Mortgage rescue scheme 'is not the only solution'

Date:Monday 26th January 2009
Author: Max Freedman

Mortgage holders in difficulty should not depend solely on the government's rescue plan, an expert has said.

David Kuo of personal finance website suggested to people that they approach their lender to discuss alternative repayment plans if they face trouble.

He said that mortgage payment holidays or extending the duration of the loan were possibilities.

Mr Kuo warned that limitations apply to the scheme and that people should not presume it will cover them.

He also called attention to the inevitable "red tape", noting that the aid may take some time to materialise.

The scheme, which is intended to reduce repossessions, involves non-profit housing associations buying properties from people who are struggling to meet their mortgage payments.

People could then remain in their properties either by paying rent or using an equity loan to keep the mortgage payments down.

It is probable that people who qualify will be elderly or somehow vulnerable, for example by having dependent children.