Coping with a mortgage rate hike.

Borrowers may find themselves in difficulty this year as more lenders introduce a mortgage rate hike.

Some home-owners are expected to get into financial difficulty as mortgage rates increase and they are unable to cope with the extra costs.

For those who are likely to have a mortgage rate hike and get into trouble, it is important to contact their lender immediately.

The Citizens Advice have anticipated that many home-owners will experience financial hardship this year and have produced a practical guide offering advice as to what home-owners should do. They have also advised that lenders should repossess homes as a final act only and say that other options such extensions to the existing mortgage terms should be tried first.

Various initiatives have been developed to enable people in stay in their home.

Some allow housing associations to buy a borrowers home allowing them to remain living there. In England and Wales the scheme is known as Mortgage Rescue and in Scotland it is known as Mortgage to Rent, both schemes are run by local authorities. Shelter, the housing charity also provides advice to troubled home-owners living in England, Scotland and Wales.

Another scheme called Home-owner Mortgage Support, allows house-holds whose income falls unexpectedly, to defer part of their mortgage payment for up to two years. However, only a few lenders have said they would take part in this scheme.

For all borrowers it is essential that they to choose the right mortgage product from the outset. It is also important for borrowers to ensure that they have a contingency fund to cover any extra costs likely to be incurred through a mortgage rate hike.

Some may find that a competitive remortgage deal offering a lower rate is the best option. Here at Deal Direct we are familiar with different remortgage providers lending criteria and we are best placed to source you a competitive deal.