Help With Mortgage Problems Needed - Thursday, 28th November 2007

Help with mortgage problems needed? Its is predicted that one in three UK homeowners will need help to keep up their mortgage payments...

According to a report published by a consumer research group, people with poor credit reports were not the only ones at risk. Those who are self-employed or had moved house frequently were also in danger of mortgage problems.

The research said that 9% of British mortgage holders were classed as sub-prime, while a further 24% were classed as being non-standard borrowers and at relatively high risk because they had irregular incomes.

With today's more conservative lending climate, the unconventional financial circumstances that these homeowners present, means that they will now face higher repayments and increased lenders' fees when remortgaging or moving house.

The Council of Mortgage Lenders (CML), whose members accounted for 98 percent of all UK residential mortgage lending, disagreed and said the figures quoted were too high.

In an e-mail the CML said preliminary data showed around 5 to 6 percent of all outstanding mortgages were held by people with blemished credit records, while around 16 percent of mortgage loans in the last year had been extended to the self-employed.

Demand for non-conforming mortgages to grow
The research stated that demand for non-standard mortgages, which is believed to be approx 125 billion pound market, was set to grow as people's financial circumstances become more complicated due to rising divorce rates and the growing popularity of self-employment, but supply was unlikely to keep up.

Nearly two fifths of the adult population, or some 18 million people, would probably now be considered as non standard borrowers and that figure was set to rise to 20 million by 2012.

Ironically as lenders become increasingly cautious, these non-standard mortgages will become harder to come by, leaving more adults without the finances needed to buy property.

Based on a survey of almost 2,000 adults, one in five who were interested in getting a mortgage in future already see some problems with their applications because of their income, working status or personal circumstances.

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