Talk to lenders to sort out mortgage repayment problems, borrowers have been advised.
Mortgage customers struggling to meet their monthly repayments during the current economic downturn should speak to their lender immediately to negotiate an alternative payment plan, it has been suggested. According to the Homeowners Advice Centre, this could help Britons avoid the risk of repossession.
"If payments are getting difficult to keep to, I would recommend talking to your lender sooner rather than later about swapping to interest only payments as most lenders will refuse to do this if you are in arrears," said spokesperson Al Elliot.
His comments come after Gordon Brown promised to curb the rise in home repossessions, insisting such action must be an absolute last resort for lenders. New guidance has been published which sets out ways in which lenders can deal with mortgage arrears to balance their own needs with those of their customers.
Mr Elliot also advised mortgage customers coming to the end of a fixed rate deal to start budgeting for higher repayments, as tighter credit conditions mean they may be forced to switch to a standard variable rate loan, which is likely to have higher rates of interest.
The Council of Mortgage Lenders revealed recently that the number of mortgages approved by lenders has fallen by 56 percent in the last 12 months. It also predicted that 45,000 properties would be repossessed this year.
