More borrowers are paying off their debts

Grovelawn Financial News 11/07/2012

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Figures show that missed payments are declining

Britain’s busiest firm of bailiffs have said that they are aware that more and more people are paying their mortgage on time and incurring less and less late payment penalties.

Six out of10 people who had previously missed mortgage payments are now paying off their debts. Ascent, part of Irwin Mitchell, the national law firm, and it analysed more than 24,000 households which have missed monthly mortgage payments and undergone debt counselling. Figures show that during 2012’s second quarter the proportion of homeowners who paid off some of their mortgage arrears increased by 11per cent to a total of 60per cent compared to 36per cent of homeowners who had defaulted and were paying debt back in 2009. Figures also highlighted the fact that home owners are paying back bigger amounts of their debt compared to those in previous years.

Approximately 2,650 people were asked questions by a debt counsellor during the April, May and June of 2012. Just over 40 per cent of borrowers paid an amount back equivalent to or more than one month’s mortgage – representing a significant rise on the 37per cent that did the same during 2011. During 2009, only one per cent of people cleared their arrears completely and this figure is now nearer 4per cent.

Adrian Coles, director general of the Building Societies Association, agreed: “Borrowers who speak to their lender promptly are more likely to repay their arrears than those who wait to make contact. Early contact enables the lender to consider all reasonable options to assist the borrower.

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