Many homeowners are deciding they are struggling financially at the moment and with the crumpling state the housing market is in at present, new problems are rearing their heads that many people will not have previously worried about.br /
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With house prices crashing over the last couple of years and more falls set to follow, it is certain that there are a large number of people on the market for whom their house price is worth far less now than when the bought it a year or two ago. If you are one of these people and are not intending on selling your home, then you might think you are not affected, but how wrong can you be?br /
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If you have to sell your home and it is under the original buying price, then you could be in real trouble as you might find the mortgage isnt covered by the sales price. In this case, you really should speak to a good local financial advisor as soon as you can to find out what options could be open to you.br /
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But back now to those borrowers that are not planning to sell their properties and are happy to sit and wait for the housing market to recover. Here we can also include those that are likely to sell, but know that the house price is still covering the mortgage and allow for the fact that that with the price of their next house also falling, the bridge between the two houses is less.br /
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What is the problem for these people? Well many borrowers who bought a house at the peak of the house prices will have bought them with fixed mortgages. If you secured a 5-year mortgage, then you could possibly have a few more years before you need to worry. But if you secured a very low rate with, as goes together with the best rates, a short fixed term, you might be in need of a new mortgage very soon.br /
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Two years ago, some lenders were happy to lend 125% of the house value. This is not the case any more and many banks are punishing those borrowing more than 75% with higher interest rates. Even if you only borrowed 75% of the house s value when you bought it at its peak price, if it has lost 10% of the value so far, then your next mortgage now has to be for almost 85% of the houses value, even though you are not borrowing a penny extra.br /
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This difference is purely because the price of your property has fallen, nothing else. But if you borrowed 90% or more, then you could now be looking at an impossible 100% mortgage at best. Many lenders will now not touch you, even though they were probably clamouring for your business when you first bought your home.br /
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How can you get help? Well seeking good professional advice from a financial advisor is a lifeline. Get him to help you a href=http://www.comparemortgagerates.co.uk/ target=_blankcompare mortgage rates/a for those products that are open to you – get him just to show you the best rate that apply to your circumstances. If you a href=http://www.comparemortgagerates.co.uk/ target=_blankcompare top remortgage rates/a and none are affordable, then ask for alternative options from him. Extending the loan can be costly in the long term, but you may be able to move other finances around.br /
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Whatever you do, it is always worth starting to look early, rather than leaving it to the last minute. You can always swap to a better deal later, but if the search takes too long, you could be out of time if you keep putting off the dreaded deed.
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