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Archive for House repossession

Repossessions expected to double

Wednesday, April 9th, 2008

The number of families losing their homes due to repossession is set to soar from 30,000 last year to around 60,000. It will mean that the number of house repossessions will double, prompting the worst property crisis in over ten years according to mortgage lenders.

The Council of Mortgage Lenders had said that it expects repossession figures to hit at least 45,000 in 2008, but analysis by the Liberal Democrats reckons that the figure will be more like 60,000. The Lib Dems studied homes which were spending 75% of their disposable income on home loan repayments and say that there were twice as many homes on the list than last year.

The CML now believes that the property market is on the verge of the most serous crisis since Labour came to power a decade ago. The warning was sounded on the same day that the Bank of England published figures showing that the housing market was going into rapid decline.

Borrowers have been hit by a double whammy in the past 12 months and this has left many people in serious financial difficulty. On the one hand five Bank of England interest rate rises in the past year sent mortgage repayments cost soaring by as much as £200 a month extra. Subsequent rate drops have not eased the burden. On top of this the global credit crunch means that many borrowers can no longer get access to additional credit since banks are now tightening up on their lending criteria and finding it hard to borrow the money themselves in order to lend it on.

In the mean time, cost of living has risen sharply, with increases in food prices and fuel costs, but little increase in wages. Consumers burdened with personal loans and credit cards, taken out in healthier financial times are now finding themselves squeezed hard.

Posted in Bad Credit, Borrowing, Consumer Credit, Consumer debt, Credit Card, Debt management, Financial news, Financial products, Homeowners, House repossession, Housing news, interest rates, Missed payments, mortgages, Personal debt, Personal loans, Property, Remortgaging, Secured loans, UK Finance | No Comments »

Darling lashes out at mortgage lenders

Tuesday, April 1st, 2008

The Chancellor has lashed out at mortgage lenders accusing them of fuelling unsustainable growth in the housing market.

His accusations came out in an interview with the Daily Mail. Mr Darling told banks and building societies that they must be more responsible in the future.

The hard line the chancellor took with lenders came on the same day that the International Monetary Fund released a report which stated that Britain’s economy was highly susceptible to a property crash.

Mr Darling told the Daily Mail that ‘unsustainable house price is not good for individuals, is not good for the economy, so I think it will slow down.’ A slowdown is desirable and likely according to the chancellor.

This was the first interview the chancellor had given since he announced his Pre-Budget Report and he left little doubt about his displeasure and irritation with mortgage lenders. The chancellor has demanded that in the future lenders ask more questions in order to ascertain whether or not a borrower will be overstretching themselves.

The types of loans that encourage borrower to overstretch might be Abbey’s change of rules which meant that home loans of between five and seven times borrower’s salary were allowed.

Other examples singled out as irresponsible lending included a Northern Rocks mortgage which allowed borrowers to take out more than 125% of the value of a home (this loan has since been discontinued).

The Financial Services Authority has also found that one in six borrower’s are taking out interest-only mortgages made popular because of their cheap monthly repayments.

Posted in Bad Credit, Borrowing, Consumer Credit, Consumer debt, Debt management, Financial news, Financial products, Homeowners, House buying, House repossession, Housing news, interest rates, mortgages, Property, Remortgaging, Secured loans, UK Finance | No Comments »

Understanding The Fine Print

Thursday, January 10th, 2008

Before signing any contract or deal you are always told to read the fine print, and this is for a good reason.  Most of the important information that is almost always overlooked is mentioned in the fine print of the document.  Often this may include default terms or the eligibility of a good interest rate offer on a cheap loan or credit card.  It is estimated that as much as six million consumers fail to read the small print of their contract or transaction.

A recent study reveals that more than fifty percent of adults admitted to not reading the small print when buying financial products, mobile phones or electrical goods.  This is disturbing as often the lack of understanding of the fine print in your contract can lead to major problems or, in extreme cases, financial ruin.  Once a repayment contract on a credit deal – such as a mortgage or personal loan – has been breached, penalties and charges can snowball, putting the consumer at risk of losing their home.

One of the most important contracts where fine print must be completely understood is the credit card agreement.  All credit card companies are in the business to make a profit off their customers and with the Office of Fair Trading cracking down on unfair charges, credit card companies must then find other ways of making a profit.  Some of these ways include cash withdrawal fees, foreign usage charges; higher interest rates if the cardholder defaults as well as shorter interest-free periods.  It is important that consumers first read over the fine print of the credit card agreements before activating an account.  Often credit card holders fail to read over their agreements properly and overlook items such as handling fees for balance transfers or the high interest rates that are charged on cash withdrawals, and in some cases credit card providers are allowed to reprice a contract should the cardholder default on payments, which means they can then start charging a higher interest rate.

Posted in Bad Credit, Bank charges, Banking, Borrowing, Consumer Credit, Consumer debt, Credit Card, Credit record, Debt management, Financial products, Homeowner Loans, Homeowners, House repossession, interest rates, Missed payments, mortgages, Overdrafts, Personal debt, Personal loans, Secured loans, Spending, Store cards, Tenant loans, UK Finance, Unsecured loans | No Comments »

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