Some families `may be unable to remortgage`

18 November 2008

Households across the UK may be unable to remortgage their properties due to having insufficient equity, a publication has warned.

According to a report in the Daily Mail, as the value of houses declines, people could be forced to pay higher rates when they come to rearrange their home loans and some may not be able to secure any deal at all.

This is as a result of mortgage companies penalising those with smaller amounts of equity.

The newspaper states: "Many will not even be first-time buyers, but families that have repaid their mortgage for some years and are moving up the ladder. They will have seen much of this capital eaten away."

Recently, Al Elliot, an adviser at the Homeowners Advice Centre, stated that the repossession of property from homeowners who fall into arrears with their mortgage repayments is in nobody`s interests.

He said that lenders could start offering reduced repayment terms in exchange for a larger equity stake in the house and then could wait for the market to recover.
Related resource:

Remortgage