Experts are warning that nearly 1.4 million fixed mortgages are set to become flexible mortgages and home owners may not be prepared for how high their payments will go. The current subprime crisis was caused by similar problems and these experts are concerned that we are about to go through an instant replay and end up in a worse economic situation. Home owners are being encouraged to refinance as quickly as possible if their fixed mortgage is set to become a flexible mortgage within the next year.The Money Advice Trust’s Chief Executive, Joanna Elson said “The idea behind the initiative is to give free early advice to these borrowers coming off their fixed-rate deals and highlight key sources of independent and free confidential advice, such as adviceUK members, Citizens Advice Bureaux, Business Debtline, National Debtline and the Consumer Credit Counselling Service” Michael Coogan CML director general stated, “A large number of borrowers are likely to see their mortgage costs rise when their fixed-rate deals expire this year. We may be past the peak of the ‘payment shock’ this will produce, but market conditions remain uncertain and borrowing costs are continuing to rise. Borrowers need to plan ahead for higher monthly payments and look carefully at the options available to them. Anyone who thinks they might have a problem in paying their mortgage should talk to their lender as soon as possible. The earlier the borrower makes the lender aware of any potential payment problem, the wider the range of options for dealing with it.”
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