Homeowners could be unable to make mortgage payments in credit crunch

It is hard to miss the almost daily woe of credit crunch doom and gloom around mortgage payments and domestic income. Financial protection becomes a pressing issue when you scratch beneath the surface and realise there is real concern about how close many ordinary people could be to financial disaster.

In the boom years, when the economy was growing steadily and borrowing was cheap and positively encouraged, people may have become used to spending on credit and seeing a healthy outlook on their property values, with no problems with making their mortgage payments. Now that a serious downturn has arrived, it's not just anecdotal evidence that points to struggling homeowners across the UK. People are vulnerable if their circumstances change because higher interest rates on their mortgage mean a larger slice of their income is being swallowed up by their outgoings. If this wasn't bad enough, oil prices and basic commodities have also shot up, in what could be a perfect storm for people's financial health.

At the heart of the issue is the general downturn in the economy has already led to many lay offs, particularly in the construction industry but the knock-on effects reach jobs in many sectors. Unemployment mortgage protection is one provision that can reduce the blow but redundancy is a serious issue that can place enormous pressure on indidivuals and families. If people's savings cannot sustain them after a redundancy it can cause a real problem, as this article in the Daily Mail explains, the average Brit could be just days away from financial ruin if they had to survive without an income: "http://www.dailymail.co.uk/news/article-1038445/Why-millions-people-just-11-days-financial-ruin.html?ref=patrick.net