2008 will be tough for borrowers say National Homebuyers

Many people face a tough year in 2008 as they fight to avoid repossession.

[UKPRwire, Fri Dec 28 2007] That is according to the Repossessions Advice Centre (RAC), which says that the global credit crunch is set to have a huge impact.

The problems centre on those who took out fixed-rate deals a couple of years ago and are about to see these deals end.

Borrowers are now struggling to remortgage because lenders have become much more conservative about who they lend to.

With many people struggling to get a good deal, there are likely to be more borrowers with high-rate mortgages and these people will be struggling to avoid repossession as they try to keep up with their increased repayments.

"[Many people are] coming out of those [fixed rates] and… They're struggling to remortgage, because the lenders have just stripped out all the criteria of what they would accept," said Paul Fletcher from the RAC.

"We've actually done an analysis, and some people's mortgages are going to be going up by up to 65 per cent. They're going to be jumping off fixed rates of 5.5 to six per cent, jumping up to 8.5 per cent rates.

"Even if interest rates come down by a percentage point, they're still going to be paying 7.5 per cent rates," he added.

Fast property sale expert Julian King adds, "Many people are suffering with financial difficulties as a result of the global credit crunch.

"More and more homeowners will be looking for a quick property sale in 2008 to limit the financial burden of their property and maximise the value before prices continue to fall.

"The effect of the credit crunch will continue affecting homeowners - particularly sellers - for many more months".

Mr King is a director of National Homebuyers, the UK's leading fast property purchase firm, guaranteeing to make an offer on any property in the UK, regardless of its condition or location for vendors who need a quick sale. The company also offers a Sell and Rent Back mortgage rescue scheme for homeowners who want to release equity in their homes.

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