In recent years as many as 4 out of 10 mortgages have been taken out on an “interest only” basis. Many of these borrowers expected that assumed growth in house prices would help them pay off their loans – but something went wrong. Instead of house prices increasing they went into reverse. Over the last two years many properties have lost as much as 25% of their pre credit crunch value.

The Financial Services Authority (FSA) has estimated that as many as 4.2 million borrowers have to face the possibility that their interest only mortgage could mean that they’ll not be able to move for some years to come as the sales proceeds from their home would not leave them with sufficient to fund the deposit for their next home. Indeed, some would be left still owing money to their lender after selling their home due to negative equity.

To make the situation even worse, as unemployment has risen, it is inevitable that some of these borrowers will have become unemployed or have been forced to take new employment on lower wages.

At the moment many mortgage advisers are advising clients to switch from interest only deals to conventional repayment mortgages. But if they cannot afford to do this they should either over pay on their current mortgage or start up a regular saving plan.

If you are caught in this “interest only” basis then please do not ignore the problem. It’s a ticking time bomb.

Economists say that the average age of a first time buyer who isn’t receiving financial help from their parents is 37 compared to 31 for those who are lucky enough to get help from Mum and Dad.

This is not surprising bearing in mind that the latest figure from the Council of Mortgage Lenders shows that the average deposit for a first time buyer has increased from £13,194 in September 2007 to £31,875 now.

And even when a buyer has their offer accepted, the problems don’t stop. Despite recent increases in sale prices, surveyors are still down grading house values and frequently the value they attach to the house for lending purposes is lower than the agreed sale price.

The Halifax has reported that house prices grew by 1.5% during the summer but the price of flats and maisonettes popular amongst first time buyers grew by nearer 2.5%. This is due to a shortage of affordable properties suitable for first time buyers.

The figures also show the affect of the lenders tightening up on lending multiples combined with lower prices post credit crunch. The average advance to first time buyers has fallen from £118,750 to £95,625.

All this is not good news for the property market. A healthy property market relies on all sectors of the market being buoyant.

Millions of people in overdraft will see their overdraft charges cut. The Halifax, with more than 5 million customers with current accounts, ha instead introduced a daily penalty of £5 if you go into the red. The bank previously charged £35 for a refused payment due to insufficient funds, £35 for authorised transactions whilst in the red, and £28 for using an unauthorised overdraft.

This all amounts to a month is £155 rather than £238 A DAY under Halifax’s previous charging arrangements.

The NatWest has announced that it was cutting the charges for a bounced cheque from £38 to just £5.

This all seems to have resulted from pressure from the Financial Services Authority although letters we have seen from banks imply that it is simply as a result of a “long-term review”.

No matter what the truth, it is a fact that banks need to be more transparent in their charging and customers need to be given a fairer deal.

Building Societies are beginning to introduce some cheap mortgage deals – but you’ll have to get up early to bag one.

The Newcastle B. S. and the Coventry have stolen a march on their competitors by launching some fantastic rates but there are signs that the Newcastle could their deals very soon and the Coventry withdrew theirs after just seven days,

The basic problem is that the building societies are unable to borrow in the money markets and all their mortgage lending have to be funded by investors savings and mortgage repayments from their clients. So if their deals turn out to be very popular, the money runs out in a flash.

And first time buyers still shouldn’t get too excited either. They may be the first to get out of bed and queue at the building society, but all these deals still require a deposit of at least 20% and a near perfect credit history.

The credit crunch remains with us.

Just imagine. You’ve been to the show house, fallen in love with the housing development and signed up to buy a house off plan for £500,000 and paid the 10% deposit. The only problem you may have thought was that you’d have to wait 12 months to move in.

Ten months later the letter arrives to say that the house will be ready in 8 weeks. But things have changed. House prices have fallen and the building society values the house at £425,000 and, as business is not so good, your income has fallen too.

What do you think the building society will say? Yes, you guessed it – no mortgage! But you have signed a contract to pay the balance of £450,000 for your new home and the builder wants his money and you’ve signed a legal contract to pay.

This sort of situation does happen. Berkeley Homes is in the process of taking an unknown number of it’s clients to court to recover the money they are owed.

So please be very cautious if you are tempted to buy a home off plan especially if you are having to raise a hefty mortgage to complete the deal. And also be aware that, despite the recent upswing in house prices, some commentators are still forecasting that house prices will go into reverse again next year.

Please be careful.

A court case has revealed that Mohammed Patel aged 24, took commissions from car owners to stage accidents in their cars, thereby enabling them to file inflated insurance claims.

Many motorists driving behind Patel were put at risk when he would suddenly apply his brakes at roundabouts causing the following car to slam into him. He tended to select lone elderly drivers as he believed they would cause less fuss.

To assist his scam, he would often disengage the brake lights on the car he was driving so that the “victim” would have no warning of impending danger and would be more prepared to think themselves at fault.

The owners of the cars Patel drove then claimed there were several people in the car who suffered whiplash injuries and the damage to the car was exaggerated. The court heard that around £17,000 was claimed for each accident and Patel admitted to 93 staged accidents - but in practice there were more.

So if you are involved in a similar accident or are suspicious about any accident you are involved in, inform your insurers and they will investigate and, if necessary, get the police involved.

In the last six months we have witnessed a dramatic change in mortgage choices. In May this year 8 out of 10 new borrowers chose a fixed rate mortgage with the remainder opting for a tracker or discounted mortgage.

Yet just six months later consumer choices have totally changed. Last month 8 out of 10 new borrowers selected trackers or discounts and just 2 went for a fix.

This has all come about because general financial opinion thinks that low interest rates are here for a few years as the British economy claws itself out of recession. Everyone knows that the Bank of England’s Base rate cannot remain at 0.5% for ever – it will rise – but expectation now has those increases pencilled in for a few years hence (probably up to 2011).

So will those borrowers who locked into fixed rates at under 4% for 5 years back in April and May, be the eventual winners? Let me have your views.

Those homeowners paying a variable rate mortgage need to keep an eye on their monthly repayments because some lenders are increasing their standard variable interest rates (SVR).

For example, Accord which is part of the Yorkshire Building Society has recently increased its SVR by 0.65% to 5.99%. This follows a number of rate increases by the Cambridge, Scottish and Ipswich building societies. Other mortgage lenders are expected to follow suit.

More people are now paying SVR’s after completing their fixed rate deals as the new tracker and fixed rates available are often to expensive. But there can be a big gap between the best and worst SVR’s. The nationwide is currently holding their SVR at 2.5% for existing borrowers although it is 3.99% for new borrowers.

The average SVR over 15 of the largest lenders is 4.8%. This means that a mortgage of £150,000 over 20 years at this average SVR would cost £973.

Yes, on the quiet the Post office has moved into mortgages. You should now be able to find details of their mortgage products in every Post Office whilst mortgage advisers are on hand to assist with applications in 250 of the largest Post Offices.

They have ten varying mortgage deals varying from 5 year fixed rates to “life of loan trackers”.

They charge a fixed application fee of £599 on every mortgage application including buy-to-let mortgages. However, you must have at least a 20% deposit to apply for any of their mortgage products.