Repossessions ‘avoidable through talking to lenders’

Homeowners who are struggling to keep up with their mortgage repayments can avoid repossession by talking with their lenders, an expert has advised.

Communications manager at the Council of Mortgage Lenders Bernard Clarke said those who are in difficulty need to do this or contact a housing charity, such as Shelter.

He added: "We always urge any borrower who faces a payment problem to talk to their lender about it as their lender will try to help them devise a solution."

Mr Clarke suggested that the situation in terms of the cost of repayments may not be getting much harder for homeowners any time soon because it is unlikely interest rates will rise in the "forseeable future," with the eventual increases that do take place being gradual ones.

He concluded: "Lenders and borrowers should continue to benefit from what will remain low interest rates by historical standards."

Contacting mortgage providers may not be the only way homeowners can ease their difficulties, as a debt management plan may also provide more breathing space for those who owe money in other ways, such as on loans or credit cards.

This works by spreading the costs over a longer period of time, meaning a lower amount needs to be paid out each month – something that may help when it comes to meeting mortgage payments, not least if these have also been reduced by arrangement with the provider.

Editor at What Mortgage magazine Ben Wilkie noted last month that repossessions have been lower than might be expected in such an economic crisis, with lenders proving to be "very good" and helping householders find a way through their difficulties.

Posted by Paul Thacker