Don’t Let An Illness Or Unemployment Cost You Your Home
As a nation of homeowners, we are particularly vulnerable tothe effects that accident, sickness, or unemployment could haveon our ability to meet our monthly mortgage repayments.

In view of this, it is quite alarming to note that of the 11million mortgage borrowers in the UK, only 20% currently haveany form of independent insurance to protect their mortgagerepayments in the event of accident, sickness, or unemployment.

A large number of borrowers wrongly assume that State Benefitwill protect their mortgage repayments if they are off work sickor lose their jobs. But in actual fact, only 30% of people whoput in a claim for State Benefit in respect of their mortgagerepayments receive any help. This is because: - If you took outyour mortgage on or after 1 October 1995 you will not receiveany State Benefit for the first nine months of sickness orunemployment.

- If you took out your mortgage before 1 October 1995 you willnot receive any State benefit for the first two months. Afterthat, you will, subject to eligibility, receive 50% of the fullentitlement for the next four months.

- If you and/or your partner have more than £8,000 in savings,you will not receive any State benefit. Restrictions also applyif you have more than £3,000 in savings.

- If your partner works for more than 16 hours a week, you willnot be entitled to State Benefit.

Even for those who are entitled to State Benefit, thisassistance only applies to the interest element of your mortgagerepayments. Any capital repayments or any premiums forassociated life cover/savings vehicles are not covered.

If you fall behind with your mortgage repayments and cannotrepay the debt, you could end up losing your home. That’s whythe Council of Mortgage Lenders encourages all mortgageborrowers to consider taking out mortgage payment protectioninsurance - also known as accident, sickness and unemployment(ASU) cover.

This type of protection will help you to cover your mortgagerepayments and any associated insurance premiums for up to ayear

if you are unable to work due to unemployment, accident, orsickness.

- You choose the amount of cover you need per month

- You choose the type and level of cover required

- You choose how long you want to wait before claims are paid

- You pay a low monthly premium

- The policy pays a fixed monthly benefit for up to 12 months ifyou are unable to work due to accident, sickness, orunemployment.

You will normally be able to make a claim if:

- you have lost your job in circumstances beyond your control -e.g. redundancy - and are registered as unemployed, or

- you are unable to work due to a disability/illness and you areunder the regular care of a doctor or consultant.

For more information on protecting your mortgage repayments,visit the UKMortgages & Remortgages website.

House-buying Caution Fuels Remortgage Boom
The proportion of UK remortgages as a percentage of loans approved over the last six months has grown significantly as cautious homeowners are turning their back on buying houses in a period of perceived financial instability.

Figures produced by Hamptons International Mortgages show that the proportion of home loans used to purchase a property has fallen 12% since March 2007 and now stands at 32.09% of total loan approvals. Conversely, the amount of remortgages approved has grown by 9% since March and now stands at almost 28% of the entire market with almost all of that increase coming in the months of August and September.

It has become apparent that the housing market is entering a period of uncertainty and managing director at Hamptons, Jonathan Cornell believes it is further evidence of people heeding global warnings of an over-priced UK residential property market. He said: “The clear disparity in the directional change of remortgage and purchase lending over the month of September offers potential evidence that supports recent reports of the housing market slowing down, as less people are willing to commit to mortgages on house purchases. “

Two other significant findings were highlighted by the recent research. Firstly, the loan-to value (LTV) of remortgages fell significantly in the space of a month; August figures showed an average LTV of almost 66% which dropped to just under 50% a month later. Secondly, many remortgaging borrowers are opting for tracker mortgages, gambling on the Bank of England rate going down over the coming months or years, leading Cornell to comment: “Remortgaging has considerably increased since August 2007, yet borrowers are now borrowing at a lower LTV, choosing variable rate over fixed rate deals. This suggests that people are still unsure about where

the market is going and as a consequence are making cautious decisions.”

Despite the caution, people are still willing to take on new borrowing in the form of remortgages, so even though they might be unsure about the future of house prices they are not so wary about their own financial future.

Remortgages are also growing in popularity as homeowners with unsecured debt are trading it off against the equity in their property, to relieve some of the pressure on the household’s monthly outgoings. Some are taking this action in conjunction with the expiration of an existing fixed rate, tracker or discounted rate mortgage; although increasing numbers are remortgaging solely as a way of clearing their unsecured debt.