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HTML Ready Article. Click on the "Copy" button to copy into your clipboard. <!DOCTYPE HTML PUBLIC '-//W3C//DTD HTML 4.01 Transitional//EN' 'http://www.w3.org/TR/html4/loose.dtd'>; <html><head><title>Article Directory Online: Free Online Article Submission | Bad Credit Mortgages Contribute To Rising Repossessions</title></head><body><h3>Bad Credit Mortgages Contribute To Rising Repossessions</h3><br><br> By: Michael Sterios<br><br><p>Repossession numbers in the UK are on the rise and are expected to increase further during the current year. Some analysts are putting the blame squarely on bad credit mortgages and the loose lending criteria of the past five to ten years.</p> <p>It is estimated that up to sixty thousand homes could be at risk of repossession during this year alone. This is double the number of home owners that were at risk last year. Properties at risk of repossession are calculated as belonging to home owners who pay more than three quarters of their monthly disposable income on their mortgage repayments.</p> <p>While this number has doubled since last year, analysts are quick to point out that it falls short of the seventy five thousands homes that were repossessed in 1991. This is widely regarded as the worst year for the property market in the UK in modern times. The UK economy was in dire straights and interest rates were high due to controversial macroeconomic policies that were being implemented at the time.</p> <p>While the estimated number of homes at risk during this year falls short of the number in 1991, it is still high. Now that the credit crunch is in full swing and financial analysts have begun to analyse the problem rather than deny its existence, many are concluding that bad credit mortgages are to blame for the increasing number of home repossessions.</p> <p>“Bad credit mortgages” is a term used to describe the home loans that were issued to people with poor credit histories. These mortgages were issued with little reference to the credit files of the applicants as interest rates were historically low at the time and the repayments that the home owners were due to make seemed manageable.</p> <p>However the interest rates attached to the mortgages were usually fixed and discounted for a short period of time. Now that the honeymoon rates on most bad credit mortgages have expired and interest rates have crept upwards borrowers have begun to struggle to keep up with their monthly payments. Hundreds of thousands of home have now been repossessed in the USA because of the credit crunch, and it is apparent that many of the homes were financed with bad credit mortgages. A similar scenario is now occurring in the UK as home owners simply give up trying to fund their mortgage payments each month.</p> <p>However, just because sixty thousand homes are said to be at risk, it does not mean that they will be repossessed. Less than thirty thousands properties were repossessed last year, which represents about a quarter of a percent of all mortgaged properties. With the UK authorities in the midst of an interest rate cutting trend it may be the case that enough relief is on the way for struggling households that the actual number of properties repossessed this year may not exceed last year’s figure.</p> <p>Whatever happens to the repossession rate, bad credit mortgages have received a lot of negative press due to the credit crunch and the potential problems it may cause over the next few years. Lessons must be learned by both lenders and home owners regarding the safety of bad credit mortgages so that the same scenario is not repeated in the future.</p> <br><br> <b>Author Resource:-></b> Michael Sterios is a writer for <a href="http://www.badcreditmortgagesource.co.uk" title="http://www.badcreditmortgagesource.co.uk" target="_blank">http://www.badcreditmortgagesource.co.uk</a><br><br><b>Article From</b> <a href='http://www.articleonlinedirectory.com/'>Article Directory Online: Free Online Article Submission</a><br></body></html>
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