It was a widely expected interest rate increase, but that doesn't make it any easier on the monthly finances for the millions of homeowners with mortgages. A 0.25% rise doesn't sound much, but when taken in the context of other recent rate rises, it all adds up to a fair amount out of the monthly budget - and many homeowners are set to feel the pinch.
This is the highest interests rates have been since 2001 - unchartered territory for homeowners who've purchased their first home in the last 6 years or so. With rising utility costs, council tax bills and insurance - being a homeowner is becoming an expensive business.
Keeping a roof over your head is seen by many as the number 1 priority - and this has always meant paying the mortgage in full on time every month. Now however, people are being caught in a trap where they are having to pick which bills to pay and juggle the finances to keep their heads above water.
No doubt lenders will be rubbing their hands at the prospect of repossessing properties and charging lots of interest and fees in late payment penalties (though they won't admit to it of course).
One of my websites, www.repohelp.info gets a lot of hits with people downloading my free report on the repossession process - which also covers what options there are and action that can be taken to keep your home. No doubt the number of people utilising this report is set to increase heavily.
One thing that many people don't realise is that they can talk to their lender. Many, though sadly by no means all, will work out a repayment plan or switch you to interest only from a repayment mortgage for a defined period so that you can get your finances back on track.
Refinancing (remortgaging) is another option to consider, though care should be taken on what the fees, interest and penalties are on the existing mortgage as well as the new one. It's all too easy to jump out of the frying pan into the fire.
There's also the option to sell your property and rent it back. Again caution should be taken as to the guarantees offered - after all you don't want the rent to jump up after 6 months or to find you're evicted - check all the small print carefully and get all the assurance and guarantees you need before going down this route - and also check for any hidden fees.
For more options - even if you aren't quite facing repossession yet - check out the free report available from www.repohelp.info.
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