Seek help over your mortgage repayments

April 1, 2011

It has been revealed recently that the level of defaults on mortgages has increased again in the first quarter of this year, even though the base rate still stands at just 0.5 percent, which is the lowest level in the history of the Bank of England, which spans over three centuries. Lenders said that the default level was unexpected given the low base rate and warned that if the base rate increases - which many expect it to - there could be a further increase in the level of defaults amongst homeowners that are no longer able to keep on top of their mortgage repayments.

Many people that have variable rate mortgages have become used to having the extra disposable income that has come from the base rate being so low for the past two years, which has resulted in their monthly repayments falling. However, many have started to rely on this spare income in other areas with some even taking on further debt and using this money to make repayments on their additional debts. This is why many have now fallen into difficulties with their budgets despite the fact that they are paying less than they were two years ago.

The level of inflation has soared to more than double the government’s target of 2 percent and many now believe that a rate increase is inevitable over the next few months in order to bring inflation back down. However, this will have a severe impact on homeowners who are already struggling, as it could result in their repayments soaring by hundreds of pounds a month in some cases, which some will not be able to manage given the soaring cost of living.

It is important for those that believe that a rate rise could tip them over the financial edge to seek help as early as possible by speaking to debt experts and charities. There are a number of steps that people could look at to prepare their finances for a possible interest rate increase. This includes:

 

  • - Consolidating their unsecured debts with one lower rate loan so that their monthly debt repayments come down, leaving them more money to cope with a rate increase
  • - Switching to a fixed rate mortgage now so that they are not affected when the rates increase
  • - Looking at options such as debt management plans if unsecured debts have got out of hand already
  • Tough times ahead for homeowners
    • Officials from a debt advisory company have stated that following bleak forecasts from the Council of Mortgage Lenders with regards to house price movement homeowners in the UK need to brace themselves for some very
  • Beat the interest rates when it comes to loans
    • When it comes to taking out a loan we all want to get the best deal possible, and this is something that can save us a lot of money on our monthly repayments as well
  • Challenging times ahead for homeowners
    • Homeowners in the UK are set to face some of their most challenging times over the course of this year according to officials from a debt advisory group. This comes after the Council of Mortgage
  • Even wealthier borrowers are now struggling to repay their loans
    • A recent report has claimed that suffering severe financial difficulty is no longer a problem that affects only low income consumers. The report shows that financial difficulties are now even hitting homeowners living in fairly
  • Higher mortgage costs for many homeowners
    • A recent report has shown that nearly one and a half million homeowners could be facing soaring mortgage repayments costs as a result of their cheap fixed rate mortgages coming to the end of their

Posted by Reno | Filed Under Articles, Homeowners 

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