FSA mortgage lending data

Richard Mason, Managing Director from independent financial website Moneyextra.com comments on the recent FSA mortgage lending data: "The increase in mortgage arrears by 31 per cent is of no surprise, and was expected after the government's intervention last year which saw lenders delay taking action against customers that fell into arrears for six months.

"For those people struggling to keep up with mortgage payments, immediate action is the best remedy to avoid having your home repossessed, and we urge struggling homeowners to inform their lender as soon as possible of their financial situation.

"Lenders will likely want to arrange a regular and steady payment plan, whereby homeowners can repay its debt gradually, and avoid incurring additional costs that are a consequence of repossession, such as legal fees and arrears charges.

"Interestingly, the market is showing hope of recovery as the Government puts increasing pressure on banks to work with homeowners. While the number of available mortgage schemes remains low, (Moneyextra.com) figures released today show an increase of 6.7 per cent in available mortgage products, compared to the beginning of March. Furthermore, the number of tracker products has increased 25 per cent in the last four weeks.

"Lenders will typically sell a repossessed property up to a fifth less its value, so make sure you spot trouble when its coming, don't stick your head in the sand, and consider downsizing if necessary.

"If you are unsure about whether your mortgage is right for you, do your research beforehand and consider taking advantage of current low rates or locking onto a fixed scheme, which may help you better manage your out-goings, meaning you are less likely to default on mortgage payments."