30-01-2008
FSA offers warning over homeowner difficulties
News by Adfero for Simply Business - independent providers of public liability insurance, business finance, landlord insurance, buy-to-let mortgages & commercial mortgages.
Britain's Financial Services Authority (FSA) has warned that a number of the nation's homeowners could become at risk.
The regulator believes that, in the event of an economic downturn, over one million of Britain's home-owning population could find themselves entering into financial difficulty, leading to the possibility that they may lose their home.
"It is not necessarily the affordability of the mortgage. It is their other debt. Customers with other borrowing in addition to the mortgage are struggling," said Lyndon Nelson, head of financial strategy and risk at the FSA, in a report by the Guardian. "The other borrowings tip them over the edge".
In total, the FSA believes that there are three warning signs to indicate whether someone may be at risk of losing their home, with one being the fact that the outstanding mortgage balance is currently more than 90 per cent of the value of the home.
Those with borrowing of more than 3.5 times their income and those with loans undertaken for a period of over 25 years also display warning signs identified by the FSA.
Britain's FSA was first incorporated on June 7th 1985 under the name of the Securities and Investments Board.