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More people who have adverse mortgages and adverse debts are finding ways to avoid having their homes repossessed, giving them the chance to work towards getting back into the black.

According to the Council of Mortgage Lenders, lenders took 10,200 properties into possession in the last three months of 2009 – 13% lower than the previous three months, and 2% down on the last three months of 2008.

Although adverse borrowers are more likely to stay in their homes thanks to lenders showing more forbearance, 188,300 mortgage borrowers still ended the year with arrears equivalent to at least 2.5% of their whole mortgage – that roughly correlates to three months of non-payment, which is a serious problem.

Michael Coogan, director general of the CML says: "The fact that mortgage arrears and possessions did not rise as much as we feared in 2009 is testament to the effect of low interest rates, and a great deal of concerted effort by lenders, government and the advice sector to help borrowers to address financial difficulties when they occur.

"We are not out of the woods yet – 2010 will still be a challenging year for many borrowers, and some households will inevitably find their finances being squeezed if and when interest rates do eventually rise. But borrowers should feel reassured that the vast majority of people who get into arrears manage to keep their homes."

But Brian Murphy, head of lending at the Mortgage Advice Bureau warns that if rates were to rise materially then there could be an increase in arrears and repossessions in the future. He says: "It's essential that anyone who is beginning to struggle with their repayments gets in contact with their lender straight away in order to find a solution. The worst thing to do is stick your head in the sand."

SOURCE: CML, MAB, 11/02/10

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If you are looking to get onto the housing market while house prices are still relatively low, there are a number of things you must think about before picking out your dream first home.

The first thing to remember is that mortgage lenders are very fussy and will make sure to credit score you before offering you a loan. Basically, the lender assumes you are guilty of not being able to handle a large loan unless you can prove otherwise. So make sure, before you begin first-house hunting, your score is as good as it can be.

That means making sure you never go overdrawn unless you have agreed an overdraft facility. if you cannot handle your own finances a lender will suspect that you will not be able to handle a large, six-figure loan. Also, if you are renting don't miss any payments – if you cannot pay your rent why should a lender think you are able to pay a mortgage?

Once you are sure your is as good as it can be, get an ‘agreement in principle' from a lender before you start property hunting. Talk to a mortgage adviser how you can do this, but basically it will give you an idea as to how much you can borrow and in this market this is really important as lenders are requiring bigger deposits than before. So you will know exactly how much you can afford and what sort of property you can aim for.

There are numerous other things you can do to make sure you get onto the property ladder successfully – create a budget, get an independent survey of the property you choose, invest in some good savings products, get good legal advice – but the most important thing you can do is talk to a professional mortgage adviser.

Karen Barrett, chief executive of Unbiased.co.uk says:  "Over the last two years, consumers have watched on as the property market slowed down, lenders tightened their lending criteria and the amount needed for a house deposit soared.  As a result, many first-time buyers have been left worrying as to whether they'll ever have their feet firmly on the property ladder. Seeking advice from a qualified and whole of market mortgage adviser will provide you with the information and help you need."

SOURCE: Unbiased.co.uk, 08/02/10

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

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A high level of personal debt and the prospect of rising interest rates could drive more people into taking out risky, expensive debt management plans in 2010.

According to moneysupermarket.com, the free resources for debt management are becoming overwhelmed with more and more people asking for help with adverse debt. This is leading more people to pay for debt advice through a debt management firm.

Debt management isn't necessary a bad thing, but like all things where adverse mortgage debt is concerned, it might not be right for everyone. Moneysupermarket.com has warned that there are many potential pitfalls in the unregulated minefield of the debt management industry.

Tim Moss, head of loans and debt at moneysupermarket.com, says: “Being in debt and watching red letters fall through your letter box can be an extremely stressful experience, and many people find that hiring a debt management company to negotiate with their creditors for them can bring a real sense of relief.

“If you are going to use a debt management company you should only do so with your eyes wide open. Not being fully aware of all the charges involved could make a bad financial situation much much worse.”

There are lots of regulated alternatives you can turn to if you are having adverse mortgage and unsecured debt problems. One of them is your mortgage adviser – they can help you assess your finances and assess your options. It might be that a remortgage may solve some of your problems, or a secured consolidation of your debts may be the best bet – but you will only know if you ask them.

But if you cannot get finance, a good mortgage adviser can help you with your debt management, possibly by referring you to a good, honest debt management provider. You can be sure of them because a trusted mortgage adviser would only trust a good debt manager with his or her trusted clients.

