Rate cut may not help borrowers say National Homebuyers
Homeowners in financial difficulties may not receive any relief, even if the Bank of England chooses to cut the base rate of interest.
[UKPRwire, Wed Jan 16 2008] Mortgage borrowers often expect their repayments to fall inline with the base rate but the Council of Mortgage Lenders (CML) pointed out that this is not always the case.
It is bad news for anyone in financial difficulties but the organisation revealed that there are may other factors which affect mortgage repayment rates.
"The factors that determine lenders' rate-setting policies are more complex than simply the level of the bank base rate," the CML said in a statement.
"Lenders must have regard to their own cost of funding from savers, and also from wholesale sources (where Libor [London Interbank Offered Rate] is a more relevant indicator of cost than the bank base rate), and the level of margin they are seeking to achieve, as well as their view of how rates may move in the future and how this may affect future pricing," it continued.
People struggling with their finances may consider a fast property sale in order to avoid repossession. National Homebuyers says people facing financial problems should consider a quick sale of their property.
Director Julian King says, "Often, selling a property on the open market does not afford the homeowner the required speed of sale in order to avoid repossession.
"Homeowners must be aware that in order to avoid losing their home they have to act quickly in order to avoid repossession".
Mr King is a Director of National Homebuyers, the UK's leading fast property sale firm that guarantees to make a cash offer to purchase each property quickly, regardless of its condition or location. The company is also a leading provider of Mortgage Rescue Schemes such as Sell and Rent Back.
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