House repossessions in the UK are estimated to become as high as 200 for every day of the week, and that by the end of 2009 there will have been a total 75,000. Such high levels of home repossessions have not been seen since 1996. Despite unprecedented low Bank of England interest rates resulting in low mortgage rates, increasingly more people are finding it difficult to maintain their mortgage payments. For the majority of people failing to keep up with their mortgage is extremely distressing, and the consequences can be severe. For people who find themselves in this situation there is some help available. Recently the government has upgraded the Support for Mortgage Interest, or SMI, scheme. If people have got into difficulties as the result of redundancy, then after thirteen weeks of unemployment the government will pay mortgage interest on loans of up to £200,000. On the surface this does seem to be very generous indeed, however there are several restrictions that make the scheme accessible to only a limited number of people. For instance, if the house is co-owned and one of the owners continues to earn over £5,000 a year, then they do not qualify for the scheme. If savings are held for over £16,000 then this also bars qualification. For many people there is the safety net of mortgage protection insurance if they have had the foresight to take out an appropriate policy in time, however this is of little use for the self-employed as the only way they could qualify would be to go bankrupt. Given these circumstances how do you manage to avoid house repossession? People who are finding it difficult to keep up with their mortgage payments are advised to seek help from a debt management organisation. There are various strategies available for those in debt that can avoid such calamitous consequences. In certain circumstances bankruptcy cannot be avoided and often this means losing one's house, especially if there is any equity in it. In other circumstances IVAs and debt consolidation schemes can be organised that will allow the individual to keep the house. Early action is required.
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