SOURCE: Moneysupermarket.com, 04/02/10

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We may officially be out of recession but a new study of UK businesses and their employees suggests business owners and workers alike are stressed to the point of sickness worrying about their financial wellbeing.

If you are thinking about your financial problems all the time it might be time to seek out some help. No matter what the problem, struggling with your mortgage or other debts for example, a professional adviser can help you realise workable solutions and can help you get rid of the burdens on your shoulders.

Adverse debt stresses have got so bad that almost one in four businesses claim that they have taken a lasting toll on employee stress levels and have led to an inevitable rise in long term absence rates, according to Aviva.

Dr. Doug Wright, principal clinical consultant from Aviva UK Health says: "Psychological issues such as stress consistently rank top among the causes of long term absence according to claims data from our group risk team – ahead of musculoskeletal disorders and life threatening conditions such as cancer.

"Stress is extremely hard to tackle as people often mask the symptoms until it's too late. Individuals can be affected by all manner of problems from personal factors to pressure of work and external issues including economic woes."

Stress will not help you solve your financial problems. Only proactive decisions like talking to a financial professional will help you get through. If you are risking your job due to stress you need to find ways to alleviate that pressure and that means budget plans, debt restructuring or new financial products – and that's best done with the help of a professional.

SOURCE: Aviva, 01/02/10

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It seems that the cracks are beginning to show amongst families of borrowers who are unable to get hold of a mortgage – speak to an expert right away if you are worried that your finances are affecting your family life.

New research by the housing charity Shelter shows the huge impact the housing shortage is having on families across Britain, with 1.5 million adults saying they are unable to look after their elderly parents because they can't afford to live near them.

In turn, 1.5 million grandparents say they are missing out on helping take care of their grandchildren because their own children can't afford to live close by. The research also shows that one in ten parents believe their children want to live closer to them but are unable to due to soaring housing costs.

The survey also revealed that 22% of those under 34 year olds stated that they were still living at home, with 45% of these people blaming high housing costs. Over half of this group reported that developing and maintaining relationships was harder because of living at home with their parents.

Kay Boycott, director of policy and campaigns at Shelter, says: "We all know how valuable it can be to have your family close by, but these figures show the shocking impact that spiralling housing costs are having on families."

If you cannot get a mortgage or are unable to move house because you think that you are unable to get hold of a mortgage due to adverse debts then you need to speak to an adverse mortgage expert right away. While the market hasn't improved completely, there are more options for those with little equity in their home or outstanding debts.

Never let your finances get in the way of your family's happiness. If you and yours are suffering because of home loan problems, sort them out today.

SOURCE: Shelter, 01/02/10

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You may have worked hard over the last two years to keep managing your adverse mortgage – but is your mortgage putting you at risk?

Only 22% of UK consumers are certain they could meet an unexpected expense of just £1,500 according to TNS Personal Risk Assessment. I has found that many people are so geared up with debt that they barely have a penny to spare, even when they would need it most.

Although half of the UK respondents questioned by TNS would turn to their savings in an emergency, these savings frequently amount to very little. Almost a third would have to ask for help from their family, with women more likely to ask for help than men. Unsurprisingly, the younger the consumer, the more likely they are to borrow from family.

20% of UK respondents would turn straight to their credit cards to fund an emergency cost – almost double the number who would use plastic in most other countries surveyed. 

Waheed Aslam, Director of TNS Finance, says: “Although 55% of respondents indicated that they held savings, for many the amounts were not substantial. This could be attributed to a lack of understanding about the potential financial products available, or even a general lack of education on the benefits of saving over relying on credit for those rainy day emergencies.”

If your mortgage is preventing you from having the ability to raise modest funds in an emergency, something must be done. No one knows when they might need money fast, but having a mortgage that is holding them down financially is never safe. Talk to a mortgage expert about rearranging finances and taking on a new mortgage so as to give you some financial freedom should you need it.

SOURCE: TNS Finances, 28/01/10

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The Government has introduced new rules that will seek to further aid the millions of people struggling with adverse mortgage finances.

The Financial Services Authority has revealed that it is considering proposals that would see no additional charges are incurred by a mortgage borrower where a formal agreement between lender and borrower is in place. This is great news because for struggling mortgage borrowers, to have an additional £30 or £40 monthly arrears charge added to your mortgage balance, despite having agreed a repayment plan with your lender was merely compounding the problem for those doing their utmost to stave of the threat of repossession.

