| A million 'could lose home' in credit crunch
Other debts such as personal loans, credit cards and overdrafts could cause the problems. Home repossessions are already rising rapidly, soaring from just 3,700 between January and June 2004 to 14,000 during the same period last year. Mark Sands, director of personal insolvency at the accountants KPMG, said: 'It is a "drip by drip" problem. An extra £5 on their mortgage, £10 on their council tax bill and so on is really putting the squeeze on people who are financially overstretched already.' Many homeowners coming to the end of an existing fixedrate deal may not be able to switch to another loan with a cheap rate, and will have to stay on at the much less attractive standard variable rate. Banks and building societies will see them as a high-risk customer. An FSA spokesman said: 'We are not saying this scenario will definitely happen but we want to raise awareness of the risks.
Mortgages & homes - Mortgage features
They are the most likely to have their homes repossessed, the regulator said yesterday in its annual Financial Risk Outlook. This would be double the previous record of 75,540 repossessions in the dark days of 1991, according to the Council of Mortgage Lenders. The other 890,000 homeowners are at risk of 'financial difficulty'. This could include repossession or could simply involve missing a monthly repayment or a credit card payment. Lyndon Nelson, the FSA's head of financial strategy and risk, said it may not be mortgages which 'tip them over the edge'. Other debts such as personal loans, credit cards and overdrafts could cause the problems. Home repossessions are already rising rapidly, soaring from just 3,700 between January and June 2004 to 14,000 during the same period last year.
Busting money myths
The only way to determine whether a fund suits your ethical standpoint is to ask about its strategy. Will it invest in mining companies or commercial logging? In tobacco or arms companies? Refinancing Many people refinance their credit-card debts, personal loans and other expensive, unsecured debt on to their mortgage, believing it makes sense to wrap it all up in a single, lower-rate loan. This can be an expensive mistake if you don't keep finances under tight control. The problem is that although you may be able to halve your interest rate by switching your credit-card debts to your mortgage, you're likely to be lengthening the time it takes to pay the balance off -- and that will cost thousands extra. For example, Aussie Home Loans says a $10,000 credit-card balance switched to a mortgage at 8.57 per cent would increase mortgage payments by $81 a month.
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