Debt-hit homeowners urged to extend mortgage
Debt-hit homeowners urged to extend mortgage
Wednesday 16th July 2008
Ray Boulger of John Charcol issued the advice to homeowners after noting an increase in the number of its customers who are choosing to extend their mortgages.
The company said that this option has been taken up by between ten per cent and 15 per cent of its customers who have re-mortgaged their home in the last two months.
The trend is thought to be down to the prospect of higher mortgage repayments being charged by lenders as well as the soaring cost of living.
Senior technical expert at the firm Mr Boulger said: 'The key thing is that a homeowner who needs to remortgage must feel they can afford the higher payments.
"If they cannot, it is much better to either extend their mortgage or switch to an interest-only deal."
According to the Council of Mortgage Lenders, the impact of higher mortgage repayments will result in a surge in repossessions this year, with 45,000 people expected to lose their home.
Meanwhile, KPMG forecasts that by the end of 2008 the number of personal insolvencies will hit 130,000.
This is the equivalent of one person becoming bankrupt or entering into an Individual Voluntary Arrangement (IVA) every four minutes.
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