hello Nikki – an interesting and difficult situation you have there. If your partner is on the title deeds, i.e. rather than simply on the mortgage, it’s not easy to have them removed without their permission. If you were in contact and your partner was not in agreement to sell, you could apply to the court for a decision. The courts have the power to force a sale. However, in your case when you are not able to find the co-owner, I’m not sure how this works and the only advice I can suggest is you speak with a solicitor on the matter and ask for their guidance. Please come back and let me know how you get on, as I’d like to know how and if you are able to resolve this problem.

  2. Thank you for your response. Yes he is on the deed unfortunately.
    I managed to track him down a while ago and he agreed to remove himself and allow me to sell. He even spoke to my estate agent and said he was happy to let the house go on the market. I have a sold board outside the house and buyer’s ready to move in but he had disappeared again and it looks like the sale will fall through.
    I will keep you posted once I have sought legal advice.

    1. Hello Nikki – how frustrating!! Just a thought, have you thought about instructing a private investigator to track him down, as they have ways to find people. Not sure of the cost of something like this, but it’s a matter of weighing up the cost of finding him vs not. But a conversation with your solicitor would be a good starting point to see what can be done, as it doesn’t seem right that you are stuck with a property in this way. If the court were to agree to force a sale, his share of the proceeds could be held in escrow (or a solicitors account) until such time as he is tracked down to agree to allow you to have the funds if that’s what should happen. I am sure that if things were different and the property were being repossessed as an example, I doubt whether this would stop the repossession from taking place, nor a forced sale agreed upon by the courts to repay the mortgage etc.

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