Mortgage rates may rise by 50 per cent for thousands, says National Homebuyers
Thousands of homeowners across the UK could see their mortgage repayments soar by an incredible 50 per cent.
[UKPRwire, Thu Oct 04 2007] Moneygate says that many people coming off fixed-rate mortgages could be reclassified as 'high risk', meaning that they will be put on a sub-prime deal when they remortgage.
It means that some will face rates up to 2.5 per cent higher than the market rate and is sure to lead to financial difficulty and a surge in home repossessions.
"The mortgage market is changing by the day. As lenders look to tighten their terms a person could be labelled a bad credit risk and sub-prime just because of a small financial error in their past," warned Dennis Reed, director of Moneygate.
"The knock-on effect of that re-classification is very significant - a mainstream mortgage payer being shunted into the sub-prime market could face crippling interest charges of up to 2.5 per cent higher than average," he added.
It is part of the fallout from the American sub-prime crisis and is likely to have particular impact on anyone whose circumstances have changed since they first took out the mortgage.
Julian King of National Homebuyers says, "Those expecting an anhealthy increase in their monthly payments are already seeking a quick property sale.
"National Homebuyers is seeing a continued increase in the number of enquiries from people who are looking to achieve a quick sale of their property in order to limit any future loss in value.
"Notably, this could be someone who has gone through a divorce, is now unable to work due to ill-health or has suffered a close family bereavement".
National Homebuyers are the UK's leading fast property sale firm, guaranteeing to make a formal offer to purchase any property in the UK from vendors who need a quick property sale.
Company: National Homebuyers