Personal Finance News
What our customers say..."Just keep doing what your doing "
Rising numbers of homeowners 'facing negative equity'
A growing number of homeowners could face debt problems as falls in house prices relative to secured loans are leaving them in negative equity, an expert has warned.
Paul Holmes, chief executive of Firstrung, has highlighted the fact that 50 per cent of those who obtained a mortgage after 2006 are now in negative equity.
He
claimed that this is a frightening statistic but that the situation for these homeowners could actually get worse in future.
Mr Holmes said: "The only saving grace is that interest rates are so low at the moment that mortgage rates are reasonably low."
He advised those who have obtained a secured loan on a property which has declined in value that they could still be better off than those who do not own their own home.
The chief executive said that by continuing to pay down the mortgage until the property market improves, the majority of homeowners will not have lost out in a substantial way.
Andrea Rozario, director general at the Safe Home Income Plans, claimed that those facing retirement are increasingly turning to equity release as a way of obtaining the necessary funds to tide them over in their retirement.
Copyright
Paul Holmes, chief executive of Firstrung, has highlighted the fact that 50 per cent of those who obtained a mortgage after 2006 are now in negative equity.
He
claimed that this is a frightening statistic but that the situation for these homeowners could actually get worse in future.
Mr Holmes said: "The only saving grace is that interest rates are so low at the moment that mortgage rates are reasonably low."
He advised those who have obtained a secured loan on a property which has declined in value that they could still be better off than those who do not own their own home.
The chief executive said that by continuing to pay down the mortgage until the property market improves, the majority of homeowners will not have lost out in a substantial way.
Andrea Rozario, director general at the Safe Home Income Plans, claimed that those facing retirement are increasingly turning to equity release as a way of obtaining the necessary funds to tide them over in their retirement.
Copyright
Published: 19/09/2011
The information in this article was correct at the time of publication and contains time sensitive data and links, it may not be accurate at the time of reading.