Many homeowners could face repossession over the summer
July 13, 2009
Officials from the housing charity Shelter have recently expressed concerns that a high number of homeowners in the UK who are saddled with high risk sub-prime mortgage loans could be facing repossession action over the course of this summer.
The charity fears that many homeowners with damaged credit or no proof of income took out these sub-prime loans during the credit boom, and for many the special terms over which they took the mortgages may be set to come to an end over the summer, leaving them facing far higher interest rates and repayments on their mortgage loans.
It is estimated by the charity that thousand of homeowners in the UK could find themselves in this situation this summer, with their interest rates and repayment rocketing to unaffordable levels as their deals come to an end.
This will lead to many defaulting on their mortgage loans, as the recession rages on and the financial climate continues to cause issues, and ultimately this could result in a sharp rise in the level of repossessions, which is something that is already causing extreme concern throughout the industry.
A recent report suggested that at present over 160,000 homeowners that have sub-prime mortgages, which are geared towards those with credit problems in many cases, are already struggling with their mortgage repayments. In addition to this over a quarter of a million more homeowners in the UK are worried that they will be unable to cope with their mortgage repayments in the near future.
The figures have led officials from Shelter to urge the government to ensure that sub-prime homeowners are included in their mortgage rescue plan proposals, as many are going to be desperate for help in order to avoid losing their homes.
One shelter official said: “It’s vital the government includes the sub-prime sector in any financial help so those coming off fixed rates can access an affordable mortgage.”
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