AToM Mortgage Blog

A recent report from housing charity Shelter has suggested that as many as one million households are using their credit cards to meet their monthly mortgage or rental payments. This figure represents 6% of homes in the UK, with the charity adding that the problem is growing amongst the middle classes. Without doubt, this is a worrying trend as not only will you be increasing your current debt, you’ll probably be paying interest payments on both your mortgage and your credit card! Shelter have called these figures a “shocking discovery” and warned that in some cases if people were to default on their credit card payments, their homes could be repossessed.
In addition to these striking revelations, Creditaction has reported that 9,300 new debt problems are reported to the Citizens Advice Bureaux and 1,000 people are seeking some formal debt rescheduling plan every day. Therefore, it is unsurprising that in the same report, it is highlighted that a property is being repossessed every 11.2 minutes throughout the UK.
My advice would be not to let the situation get so bad that there is no way back. In the current climate, mortgage arrears are frowned upon as the worst possible misdemeanour. Worse than CCJs, Defaults and other missed payments on credit. Make sure you review your circumstances and take action before it happens. Once mortgage arrears, CCJs or Defaults are registered, every financial institution (including insurance & mobile phone companies) will see these when making decisions on whether or not to lend to you. At the same time, it is likely that any online internet application will fail should you have one of these issues registered against you within the last 12 to 24 months, as nearly all lenders use credit scoring and these inevitably will have a detrimental affect to you score.
To continue the scare mongering, there are only three or so lenders left in the market who will assist clients with adverse credit. The best case scenario is rates around the mid 5%s for historic adverse. The worst case is rates starting from 9.90% with eight, yes eight years redemption penalties to pay if you want to leave them. Therefore, the moral of the story is a simple one. If the going is beginning to look tough, speak to AToM for assistance. Sooner, rather than later!

Labels: adverse, all types of mortgages, creditaction, mortgage arrears, mortgages

When I was approached to write these weekly columns, the brief was to be descriptive and update readers with news from the world of mortgages not on general release. Whilst I knew times were tough, I didn’t realise how little positive news there actually is (or isn’t) in our market! Believe me, I look for positives but the stark reality of the current situation (and that still looming) makes it difficult. The statistics released by ‘creditaction’ for March, show the reality:
o Average house prices have decreased by £95 every day during the last 12 months.
o A property is repossessed every 10 minutes.
o 2,915 people are made redundant daily.
o 1 person is declared bankrupt or insolvent every 4.5 minutes.
o 33,600 applications for credit have been turned down every day during the last six months.
According to research from Which? homeowners are really feeling the pinch with 62% of the working population fretful that they or their partner may lose their job. Some 43% joint income households are anxious they won’t be able to pay their mortgage.
Despite house prices stabilising the ‘experts’ predict 2010 before ‘some normality’ returns with matters likely to get worse before they get better. Recent news from RBS with the loss of another 9,000 jobs and BT suggesting a further 10,000, indicates that the knock-on market effect will be huge.
Moneyexpert.com estimates that 8% of all mortgages holders have missed one payment during the last six months. One in twelve borrowers! Additionally, they suggest that nearly a third of all adults would face financial disaster within two months if they lost their jobs. Half of those believe they would only last a month.
Simply put, if you miss a mortgage payment, finding a lender to offer you a new mortgage is tough. Miss two or three and its as good as mission impossible.
I have said this with regular monotony but there really is no better time to review your finances and plan ahead for the next two to three years. Ask yourself questions including - if I lose my job how will I pay my mortgage? How will I support my family? If you are stuck for answers, speak to AToM or visit our website for more information. Don’t leave it any longer. Let us help you plan a positive future.

Labels: all types of mortgages, creditaction, moneyexpert, mortgages, which?