The British public is currently struggling in almost every area to do with expenses and financial matters. Food, fuel and energy all costing much more compared to this time last year and the interest rates on many loans and mortgages have shot up in light of the credit crisis currently ravaging the country.
The inevitable outcome for many households with lower incomes is obviously not being able to afford to live in your home anymore; this is obviously a terrible situation and thankfully has not been a major problem up until now.
However it’s estimated that the number of home repossessions will rise to 70,000 next year as the mortgage market continues to go in to decline. The total of mortgage money being offered by lenders is set to be shrunk by over a half from £39 billion last year to £15 billion. So banks have clearly made it seem like not only will it be tough to pay your current mortgage but in the future there will be less money available, possibly to avoid a similar situation occur again!
The coming year will be tough for both mortgage lenders and the actual borrowers too as many banks this year ended up being bailed out by government loans and will take some time to recover their own finances before they can freely lend to the public again. With many analysts predicting that this process will take a long time it means that the number of people subject to problems with their mortgages will rise and hence repossessions.
The Council of Mortgage Lenders has also backed up these predictions with themselves predicting that lending will remain reserved for the foreseeable future bu8t this is mainly due to the current volatility of the lending market. There is no reason not to suggest that lending may resume as banks recover from the fallout of the credit crunch that happened towards the latter half of 2009.
Some mortgage lenders are now offering mortgage and remortgage products that remain at a fixed rate which may be best for those who don’t want to be subject to any unforeseen rises in the Bank of England’s base rate. Whilst many people have been on tracker mortgages in the past many are moving to a more stable fixed rate mortgage as they don’t think that if the base rate shot up again that they’d be able to cover the payments. The important point to remember with mortgages in this climate is to make sure that you cover these payments first, with a mortgage being tied into your home, like a secured loan, you stand to lose your home if you do not keep up payments and so make sure you cover them before any other repayments.
