Debt management could help new mortgage holders

27/01/2010

The need for debt management schemes may increase as homeowners fail to find approval to re-mortgage their properties.

Figures from the British Bankers Association (BBA) have shown that the numbers of re-mortgage approvals fell from almost 70,000 in June 2008 to just above 20,000 in December 2009.

However, the data suggested that new mortgage purchases have increased ahead of the end of stamp duty relief.

December 2009 saw a rise of £0.1 billion in mortgage lending from November rates

Kevin Still, director of EuroDebt, commented: "The massive decline in re-mortgaging reflects homeowners having to move to standard variable rates (SVR) when their fixed rate deals expire. Switching to another lender is not straightforward if you have debt problems, poor loan-to-value (LTV) or reduced income.

"Debt consolidation by turning unsecured debts into secured debts should only be undertaken after getting proper financial or debt advice."

Tags; Housing Debt and Bills,

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