Mortgages can and some do go bad. Its not uncommon for people to take out mortgages beyond their able repayment status, or those whom take out mortgages that borderline their outgoings, So what happens when mortgages go bad? and how do we deal with it?

There are different circumstances for a mortgage to turn into your worst nightmare, such as

1) Mortgage puts a servere strain on your outgoings If you find more then 85% of your outgoings are purely on your mortgage then you are a victim to a stretched income. If you took your mortgage out at an attractive rate, you may have come to the end of your deal, thus putting you in liability for a higher repayment amount with any elevated rises in the mortgage interest rate. When taking out a mortgage, you should always bare in mind changes of circumstance aswell as how much you have remaining a month for other essential items.

2) Interest rate rise puts your income out the window If you struggled to meet your mortgage repayments because of elevating interest rates, then it may be time to remortgage or to consider various other options. Pushing your income to its limits when you first apply for a mortgage is a bad idea, as after 2-3 years your rates can rise, your deal could come to an end, aswell as the Bank of england interest rate rises.

3) Unforseen circumstances can leave you in a disabling state of mind If you have been hit by unforseen circumstances and are not covered by payment protection insurance or any other form of repayment protection, then you may be bearing the brunt of the bore, unforseen circumstances can include injury by accident, illness or unemployment.

So that gift wrapped mortgage at 5% may have changed significantly since you first took it out, and as many people still do, you should always look at what you can afford on a mortgage in a realistic fashion. That extra lump of interest on your mortgage could make the difference between a good reliable payer to someone in arrears mounting up bad credit.

Mortgages are not always what they seem, it is vital to read any small print before proceeding with any form of mortgage application. There may be hidden interest charges and penalties to compensate a lower interest rate, so that 5.29% rate you saw in the high street window may be laced with charges exceeding �2000 – �5000 which is compensating for a slightly higher rate in order to look more attractive.

Good mortgages can turn bad, prepare yourself and save for rainy days and your mortgage can stay in your good books, rather then arrears.

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