Homeowners turn to loans to pay mortgages

Increasing numbers of hard-pressed homeowners and tenants are turning to personal loans and credit cards to fund their housing costs.

Lauren Thompson, The Times - 3 July 08

More than 4 million households have taken out a personal loan or credit card to cover their mortgage or rental costs in the past year, according to a survey by comparison service Moneysupermarket.com.

Tim Moss, head of loans and debt at Moneysupermarket.com, said: “It’s a very serious situation when you have people turning to a short-term solution to fund a long-term product.

“Taking out a loan specifically for a mortgage goes against lenders’ rules. To be funding your mortgage repayments with a credit card that will charge you interest of over 15 per cent is not the solution in the long term.” full article