Owning a home is a significant accomplishment but sometimes unforeseen circumstances create challenges which make it hard to keep up with everyday living expenses. When faced with financial difficulties, homeowners may find themselves unable to meet their loan repayment obligations.
While banks in Australia generally get a bad rap, in situations of financial distress, they generally try their best to work with their customers to find solutions to help them through tough times. However, when a saturation point is reached, where debts are not repaid and financial commitments cannot be met, action needs to be taken and often it means a mortgagee in possession sale.
Disclaimer:
This blog article is provided by Sell My Home Today as general information and not advice. We are sharing information based on our general experience and not based on the readers personal circumstances. For those who are needing to sell their property quickly due to financial hardship or unforeseen circumstances, please seek financial advice from your trusted accountant or financial advisor who are aware of your full financial situation.
What Is a Mortgagee in Possession Sale?
A mortgagee-in-possession sale occurs when a property owner, who is unable to meet their loan repayments, sells their property under the supervision of the mortgage lender. The mortgage lender, acting as the mortgagee in possession, takes control of the property and facilitates the sale to recover the outstanding loan balance.
Benefits of Mortgagee in Possession Sales
While a mortgagee in possession sale might not be an ideal scenario for borrowers with loans, there are always pros and cons which may include:
- Avoiding bankruptcy – bankruptcy can be a distressing experience for homeowners. It might be an option to get a fresh start but there are consequences. It could potentially affect future aspects of your everyday life as banks, insurers, employers, landlords etc., may see your bankruptcy status even after your 3 year bankruptcy period expiry and may ask more questions or require more information around why and how any risks are mitigated.
- Control over sale of property – While banks generally try to help, don’t forget that their position is to clear the debt owed to them by the property that is securing their debt. This could potentially mean a lower sale price which clears their debt but leaves less money in your pocket to spend or clear other debts that might have accrued during difficult times.
Learn more about consequences about bankruptcy: https://www.afsa.gov.au/i-cant-pay-my-debts/bankruptcy/consequences-bankruptcy
Selling to a Cash Home Buying Company
An option for homeowners facing a mortgagee in possession sale is to sell their property to a cash home buying company. A cash home buying company like Sell My Home Today specializes in purchasing homes quickly with cash offers providing a convenient alternative to traditional real estate transactions. Some advantages of selling to a cash home buying company include:
- Avoiding a Mortgagee in Possession Sale – By selling the property quickly, you can maintain good relationships with your finance provider taking the initiative to clear debts without the financier needing to take action.
- Speedy process – Cash home buying companies streamline the sale process, allowing homeowners to sell their property quickly. This is especially beneficial for those facing urgent financial challenges or time sensitive situations.
- No repairs or renovations needed – Cash home buyers purchase properties in their current condition. Homeowners are not required to invest time or money into repairs or renovations, making the process quick and convenient.
- Cash offers – Cash home buying companies offer homeowners a cash payment for their property. This can be advantageous for individuals who need immediate access to funds or wish to settle outstanding debts promptly.
- Confidentiality and privacy – Selling a property can sometimes be a private matter for homeowners. We respect your privacy and keep your personal information private and confidential within our business.
Unforeseen financial circumstances can place a significant burden to homeowners.
While a mortgagee-in-possession sale may be a good alternative to bankruptcy, selling a property to a cash home buying company can be an effective solution for individuals who are unable to meet their loan repayments. Companies like us at Sell My Home Today provide a streamlined and convenient process, allowing homeowners to sell their properties quickly and avoid the negative consequences associated with bankruptcy.
If you find yourself struggling to pay your loan repayments, a cash home buying company could be a viable option to consider.