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The Government’s Income Support for Mortgage Interest payments begins this week for those who find themselves in arrears thank to losing their job.

The ISMI scheme will now mean those who have significantly lost earnings can claim benefits after 13 weeks, not 39. The Government is also doubling the size of home loan covered by the scheme to £400,000.

Robert Sinclair, director of the Association of Mortgage Intermediaries, says: "Government action to support homeowners in financial difficulties who may face the prospect of repossession is to be welcomed. This will provide support to a small but important group of people who are vulnerable following job losses, in the current economic climate.”

Anyone who thinks they may have trouble meeting mortgage repayments should either contact the lender direct or the mortgage intermediary they used to arrange the deal. But your mortgage broker is also essential in not only helping you understand your overall options, but also to help you understand any benefits you may be entitled to.

Sinclair adds: "2009 is likely to be a tough year for consumers, homeowners in particular. It is right the Government does all it can to support them. AMI will continue to work with Government to ensure the best possible outcome for homeowners."

To Keep up with news and comments on the current adverse credit market please visit the Adverse Mortgage Blog.

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If you have debt problems, 2009 has to be the time that you begin to make changes in your life.

Many Brits are looking over a precipice – the Council of Mortgage Lenders reckons 75,000 people will lose their homes this year. These 75,000 will find that their debts will get the better of them. They will spend and spend and fall further into the red. Credit card bills will rise, mortgage repayments will become harder and harder to meet. Finally, after months of struggling they will lose their homes and all their years of hard work on the property ladder will be ruined.

This isn’t doom mongering; unfortunately this is fact. But it doesn’t have to be fact for everyone. For every person that will lose their home this year, many more will find ways of making their finances work. They will find refinance, and they will be able to consolidate their debts. But the ones who do avoid repossession are those who work hard to avoid repossession.

Many of those 75,000 will lose their homes because they will keep their head in the sand. They will ignore their problems and they will continue to spend while things fall down around them. Don’t ignore your debt problems: embrace the situation and tackle them head on. Be on top of them, be honest about them and talk about them to a financial adviser, a debt adviser or even just a friend.

Thos people who work towards being debt free will have a lot better chance of not being one of the 75,000 in 2009. A proactive stance, a sensible plan and a will to improve will hopefully see debt disappear and hope for a brighter financial future.

To Keep up with news and comments on the current adverse credit market please visit the Adverse Mortgage Blog.

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More canny Brits are putting financial concerns ahead of Christmas spending this year with a cap on how much they spend.

New research by Halifax reveals that almost a third of us admitted we had agreed a spending cap with friends and family.

Results showed that the average cap was £33.26, with two-thirds of those agreeing a cap intending to spend £25 or less per person. And reassuringly, when asked if we stuck to an agreed spending cap, the vast majority of us said we did.

Mike Regnier, Halifax head of banking, says: "Our research shows people are setting a cap and sticking to it this Christmas. For many, a sensible spending cap is a great way to cut the cost of Christmas and still manage to buy presents for all our family and friends."

Cutting costs is crucial this holiday for those who are already struggling to meet their bills. It is not going to get any easier for people to get hold of a mortgage in 2009, but the ones with the best chance are those who are committed to reduce their spending, and take a serious look at their debts.

Those who spend too much this Christmas are going to have a tough time meeting January’s bills. That could mean more debts, more unsecured loans and more adverse credit for many people. With the Council of Mortgage Lenders predicting 500,000 people to be in arrears in 2009, you need to do all you can to get out of the debt cycle – and that starts with sensible Christmas spending.

To Keep up with news and comments on the current adverse credit market please visit the Adverse Mortgage Blog.

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The Council of Mortgage Lenders has predicted a grim 2009 for mortgage holders with a possible 500,000 homeowners in arrears by the end of the next year.

The CML has also predicted that net lending will fall to minus £25bn, as gross lending is cut to just £145bn - a drop of 40% on this year’s figures.

If three-month arrears rise to 500,000, that are 4.41% of all mortgages, compared with just 1.44% of mortgages now. The CML also says repossession cases will rise to 75,000 over the next 12 months - a hike of 30,000 on this year’s figure.

The CML says: “It is hard to imagine a more challenging environment in which to be making market forecasts. As the difficulties in the financial markets have begun to affect real economic activity, there have been seismic shifts in the macro-economic policies of governments and the perceived role of the state.”

This is grim reading indeed, but we all know that next year is going to be hard for many of us. That means you have to make sure you are as ready as you can be - doing all you can to reduce your debts, having the best deals possible and taking on board as much advice as you can will help you avoid being one of the unlucky many next year.

To Keep up with news and comments on the current adverse credit market please visit the Adverse Mortgage Blog.

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More than 4.5 million credit card customers still haven't cleared debts they ran up last Christmas, according to MoneyExpert.com.

The website calculates that someone carrying a balance of £1,000 from last Christmas will have spent around £169 in interest over the year if their rate was 16.9%.

Sean Gardner, chief executive of MoneyExpert.com, says: "Hopefully the realisation that another year has rolled round will encourage card users to re-structure their repayments and start clearing their debts. Certainly the options for consumers looking to switch large balances from one card to another are becoming more limited as requirements become stricter. What's more as deals expire the interest charged can be incredibly high."

If you are one of those who have been living with debt all year, it’s time to get off the credit card habit. Next year is going to be tough for everyone, but for those in debt it is going to be even tougher. If you haven’t got the money for a big Christmas, it’s time to economise and begin thinking about how to get by in 2009.

Assess your finances, talk to an adviser and think carefully before you spend this holiday season. Adding debt onto an already unmanageable total will only lead to further pains and could put your home at risk.

To Keep up with news and comments on the current adverse credit market please visit the Adverse Mortgage Blog.

