When should you classify your mortgage arrears as critical?
The last few days have seen the subject of mortgage arrears hit the headlines on numerous occasions with the government, the Financial Services Authority and mortgage lenders in the UK at odds with each other regarding future strategy. While officially there is no set maximum mortgage arrears which will prompt your lender to repossess your home, it is no surprise to learn that UK mortgage lenders appear to be quicker off the mark in repossessing homes than ever before.
Whether a repossessed home could in fact be seen as an investment on behalf of the bank at this particular part of the property cycle is debatable, but ultimately housing transaction levels are well below those seen only 12 months ago. Each home which is repossessed not only places more pressure on the UK public but ultimately on the UK public purse.
Despite a number of mortgage schemes announced by the UK government, with the idea that they would delay house repossessions, the situation appears to be worse than ever. When you consider the likes of Northern Rock, which is 100% owned by UK taxpayers, has the worst track record for repossessions in the sector this just about says everything. While each bank will have a particular cut-off point at which your mortgage becomes critical, it is very much on a case-by-case basis with your overall financial stability and potential income taken into account.
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