There are many homeowners at present who are just about managing to keep on top of their mortgage repayments each month, with the financial relief coming as a result of the rock bottom base rate, which still stands at just 0.5 percent, where it has been for over two years. However, many of these homeowners could find themselves in serious trouble if the base rate increases and their repayments rise.
Some banks are now taking what is being considered an approach that is proactive by some, but is being hailed obtrusive by others. The bailed out banks Northern Rock and Bradford & Bingley are planning to carry out credit checks on existing mortgage customers to assess their financial situations and will be contacting anyone that they consider to be at risk of defaulting to advise them to cut back on their spending.
Basically, the banks want to inform high risk customers that if the interest rate rises and they fall into arrears they could end up losing their homes, so they need to start cutting back on spending now in order to free up more income. They will be advised to reduce their spending on non-essentials and luxuries such as mobile phones, cable or satellite TV, going out, and spending on treats. There has been a mixed reaction from consumers and officials with regards to this approach.
Tags: Finance, Bingley, luxuries, finances, controversy, arrears, managingOne bank official said: “Some people won’t cope when interest rates rise, but for others there are remedies. They need to think about what is their most important debt. It is not their credit card or renewing their Sky subscription, or going out for the latest mobile technology. It is their mortgage. We want customers to look at their finances and change their behaviour.”
Posted in: 
0 comments:
Post a Comment