As the recession continues to bite into the UK property sector, more and more people are struggling to cover their monthly mortgage payments and looking for assistance. While the homeowners mortgage support scheme has been in place for some time there is some controversy regarding the basis on which the scheme operates.
In simple terms, households who see a significant drop in their income which could take away their ability to cover their monthly mortgage payments will have the option to switch to an interest only mortgage and defer up to 70% of interest payments from a maximum of two years. While this may well give some short-term relief to those struggling to survive in the UK, there is significant concern that all this is doing is stacking up larger debts for the future.
If those who take part in the homeowners mortgage support scheme see no improvement in their financial status within the two-year period then ultimately they will be in the same position with a higher debt load. The fact that many of the U.K.'s major mortgage providers refused to join the scheme says everything, with some citing the fact that they already have better schemes in place which are available to struggling homeowners.
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