However, I’ve been having a read of the Citizens’ Advice Bureau advice for getting through the credit crunch.  And it’s good.

So, here it is, then.

A Borrower’s Survival Guide to the Credit Crunch

1.  Get Talking, don’t sit and worry about your finances – talk to somebody about it!  You should be talking to:

• your lender
• your partner
• an independent debt advisor

2.  Get Advice, contact:

• Citizens Advice
• Shelter
• National Debtline
• Consumer Credit Counselling Service

3.  Plan. If you are coming to the end of a fixed-rate mortgage in the near future start planning ahead for higher repayments and researching the best deals in the market now.

4.  Don’t Ignore the Situation because it won’t go away unless you take action!

5.  Get Your Deb Priorities Right. Your mortgage is one of your priority debts – don’t pay it and you could lose the roof over your head.

6.  Pay What You Can Afford Each Month; f you can’t afford your full mortgage repayments, you should talk to your lender and still pay what you can afford.

7.  Open Those Brown Envelopes, and, if you are a tenant, open all mail that is addressed ‘to the occupiers’; this is how the mortgage lender will contact you if the landlord has a payment problem.

8.  Don’t Panic if You are Facing Repossession Proceedings, because this doesn’t automatically mean you are going to lose your home.  It is vital that you attend the court hearings. The court process acts as a final check to make sure repossession is the last resort. Some courts have advice desks which can provide last minute assistance.

9.  Don’t ‘Hand in the Keys’ and Walk Away, tempting as that might be.  Don’t do this without advice. You could still be responsible for the debt on the property and may be pursued for it years later.

Mortgage arrears and how to deal with them

If you have missed one or more of your mortgage repayments, then your mortgage is in arrears. Mortgages, second mortgages and mortgage arrears are all classified as priority debts. Because you can lose your home to repossession if you fall behind on mortgage repayments, it is important to understand how to deal with mortgage arrears.

The longer you let arrears build up, the worse your mortgage arrears situation will be. Seeking help early on, as soon as you become aware of trouble, will give you the best chance of repaying arrears and putting things right.

Top tips for dealing effectively with mortgages in arrears:

•    Contact your mortgage lender immediately and start negotiations. They will be keen to help and should be able to offer a choice of solutions

•    Put yourself in a position of power by getting an independent view; check the facts with Citizens’ Advice and get an independent financial advisor on the case

•    Search the internet for up to the minute news, views and advice

•    Pay something every month towards your mortgage repayments, no matter how small. This will put you in a strong position and show that you are ready and willing to do youR part towards solving the problem

•    Ask your lender if they have a rescue scheme. Some will offer to buy back your home or a percentage of it, leaving you a tenant or part-owner. Some housing associations also offer rescue schemes

•    Make a detailed list of income and expenditure in preparation. Your mortgage lender will use your personal budget to help them decide how to support you in paying back your mortgage repayment arrears

•    Births, deaths, divorces and unemployment can all lead to less income. Always tell your mortgage provider if your circumstances change and you run into mortgage arrears

•    Tell your lender if the property is worth much more than your mortgage. They might let you pay off your mortgage arrears over a longer time period

•    Check your insurance policies to see if you’re covered in any way against losing your home. For example, do you have a mortgage payment protection policy?

•    Visit the Department for Work and Pensions website and make sure you have all the facts straight about benefits. You, your partner and children could be eligible for Working Tax Credit or Income Support top-up, or disability benefits: dwp.gov.uk

For government advice about mortgage arrears: Direct.gov.uk

Buy-to-let mortgages are at a greater risk of repossession than owner-occupier mortgages.

According to a recent Standard and Poor’s report the risk of house repossession through the buy-to-let market has increased dramatically due to declining property prices and the reduction in mortgage products.

The report has estimated that approximately 20% to 40% of buy-to-let borrowers may fall into negative equity by Q2 2009.

When you compare this figure to the market as a whole at 14% to 20% it becomes apparent how deep this issue could become for the sector. Of course this large percentage is built on the fact that many buy-to-let mortgages were taken out at 90% or more LTV (loan to value) ratios, some over 100%.

In addition to this, many buy-to-let residential properties were new build flats with little scarcity when purchased. Today new-build flats compete directly with similar new builds left and right which are vacant. Meanwhile construction firms bend over backwards to sell remaining stock.

The report helps to outline fundamental property issues which are reflected in pure economic theory, supply and demand and the value of scarcity. When you have new build flats all built on top of each other in a cookie cutter format they offer no unique selling point (USP) and crucially… no land and no scarcity. You could buy any number of flats in a given area and developers can make more money whilst flooding the supply with each and every floor they build skywards. The summation theory of valuation equates market value as Land + Building = Market Value. Over time the scarcity is within the land, not the building, the building depreciates and can simply be replaced by bricks and mortar, (just as a car depreciates) the land is the part of the asset to rise in value due to inherent scarcity.

Back to report however which based its analysis of around 200,000 securitised buy-to-let loans – representing around 20% of the buy-to-let market – buy-to-let arrears were 3.7% at the end of June, compared with 2.9% of arrears in a sample of prime owner-occupied mortgages.

Kate Livesey, surveillance credit analyst at Standard & Poor’s, said: “While older buy-to-let mortgages outperform similar loans made to prime owner-occupiers, newer buy-to-let mortgages are now underperforming, given looser initial underwriting standards and lower absolute growth in rental coverage since origination.” The rental part of the equation is also an issue, new build buy-to-lets compete directly for tenants with owners of the flats to their left, right upstairs and downstairs. Flats with land compete with only those with land, which there are far fewer of and therefore, due to scarcity perform better on average.

Livesey said that this makes performance of the buy-to-let sector more sensitive to the currently difficult credit environment: “In a downturn we believe that the current stock of buy-to-let loans will carry higher credit risk than the stock of loans to prime owner-occupiers.”

PropertyHawk.co.uk – Has the latest UK mortgage rates.