# Using Bridging Finance to Avoid Repossession Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2022-02-24 Category: FINANCE Category URL: https://financedigest.com/category/finance Meta Title: Avoid Repossession with Affordable Bridging Finance Meta Description: Explore how bridging finance can help struggling homeowners avoid repossession by paying off outstanding mortgage balances and selling their homes at a better URL: https://financedigest.com/using-bridging-finance-to-avoid-repossessionhtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/istock-833135834-1736816147156-compressed.jpg) Tempted by some of the lowest interest rates ever seen, first-time buyers have been on something of a spending spree over the past few years.  Unfortunately, evidence would also suggest that a growing number of home buyers are now running into financial difficulties. Repossession rates are nowhere near as high as in previous years but are rising. Faced with the prospect of repossession, struggling homeowners can find themselves with nowhere to turn. Major [banks and lenders typically are not always interested with borrowers struggling with existing debts](https://www.financedigest.com/christmas-debt-hangovers-how-banks-can-help-customers.html "CHRISTMAS DEBT HANGOVERS: HOW BANKS CAN HELP CUSTOMERS"), which in some instances can make the whole situation void. **An Alternative Option to Repossession** Defaulting on a mortgage means [facing one of two equally challenging](https://www.financedigest.com/overcoming-challenges-faced-by-women-in-business.html "Overcoming challenges faced by women in business") eventualities: 1. Quickly finding the money [needed to pay off your mortgage](https://www.financedigest.com/4-things-you-need-to-know-about-mortgages.html "4 Things you Need to Know About Mortgages") balance 2. Allowing the [bank to take ownership of your home and moving](https://www.financedigest.com/u-s-to-move-3-5-billion-in-afghan-central-bank-assets-to-swiss-based-trust.html "U.S. to move .5 billion in Afghan central bank assets to Swiss-based trust") out With the latter of the two options representing the worst possible outcome, all efforts should be made to repay the outstanding mortgage balance to avoid outright loss. This is precisely where affordable [bridging finance](https://www.financedigest.com/is-it-risky-to-use-bridging-finance-for-my-business.html "Is it risky to use bridging finance for my business?") can help to prevent repossession i.e.: - A couple has an outstanding [mortgage balance of £100,000 on their £200,000 home](https://www.financedigest.com/australias-property-downturn-puts-home-buyers-in-double-mortgage-bind.html "Australia’s property downturn puts home buyers in double mortgage bind") - They [run into financial](https://www.financedigest.com/running-a-small-finance-business-detrimental-to-physical-health.html "Running a small finance business ‘detrimental to physical health’") difficulties and default on their mortgage - The [bank demands full payment of the outstanding balance to avoid](https://www.financedigest.com/how-banks-can-avoid-regulatory-reporting-mistakes-with-a-good-dose-of-automation.html "HOW BANKS CAN AVOID REGULATORY REPORTING MISTAKES WITH A GOOD DOSE OF AUTOMATION") repossession - The couple [apply for a bridging loan](https://www.financedigest.com/home-equity-made-simple-things-to-know-before-applying-for-loans.html "Home Equity Made Simple – Things to Know Before Applying for Loans") of £100,000 to repay their bank the monies owed - The [funds are quickly secured](https://www.financedigest.com/hungary-pledges-legal-changes-to-secure-eu-recovery-funding-govt.html "Hungary pledges legal changes to secure EU recovery funding – govt") against their home to repay the bank, and the couple sell their home for its full £200,000 value - The [funds from the sale are used to repay the bridging loan](https://www.financedigest.com/the-professionals-at-real-estate-funding-solutions-helping-you-find-success-with-commercial-real-estate-loans.html "The Professionals At Real Estate Funding Solutions Helping You Find Success With Commercial Real Estate Loans") and the couple keep the rest of the money for themselves The above scenario is a far preferable option to repossession for two [important reasons:](https://www.financedigest.com/despite-the-headwinds-investors-have-important-reasons-to-be-cheerful.html "DESPITE THE HEADWINDS, INVESTORS HAVE IMPORTANT REASONS TO BE CHEERFUL") Firstly, when a [bank repossesses a property and sells](https://www.financedigest.com/russia-bans-western-investors-from-selling-banking-key-energy-stakes.html "Russia bans Western investors from selling banking, key energy stakes") to recoup the monies owed, they do not always receive the best price. Secondly, repossession proceedings can be extremely expensive, and all [costs are picked](https://www.financedigest.com/amazon-offers-shoppers-10-to-pick-up-purchases-as-it-targets-delivery-costs.html "Amazon offers shoppers to pick up purchases as it targets delivery costs") up by the debtors. Repossession often sees those concerned [coming out with nothing](https://www.financedigest.com/doing-nothing-is-not-an-option-when-it-comes-to-the-customer-experience.html "Doing nothing is not an option when it comes to the customer experience").  Debt repayment with bridging [finance can be a far more cost-effective option](https://www.financedigest.com/7-finance-career-options-to-consider-and-what-you-need-to-know-about-each.html "7 Finance Career Options to Consider and What You Need to Know About Each") **Always Act Early** The moment you encounter (or even anticipate) difficulties with your mortgage repayment obligations, it is essential to act. The longer you leave it, the more [costly and complex it could become to reach an amicable resolution](https://www.financedigest.com/ccp-recovery-and-resolution-the-good-the-bad-and-the-costly.html "CCP Recovery and Resolution: The good the bad and the costly"). By [consulting with an independent](https://www.financedigest.com/independent-consulting-study-reveals-that-content-supply-chain-challenges-obstruct-customer-continuity.html "Independent Consulting Study Reveals That Content Supply Chain Challenges Obstruct Customer Continuity") broker at the earliest possible stage, you will gain invaluable insights into the available options and which best-suits your requirements. In addition, you should always [consult with your lender upon encountering financial](https://www.financedigest.com/mazars-to-acquire-financial-modelling-consultancy-and-training-provider-corality-financial-group.html "Mazars to acquire financial modelling consultancy and training provider, Corality Financial Group") issues of any kind, as they may be able to help you through them. For more information or to discuss your requirements in more detail, contact a member of the team at [UK Bridging Loans](https://www.ukbridgingloans.uk/) anytime for an obligation-free consultation. **This is a Sponsored Feature.** --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---