Mortgage Debt And The Fear Of Repossession

When you take out a mortgage, naturally you then become in debt. It is a loan you are taking out and therefore has to be repayed. I think some people forget that a mortgage debt is still a debt, yet it is slightly different to a normal credit card debt, for example.

With a mortgage debt, you have to ensure that you keep up your repayments on the home you have, otherwise it may be repossessed.

Repossession is a drastic move, but sometimes it is the only way for lenders to claim back the lost money. In August 08 it was reported that the number of homes being repossessed has risen by an incredible 24% since 2007. These are worrying figures which mean people have been attracted by the offers of 100% mortgages which they can then not repay.

Lets just clarify the repossession process. It does not always mean that the mortgage holder loses their home. It is more a case of when the court grants an order for for the possession of a home. This process can actually be abandoned if the mortgage lender and borrower can come to some sort of agreement for a repayment deal.

In the second three months of 2008, mortgage possession claims grew by grew by 17%, compared with the same period a year earlier.



MORTGAGE POSSESSION ORDERS MADE - Source: Ministry of Justice




I think this shows just how big a mortgage debt can be, and taking out a 100% mortgage that you can't afford just isn't recommended, nor is it likely to be something offered by lenders anymore.