The number of mortgage repossessions rose by just over 8 per cent in 2006 according to the Council of Mortgage Lenders (CML) and the total 17,000 which took place last year was a staggering 65 per cent higher than the number of repossessions in 2005.
Property purchasing company, A Quick Sale, have seen a resulting increase in the number of struggling individuals looking to them for a solution to their problems. Unfortunately, many people are letting their financial situations get to crisis point before seeking help, which can often lead to an even worse predicament, says Richard Watters, managing director of the company.
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He continues: The recent interest rate rises have done little to help people who were already struggling with their finances, and particularly those who are not on fixed rate mortgages the dramatic increases in their monthly payments have tipped them over the edge.
This year offers no comforting signs of a let up though, with the Royal Institute of Chartered Surveyors predicting that more than 50 families who are unable to maintain their mortgage repayments will lose their homes each day this year.
Although the number of people in mortgage arrears for over three months has steadily fallen since 2005, at the end of last year the total still stood at a massive 103,940.
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There are a number of misconceptions about mortgage arrears, one common one being that lenders will kick families out of their home as soon as they fall behind on a payment. Instead, the management will pass to the arrears collection department who will contact borrowers via phone and post. It is only when the arrears go beyond four to six months that the account is referred to the lenders solicitor.
Once the solicitor receives notification, they issue the homeowners with a payment demand alongside a warning that County Court Repossession proceedings will start if this payment is not met.
Even if a court bailiff has been ordered to the house, it is still possible to salvage the situation and avoid eviction. Watters says: If you are unable to reach an agreement with your lender to secure your property, rather than throwing in the towel and losing your home, A Quick Sale can offer flexible alternatives that will allow you to stay put.
People are often ashamed to tell others that they are in financial difficulty so they frequently dont get the help and advice they need to sort out their problems. Over a third of Brits are struggling to manage their day-to-day finances, and one in five would never tell people if they had to sell their house due to their financial situation.
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