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Credit card companies have agreed with Government a new set of 'fair principles' that will put an end to overnight hikes in credit card charges.

The Government says this will give much-needed breathing space to borrowers struggling to repay their debts.

Consumer Affairs Minister Gareth Thomas says: "I am pleased by the commitments card companies have made.

"I recognise that these changes will not be without financial pain for credit card companies, but it was vital that we nipped in the bud the bad practices that were causing real hardship for borrowers. These commitments will help families manage their finances and cope with repaying their debts"

The Government’s investigation found that some borrowers were having their interest rate significantly increased - sometimes by 10% or more, and at short notice. Now, customers will be given the option of closing their account and paying off their debts at the existing rate of interest.

Also, credit card companies have agreed to give people at least 30 days notice of an increase in their rate and to limit how often they will they increase it. This will make sure people have time to shop around for a better deal and plan ahead for changes to their family budgets.

The Government has also made sure that the industry agree that they will not increase rates for customers who've failed to make their minimum payments for two months or more, or if the borrower has sought help from a debt advice agency.

To Keep up with news and comments on the current adverse credit market please visit the Adverse Mortgage Blog.

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Consumers qualifying for the government’s two-year mortgage holiday will run up massive debt, leaving them financially worse off, according to a new report published by a group of mortgage experts.

The report by Exact mortgage specialists raises the question of how customers unable to pay now, will pay off debts on their mortgage as house prices continue to slide. It says as the value of property continues to fall, they will be left with less equity in their home and more debt to pay off.

The Government’s proposed scheme will allow those who are not earning to have their interest repayments guaranteed. But this will not be a write-off - the offset payments will have to be paid off once the borrower begins earning again.

Alan Cleary, managing director of Exact says: “This is PR hype. It’s a political manoeuvre designed to boost polls – it completely fails to take account of the current market situation. House prices are falling – delaying payment of mortgage interest for up to two years runs up more debt against a property, which is simultaneously losing capital value.

“According to standard lending agreements, if a borrower cannot afford to continue repayments, the lender should repossess the property as a last resort – to minimise the financial losses for the borrower. If lenders are forced to delay the inevitable, families hit hardest by the credit crunch will be left without a home – and they’ll be in a far worse financial position than they would be if they sold up now and cut their losses.”

To Keep up with news and comments on the current adverse credit market please visit the Adverse Mortgage Blog.

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Abbey has found that 21% of shoppers plan to put all the Christmas shopping on their credit card this year.

It has also found that 20% of people will be dipping into their savings to make sure they can afford all they want this holiday.

If you are one of these people that can’t afford Christmas spending, don’t get caught in the unsecured trap. And don’t spend money you desperately need to get through the next year.

If you keep spending on the plastic, it will come back to haunt you tenfold as bills start piling up - bills you do not have the ability to pay. There is no doubt about it, 2009 is going to be a tough year financially. So get the best start possible and begin to sort out your debts, not make them worse.

If you are in arrears, the best thing to do is make up a plan of action. Don’t cut Christmas out altogether; just get your priorities in order. It might be hard, especially with kids, but it is essential you get out of the credit spiral and take hold of your money problems, even during the Christmas season.

Those that can cut their credit bills instead of increase them in December are those who are the right path – and if you can do it at this time of the year, January will be a whole lot easier.

To Keep up with news and comments on the current adverse credit market please visit the Adverse Mortgage Blog.

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However bad the UK mortgage market is, its not as bad as over the pond it seems - it has been revealed that arrears on US mortgages are three times as bad as over here.

The Mortgage Bankers' Association has found that almost 7% of mortgage loans were in arrears in the third quarter of 2008, while a further 2.97% were at some stage of the foreclosure process.

Only 1.44% of mortgages in the UK are in arrears, according to the Council of Mortgage Lenders.

The MBA estimates that about 2.2 million homes will go into repossession by the end of this year, while the CML predicts only 45,000 Brits to be repossessed in the same period.

The Americans are facing massive unemployment problems that dwarf our own, fuelling such a bleak mortgage market.

Jay Brinkmann, chief economist at the MBA says: "Job losses are adding to the problems that already exist in the housing fundamentals. Fundamental economic factors have become more important as labour markets have slumped in some states.”

These figures prove that things could be a lot worse in the UK. And one of the fundamental reasons we are more secure over here is that we can be sure that our mortgage advisers are strictly controlled and 100% regulated, unlike in the USA, which lacks national financial regulatory controls. So if you are in financial difficulty, talk to one of our fully regulated, wholly legal mortgage brokers today, who are legally obliged to get the best deal possible.

To Keep up with news and comments on the current adverse credit market please visit the Adverse Mortgage Blog.

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If you are struggling with debts, slipping into your overdraft is an unfortunate side affect – but one that could cost you dear.

Website moneysupermarket.com has found that while current account interest has fallen by 1.29% since February, overdraft rates have risen by an average of 1.11% - meaning you are being hit harder for going into the red.

Kevin Mountford, head of banking at moneysupermarket.com, says: "The average difference between the in-credit rate and the overdraft rate is now at an alarming 9.64%.

"It's fair enough that the average in-credit rate among the leading providers' main accounts has dropped by 1.29%, noting where we are with the base rate, but overdrafts should have fallen by a similar amount – but effectively banks and building societies are charging 2.4% more on overdrafts than they should.

The comparison website says there are £600 million of outstanding overdrafts in the UK, which means lenders will be making £14.4 million from people who fall into arrears.

The best way to avoid being stung by these charges is to plan, plan and plan again. Make sure you can cover your costs for the month at the start, not when things start getting tight at the end of the month.

To Keep up with news and comments on the current adverse credit market please visit the Adverse Mortgage Blog.