Mortgage repayment requires personal responsibility

Published: December 12, 2007

Homeowners need to consider their financial position carefully and be fully aware of all the conditions of any deal they are entering into before taking out a mortgage, a leading sector association has warned.

While lenders must take a compassionate attitude towards homeowners experiencing difficulties in keeping up with mortgage repayments, borrowers must ensure they are, as much as possible, capable of meeting their obligations, according to the Intermediary Mortgage Lenders Association (IMLA).

Acknowledging that borrowers can face unexpected financial hardship, the IMLA highlighted lenders' general willingness to work with those struggling to keep up with their commitments and avoid taking possession of a property.

"Inevitably, in a market as large as ours, there are occasions where borrowers have taken on a mortgage or other secured loan that proves to be unaffordable or only marginally affordable, and where a payment shock or other change in circumstances makes it difficult for them to pay," IMLA executive director, Peter Williams, said.

"It is also a matter of personal responsibility. Borrowers do need to read the small print, consider their financial position carefully and make sure they will be able to meet their obligations even if their financial position should deteriorate temporarily in the future," he added.

Mr Williams also added his voice to the calls from the Council of Mortgage Lenders for an overhaul of the government's Income Support for Mortgage Interest system.