If your financial difficulties are temporary, your mortgage lender may allow you to make payments at less than the contractual amount for a temporary period. You should also consider claiming Support for Mortgage Interest to help increase your affordability. It you still don't feel able to pay your mortgage long term then you may consider the following options.
Selling your property on the open market
In order to achieve the best value for your home an open market sale of the property is the best way to achieve this. You should speak to an estate agent to get an indication of the likely value your house could achieve. If you are considering this you should advise your lender that you are going to sell the property and they may decide to pause any action while the property is marketed. If you are struggling for money you may be able to negotiate with the selling agent that costs of marketing can be paid once the house has been sold.
Some lenders are willing to assist you with the sale of the property. This is often referred to as a voluntary assisted sale. This may be preferable for the lender if you owe significant arrears as it will save them in legal costs in calling-up and repossessing and can also achieve a higher value than if the property is repossessed.
In some instances the lender can agree to accept an offer less than the outstanding mortgage and agree to not pursue you for any shortfall but you should obtain written confirmation from them at the time of accepting any offer that would be insufficient to clear the outstanding sum of the mortgage that they will do this.
You should think about your future housing options prior to agreeing a sale.
Take further advice from a housing adviser on your future housing options prior to following through with any of the options above. They can advise you on your rights for homeless and housing assistance.
Quick sale and rent back providers
You may see adverts or websites from private companies willing to buy your property quickly and rent it back to you. You should very carefully consider all of your other options prior to entering into these types of arrangements. We would almost always advise against against entering any such arrangement.
Very often the purchaser will pay you considerably less than the true market value of the property and you would become the tenant of a private landlord which offers you less security to remain in your home than you would under a Scottish secure tenancy with a social landlord.
Mortgage to Rent Scheme
This is a scheme run by the Scottish Government’s Home Owner Support Fund which can be accessed if your home is being repossessed or at risk of being sold by a trustee if you are subject to insolvency proceedings. In effect if you are eligible and the fund can find a willing registered social landlord to purchase your property you would get to remain in the property but become a tenant under a Scottish Secure Tenancy rather than an owner.
If you have low income you may then become eligible for support for housing costs through Universal Credit or Housing Benefit. Only a money adviser or solicitor can assess your eligibility for the scheme and make an application on your behalf.
You should arrange an appointment to discuss this with them and if you meet the criteria they will arrange to apply on your behalf to the Home Owners Support Fund. You should note that although you may meet all of the eligibility criteria it does not guarantee that you will be accepted for the scheme.
Mortgage to Shared Equity Scheme
The mortgage shared equity scheme is run by the Scottish Government’s Home Owners Support Fund which can be accessed if your home is being repossessed. In effect the Scottish Government buys a stake in your property, up to 30%, to allow you to reduce your secured borrowings against the property and allows you to remain the owner of the property.
A full outline of the scheme and its eligibility rules can be found here. Only a money adviser or solicitor can assess your eligibility for the scheme and make an application on your behalf. You should arrange an appointment to discuss this with them and if appropriate they will arrange to apply on your behalf to the Home Owners Support Fund.
Although you may meet the eligibility criteria it does not guarantee that you will be accepted for the scheme.