RSS FeedsMortgage uncertainty for thousands of homeowners
31/01/2008
According to the FSA (Financial Servives Authority), hundreds of thousands of homeowners are likely to stuggle to meet mortgage payments in 2008. The FSA warns that with a combination of the economic slow down and consumers loosing faith in borrowing this may result in problems with making ends meet with mortgage payments.
Many homeowners will fall into the category where their existing fixed rate mortgate deal will come to an end this year forcing them to tie into unattractive mortgages with higher payments and big penalties.
According to the Financial Services Authority, there are certain groups of homeowners who are at a higher risk of failing to meet mortgage payments.
- Those who have bought a property with no deposit, ie a 100% mortgage or even 125% mortgages in alot of cases.
- Usual mortgage terms are arranged on a twenty-five year basis. In order to reduce monthly payments many homeowers have opted for longer mortgage terms. This can be very risky especially if you havent managed to get onto the property ladder until later in lfe.
- As a result of storming house prices especially in some parts of the UK, lenders have been offering much more than the usual amount to mortgage lenders. Many lenders have offered well over and beyond the three and a half times your salary putting many homeowners at risk of not being able to keep up monthly payments with increasing interest rates.
The FSA predicts that over a million homeowners in 2008 will face higher repayments as a result of fixed rate deals ending. These homeowners will have to find that extra cash in order to keep up with repayments or be ask risk of loosing their home.