Falling interest rates are making new mortgages increasingly attractive and that’s enticing more and more borrowers to remortgage their homes. Many people are finding that remortgaging offers a far better rate than the one which was on offer with their current mortgage’s standard variable rate. No-matter what the reasoning, it is clear that mortgage lenders are continuing to slash rates in an effort to entice new homeowners and those seeking to remortgage and that means there are a host of affordable deals on the market. Sadly though, some may not be in a position to take advantage of these great rates.

It’s understandable that a homeowner might want to free up a bit of extra cash from the equity tied up in their house. Even without all of those pressing expenses, having that cash available to cover any unforeseen circumstances makes life a lot less stressful when they do crop up. However, putting your hands on a large cash sum to cover emergencies and other sudden costs can prove to be extremely difficult, especially if your credit rating has suffered due to bad debts and missed payments. If you’ve been subject to even more serious debt problems and had to resort to severe debt solutions, like a bankruptcy or CCJ, it can be even more difficult to secure credit from a conventional lender. Your first thought should be to discuss your financial circumstances with a trusted, experienced debt advisor. Harrington Brooks are one of the longest standing financial institutions in the UK and an help you deal with your unsecured debts if you find it a struggle making payments to them.
The specialist debt advisors at Harrington Brooks will be able to give you expert advice on your debt problems.

The clear piece of advice to arise from these findings is to maintain an open line of communication with your lender. 46% of the people who contacted their lender promptly, before they actually found themselves in financial difficulty, managed to arrange terms to suit their financial circumstances and repay their debt in full. Compare this to the 19% that that made a successful repayment after leaving it a few weeks to contact their lender. Making prompt contact with your lender shows a willingness to tackle your debt, an approach that will reflect on you favourably when discussing repayment terms.

By far the most common reason cited for a lapse in mortgage repayments was loss of source of income. The current financial climate has resulted in a rise in the unemployment figures and lenders know this. So, the 43% of people for whom this was the case generally found that their lender was sympathetic to their predicament as long as they were kept abreast of the situation. Indeed, 60% of borrowers in arrears thought that their lender had treated them fairly and been helpful throughout the process. This is opposed to one in five that thought their lender had been unjust or treated them unfairly.

Of all those people that found themselves falling behind with their mortgage repayments, just under half of them sought out independent dept advice. This figure was reflected in the statistics of those that successfully repaid their mortgage arrears in full. Obviously, there is always the risk that failure to meet mortgage repayments could result in repossession of your home. The importance of consulting a professional debt adviser cannot be underestimated. The right adviser will help you to understand your different options and advise you on the right way to go. The quicker you do this, the better.

The researchers found that more than 30 per cent of these people were unsure whether they have proof of their income when they apply for a remortgage with a new lender.

Most borrowers will find it difficult to remortgage this year. The days of easy borrowing may be something of the past and very few lenders are prepared to offer deals to people whom they consider high-risk. These borrowers may have to accept whatever their present lender can offer them when their existing deal ends.

There has been an all-around tightening of lending criteria in the UK mortgage market. This is due to the global credit crunch that has had financial markets in a crisis during these last several months.

Some 30 per cent of respondents have borrowed more than 80 per cent of their home’s value. This is a big cause for concern. Another 15 per cent of respondents have borrowed more than 90 per cent of the home’s value, meaning that these borrowers would be very vulnerable to negative equity should house prices fall even more. Negative equity refers to an asset’s value that is less than the outstanding balance on the loan.

The Department for Communities and Local Government (CLG), Royal Institution of Chartered Surveyors and the Financial Times did research that all point to one thing: house price growth has been slowing down. Mr Richard Brown believes that “these figures shouldn’t be interpreted as scaremongering”.

A small percentage of respondents admitted they might miss mortgage payments during the coming year. A bigger portion – 22 per cent – are prepared to use credit if it means they will be able to meet the mortgage payments.

The credit crunch does not bode well for mortgage products, 10,000 of which have been withdrawn. Last summer’s offerings included 15,000 products, but the study revealed that there are now only 5,000.

In recent weeks there has been a withdrawal of nearly 500 fixed and variable-rate mortgages, which means that consumers now have far less choice since the start of the turmoil in the money markets.

Borrowing criteria are being tightened and borrowers are raising their rates. These conditions mean that many households would be unable to remortgage. This will create problems for those households due to come off their fixed-rate deals during the next year. This might force them to stay on with their previous lender, and possibly at a higher rate.

The Newbury, Melton Mowbray and Tipton, all small building societies, mentioned they will only deal with local people.

Sellers who refuse to lower their prices may be to blame for unsold houses that are still on the market. Last month saw an increase in the average house price. However, Rightmove, a property website, confirms buyers were waiting for an average drop of 10 per cent in the asking price. Their commercial director, Mr. Miles Shipside, noted that sellers who enter the market might be ignoring other unsold properties as strong competition, and that they are oblivious to the challenges homebuyers now face.