Stop Repossession Today

Debt Matters

The subject of debt is seemingly always in the newspapers. In recent months we have heard of the troubles that have hit the non-conforming mortgage market across the Atlantic – Or closer to home the financial problems that seem to blight the majority of football clubs in the country.

There are growing concerns of the levels of consumer debt that is prevalent across the United Kingdom – Amongst the highest in Europe. The culture of buy now and pay later seems to be growing stronger year on year.

There is no doubt that debt is a serious problem that affects many people from all walks of life throughout the United Kingdom. With imminent interest rate rises throughout the rest of the year, stark warnings have been issued as to the immediate impact to borrowers and indeed the future economy as a whole.

Despite recent dips, consumer debt continues to remain at high levels and serious concerns have risen up to do with the ability of borrowers to repay outstanding loans and Credit Cards.

Serious questions have been raised as to the way in which lenders assess a borrower’s eligibility to obtain credit. The new buzzword in relation to this is ‘Responsible Lending’ – A concept in which nearly every lender claims to adhere to. Although what does Responsible lending actually mean? It seems that this is just a smokescreen for a currently larger buzzword, ‘Affordability’.

It is recognised across the board that the level of debt was actually helping to reinvigorate the UK economy. The UK domestic product is driven consumer spending – If this slows down then the knock on effects will cause widespread problems across the economy as a whole.

It is clear that a certain amount of debt within the economy is good for business. However, despite slowed growth, the fact that individual debt is continuing to grow, consuming a larger amount of borrowers and leading to increased bankruptcies, insolvencies and property repossessions is a worrying sign that looks far from being just a temporary glitch.

The one thing that all parties are agreed on is that change is needed and change is imminent – Whether this is through better education or firmer regulatory controls of the credit and debt solutions industry.

Labels: debt, repossession

14-Apr-2009

Stop Repossession Today

Protection For Mortgage Payments

It is not only important for a borrower to protect the repayment of the outstanding capital balance on their mortgage in the event of death, it is also very important to protect the payments of both the interest and capital against a breadwinner’s loss of earnings.

The loss of an individual’s earned income may typically arise through accident, sickness or redundancy. Regardless of the underlying cause however, the effect can be devastating for the family as a whole which could ultimately lead to the property either being sold or repossessed.

Statistically, the absence of work due to both unemployment and redundancy are, alongside divorce and separation, the major causes of mortgage and loan missed payments and arrears and of course subsequent property repossessions.

There are two main types of protection policies which are designed to provide assistance to a borrower who has for example fallen ill or had an accident preventing them from working. Permanent health insurance (PHI) is commonly used to protect an individual against the inability to work due to accident or sickness and thus provide an income in times of such needs. It is perhaps more common for a borrower to take out ‘ASU’ cover – Accident, sickness or unemployment. An accident, sickness or unemployment policy is generally designed to provide cover over the shorter term.

It is possible to arrange ASU polices in a number of ways. By shopping around independently, by taking out cover provided by a mortgage or secured loan lender or by taking it out through a mortgage or loan broker. Today many accident, sickness and unemployment policies are often branded as Mortgage Payment Protection insurance. This type of insurance contract will usually cover the monthly mortgage payments in full and depending on the quality of the policy, may also provide an additional level of benefit of benefit to cover essential bills.

Although uncommon, it is also possible to arrange both Permanent Health Insurance and accident, sickness and unemployment cover in conjunction with one another. In this way, the deferred period of the PHI contract will usually be set at one or two years to coincide with the end of the payment on the ASU policy.

In recent times, the need for borrowers to protect themselves in this area has increased due to the governments reduction in the level of income support for mortgage interest payments which is a state benefit. There has subsequently been strong lobbying be many within the mortgage industry to make ASU policies compulsory. At the time of writing however this is not the case and most mortgage lenders will only insist on a borrower taking out a suitable Buildings insurance policy as standard.

Labels: remortgage, repossession

Did You Know?

In the majority of cases it is possible to stop repossession.
It is never too late!
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