How to cope with recession

MORTGAGES AND REPOSSESSION

As unemployment rises, and people struggle to meet their mortgage repayments, the number of repossessions is expected to increase.

The Council of Mortgage Lenders (CML) has said the number of households more than three months behind with their repayments would reach 500,000 by the end of 2009 - more than twice the 2008 figure.

Contact a lender immediately if facing trouble making mortgage repayments, preferably with a detailed proposal on what you can afford to pay.

Repossessions have risen in 2009

Lenders must only turn to repossession as a last resort, after considering repayment holidays or extending the term or type of mortgage.

The government has announced a string of initiatives to try and keep people in their homes.

These include a scheme that sees not-for-profit housing associations buying homes from vulnerable people struggling to pay their mortgage and then allow them to continue living there.

The schemes differ, depending on whether you live in England, Scotland or Wales . Northern Ireland has launched a consultation document on a similar initiative.

The Income Support for Mortgage Interest (ISMI) scheme has been expanded, meaning that the time before homeowners who lose their jobs receive financial help with the interest payments on their mortgage has been cut from 39 weeks to 13 weeks.

Another initiative, the Homeowner Mortgage Support Scheme, allows households that see their income fall unexpectedly to defer part of their payments for up to two years.

For first-time buyers and those remortgaging, make sure you choose the correct mortgage to suit your financial situation.

For further advice, start with some typical advice about avoiding repossession in England and Wales . Homeowners in Scotland have slightly different rules to be aware of. You can also read readers' stories.

Housing charity Shelter offers advice to householders in England and, because of different rules, separate advice for homeowners in Scotland.

To see advice from mortgage providers, check this Council of Mortgage Lenders' guide.

To find the level of mortgage to suit you, use the BBC mortgage calculator to help guide you.

There are also strategies for businesses giving them the opportunity to strengthen their position.