thePFDblog - Property, Finances & Debt

Interest Rates Rise Again

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).

Repossession Help - Don't Fear The Courts!

The threat of repossession is enough to scare anyone into submission. However, knowing about the process, your rights and what you can do about it gives you a significant advantage over most people who all too quickly give up, give in and lose their home.

There's a comprehensive guide to repossession which covers the process, your options, what action you can take and provides lots of other useful links. It's available from www.repohelp.info - or you can e-mail me for a copy. The process is actually fairly straight forward. As soon as you've missed a payment the lender will write to you. Miss two payments and they more than likely will get their solicitor involved.

The most important thing you can do in this situation is to take action. Contact the lender and explain your situation and aim to negotiate a new payment plan. Make sure you to make notes of conversations, get their responses in writing and aim to follow up your calls with a letter and keep a copy. That way, if you go to court for a hearing you'll be much better prepared.

If you can afford to meet a full monthly payment and contribute a small amount towards catching up with arrears then normally the lender will accept, but it all depends on the lender. Some are far more helpful and understanding than others.

If you can't reach agreement with your lender the next stage will be a court hearing - this is a possession order - a claim to the curt by your lender to regain possession of the property on the grounds of breach of contract (missed payments). Here you can present your case to the judge, who in my experience are normally very helpful, friendly and sympathetic.

The Season Of Goodwill - Unless You Are A Lender!

Well how to you like that! Mr Turner has 3 young kids, it's 3 weeks until Christmas and his lender decides to resort to bullying tactics to get him out of his property - that's right, REPOSSESSION ! There is no season of goodwill with lenders like this!

Mr Turner had a heart attack 18 months ago. He didn't have any form of accident & sickness insurance (and given the recent press and TV coverage there's no guarantee they would have paid out even if he did have some). Around the same time Mrs Turner gave birth to their daughter, also a cut in income as she was now on basic statutory maternity pay.

In their desperation for meeting bills and catching up with mortgage payments they turned to some financial institutions for help, where they found many willing lenders only too happy to provide them with a secured loan at a staggering 8% interest rate and various conditions, fees, charges and penalties attached.

Help Is At Hand - So Use It!

I had several calls this week from people calling my business Faster Property Sale. It amazes me the level of debt organisations allow people to get into. Mr Reynolds called to ask if I could buy his property and rent it back. On further investigation of the loans secured against his property we found he had £20,000 more secured against his property than it was worth on a full open market valuation. He was shocked to learn that some of the unsecured loans were now secured against his property.

The sad thing is if Mr Reynolds had contacted organisations such as the citizens advice bureau, or the consumer credit counselling service first, I suspect his unsecured loans would be much more managable with frozen interest and reduced monthly payments negotiated by them on his behalf. As it is now, the lenders are pushing for an eviction and Mr Reynolds is likely to lose his home.

I am working with the CAB to negotiate the lenders down to a lower settlement figure so that I can buy his property and help him back on his feet. It still annoys me that his lenders didn't help him earlier when he explained the difficulties he was having.

Surveyors Have The Last Word - Don't They?

Right that's it. Surveyors are quickly scaling the ranks of my most irritating and unfriendly people list. A sweeping generalisation - yes. However, all the ones I have met haven't done anything to  disprove this!

My own house was valued last year by a surveyor at £20,000 less than comparable properties, that were smaller and didn't have a conservatory. When I showed them comparables, SOLD PRICES, and lots of estate agent valuations they said mmm, perhaps we didn't do our research thoroughly. Sorry.

This morning I had the the displeasure of seeing another one for a property I am purchasing. There was no conversation, and he didn't have a clue about the area or going prices.