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- All homeowners should take steps to stay in control of finances
- Not just the over-indebted at risk of unmanageable mortgage repayments

HOMEOWNERS who don’t consider themselves to be at risk of falling behind with their mortgage should ensure they don’t become complacent and let the wind whistle in through the back door, says standalone payment protection adviser

“The FSA’s initiative* to support those who are in danger of falling into arrears in the current economic climate is highly commendable,” says MD Shane Craig. “Anything that helps to prevent people from losing their homeowner status is to be applauded.

“But those who reckon their finances are watertight and can stand the pressure of reduced borrowing options and rising food and energy prices should beware of the unforeseen hazards that can result in a sudden loss of income.

It’s not just sudden hikes in mortgage repayments as cheap deals come to an end that can produce a gaping hole in borrowers’ monthly budgets. Redundancy, accident or illness can deal a swift blow to homeowners’ ability to maintain their mortgage repayments if they have no alternative source.

Staying in control – the mantra of the FSA’s current campaign – should start before financial trouble comes knocking,” says Craig.

“For example, if your employer offers adequate sick pay should you be off work for some time your mortgage should not be in jeopardy. But if that’s not the case, you could be facing serious hardship quite quickly.”

Mortgage payment protection insurance (MPPI) is one way of staying in control of that particular problem with affordable ASU** policies from costing just £3.70 to provide a monthly benefit of £100.

“The tide has unquestionably turned against easy credit and some borrowers will no longer be able to stay on top of their debts but for those who are still in calm waters, using aids such as MPPI will go a long way to helping them avoid financial icebergs.”

* The Financial Services has launched an awareness campaign for borrowers who are worried about meeting mortgage repayments – 4 March 2008

** Protects against Accident, Sickness and Unemployment