Things are still tough for many mortgage holders right now: the Council of Mortgage Lenders says that 194,600 mortgages in arrears by 2.5% or more of their outstanding balance. For these people all the good advice in the world wouldn't stop the blow of additional surprise payments.

Andrew Hagger of Moneynet.co.uk says: "This will be welcome news to thousands of genuine people who are battling to keep a roof over their heads. With unemployment running at a 13 year high of just under 2.5 million, there will be a lot of people struggling to meet their mortgage repayments due to circumstances beyond their control.

"It's hardly treating customers fairly to for lenders generate additional profits by charging arrears fees to people who are adhering to temporary reduced repayment plans."

Sue Edwards, head of consumer policy at Citizen's Advice says: "That the FSA compel lenders to consider all options before repossessing and the confirmation that arrears payments made by borrowers must be allocated to clearing missed monthly payments first, before they pay off charges.

"The strengthening of these existing rules will help protect vulnerable homeowners from avoidable homelessness and we hope to see them implemented as soon as possible."

SOURCE: CML, Sep 09, Moneynet, CAB, FSA, 26/01/10

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

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You may have spent much of 2009 happily remaining on your lender's standard variable rate – but is it time to move away from the low rate?

Because the Bank of England has kept rates at 0.5% since March 2009, SVRs have been as low as ever. As a result, people have felt pained to remortgage because they would not find a cheaper deal anywhere else.

But the Office of National Statistics recently revealed that inflation spiked in December by 1%, up from 1.9% to 2.9%. This has led many to predict that the Bank of England may be forced to increase rates sooner rather than later.

If the Bank does increase rates it will mean that your mortgage may rise by hundreds of pounds a month. A rate shock may mean that your finances suffer and your mortgage may fall into arrears if you are not ready to cope with the extra cost.

So it might be time to remortgage now before you experience a rate shock. Talk to a financial adviser about taking out a fixed rate loan that will not change for a few years. It might be pricier now, but it might make sense to jump before the low SVR ship sinks.

SOURCE: ONS, 19/01/10

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New research released by Shelter has found that people are being forced to delay having children because of the lack of affordable housing – if you are having to work your life round your finance problems you need to get some expert help, fast.

The research by the charity found that 18% of 18-44 year olds, equivalent to 2.4 million people nationwide, are actively putting off having children because of high housing costs. Many people can't afford to get onto the housing ladder and many more are struggling to stay on it.

Kay Boycott, director of policy and campaigns at Shelter, says: "These figures show just how pervasive the housing crisis is. Whilst it is responsible to ensure that you can afford to support a new baby, it is completely unacceptable that housing costs are changing important life decisions like starting a family in such a significant way. Housing affects so many areas of people's lives."

If you are having to make tough life choices because of adverse finance problems, you need to talk to a financial professional. They can help you assess your situation and find you financial products that work round your plans, not the other way round.

SOURCE: Shelter, 18/01/10

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As many as 100,000 families have been crippled with £82m of debts sold to them by unscrupulous loan sharks over the Christmas period – the UK's poorest families will spend 2010 crippled with bad debts.

According to Circle Anglia, a provider of affordable housing and shelter, an estimated £29m in illegal doorstep loans were taken out over the holiday season, making it the worst Christmas in a generation for this type of borrowing.

Its evidence shows that on average people borrowed nearly £300 from loan sharks to cover the cost of Christmas, but with exorbitant interest rates averaging a whopping 825% – some rates can reach as high as 1,500% – meaning they will pay back over £800 on average.

Worryingly, the report also found that illegal loan shark activity is on the up in the UK. Over the last three years the estimated use of loan sharks increased from 165,000 to over 200,000 households per annum ­ a 22% hike.

Andy Doylend, executive director of operations at Circle Anglia, says: "These figures demonstrate the scale of illegal
lending across the UK. We hope that by turning the spotlight on loan shark activity we can help more people to seek help and get sound financial advice."

Simply, never borrow from loan sharks – they are illegal and charge exorbitant interest rates. There are other ways you
can access fair and affordable credit, with the help of finance experts and debt managers. As the economy stabilises after the credit crunch more people can get hold of safe, secured debt.

A consumer taking out a £288 loan from an illegal money lender at 825% will end up paying back nearly three times this initial amount and as a result it will take over a year before most families manage to pay back their Christmas 2009 loan shark debts. Don't go with the sharks, stick with the professionals to help solve your adverse debt problems instead of exacerbating them.

SOURCE: Circle Anglia, 15/01/10

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