Protecting your home and possessions
One of the most critical debt repayments most of us will make during our lifetimes are our mortgage repayments. None of us really perceive our mortgage as a purely financial transaction but should see our home is an integral and central part of our overall family life. However for an increasing number of people, the ability to service this mortgage debt and juggle all the other family finances leads to financial crisis.
During Quarter 1 of 2007 the number of Court mortgage repossession orders was a record of nearly 22,000. More importantly the number of possession orders suspended by the Court - usually to provide the debtor with a period to catch up any mortgage payment shortfall – actually reduced. These statistics show that record levels of personal debt, higher utility and council tax costs combined with lower levels of wage inflation are all serving to force more and more people down both the mortgage possession and personal insolvency routes.
The current forecast for UK interest rates is upwards. A rise to 5.5% is expected in May 2007 – however some commentators are even forecasting a 0.5% rise to 5.75%. Although designed to combat inflationary pressure on the UK economy as a whole, the interest rate increases will serve to take even more disposable income out of the family finances by increasing the borrowing costs of both mortgages and personal credit. As more than 2 million consumers are already experiencing financial difficulty according to Citizens Advice, the impact of higher interest rates can only serve to put more people into personal insolvency situations.
We are increasingly asked to advise consumers on the prioritisation of personal debts in these situations and always advocate that mortgage, council tax and utility payments should continue to be met in full leaving unsecured loans and credit cards to be paid from any remaining surplus income. With interest rate increases on the way now is not the time to bury your head in the sand in the face of increasing credit commitments. Seek professional advice at the earliest opportunity and avoid your home becoming another needless financial statistic.
During Quarter 1 of 2007 the number of Court mortgage repossession orders was a record of nearly 22,000. More importantly the number of possession orders suspended by the Court - usually to provide the debtor with a period to catch up any mortgage payment shortfall – actually reduced. These statistics show that record levels of personal debt, higher utility and council tax costs combined with lower levels of wage inflation are all serving to force more and more people down both the mortgage possession and personal insolvency routes.
The current forecast for UK interest rates is upwards. A rise to 5.5% is expected in May 2007 – however some commentators are even forecasting a 0.5% rise to 5.75%. Although designed to combat inflationary pressure on the UK economy as a whole, the interest rate increases will serve to take even more disposable income out of the family finances by increasing the borrowing costs of both mortgages and personal credit. As more than 2 million consumers are already experiencing financial difficulty according to Citizens Advice, the impact of higher interest rates can only serve to put more people into personal insolvency situations.
We are increasingly asked to advise consumers on the prioritisation of personal debts in these situations and always advocate that mortgage, council tax and utility payments should continue to be met in full leaving unsecured loans and credit cards to be paid from any remaining surplus income. With interest rate increases on the way now is not the time to bury your head in the sand in the face of increasing credit commitments. Seek professional advice at the earliest opportunity and avoid your home becoming another needless financial statistic.
Labels: debt consolidation, home repossession, personal finance
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