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Mortgage brokers say it is important to stress-test finances to ensure you can continue to meet your home loan repayments, regardless of economic circumstances. The tips below should help.

? Increase your monthly mortgage payment: If you can raise your payment now, it will lessen the impact of future rate rises. This ensures that more of your capital is paid off. Not only will this reduce the length of your mortgage (reducing overall interest charges), but it could improve your equity position when you remortgage.

Most lenders should allow you to do this without penalty, but check that you will not incur a fee. Alternatively, you can use a lump sum to pay off a proportion of your mortgage. Most lenders allow you to pay off 10pc of the balance without redemption penalties (this may not be possible in a fixed-rate or other introductory deal).

? Start saving: In mathematical terms it makes sense to use any spare cash to pay off some of your mortgage rather than save in the bank, because banks will charge you far more on a loan than they pay on your savings. But you might want to build a nest egg instead.

This gives you more flexibility, particularly if you are worried about losing your job. "Borrowing back" money you've overpaid on your mortgage can be expensive, unless you have a flexible or offset deal, and even with a flexible deal you may not be able to access as much money as you expected if your circumstances have changed. If you build a savings cushion you could use it to pay higher mortgage costs.

? Move to a fixed-rate mortgage: For many people, now could be an optimum time to move to a fixed-rate deal. The price of these mortgages has come down considerably. The best deals remain reserved for those with at least 40pc equity in their home, but even people looking to borrow 75pc of a property's value have more choice and better-priced deals. Those who opt for a fixed rate have the peace of mind that regardless of what happens to the economy or interest rates their mortgage payments will stay the same.

? Look at "drop lock" deals: These are sometimes called "switch to fix" mortgages and give home owners the right to move out of a tracker or variable-rate deal on to a fixed-rate at any time.

People might think this gives them the best of both worlds: a cheaper variable rate for now but the option to move on to a fix as and when rates rise. Remember though that, when you do move, the fixed-rate deals may be considerably more expensive than they are now. It isn't inconceivable that if a bank saw huge numbers of customers switching it would put its prices up. Home owners also have to pay an arrangement fee to move.

Capped mortgages offer a similar flexibility – giving borrowers a variable rate that will increase, but only up to a certain point.

? Talk to your lender: If you don't have sufficient equity in your home, talk to your mortgage provider. Some, such as Nationwide Building Society and Halifax, offer deals solely for existing borrowers, even those in negative equity. These will not be as competitively priced as the best-buy deals, but may offer security via a fix or enable those stuck on mortgage deals to move home.

? Take out insurance: Those worried about rate rises can buy insurance. MarketGuard offers a two-year policy called RateGuard. Home owners pay a monthly premium and the policy will pay out if rates rise by more than 1 percentage point. There are other derivative-based products sold by companies such as John Charcol that offer cover for longer periods, but these are aimed at wealthier, professional buy-to-let investors who have to meet income criteria.

As with any insurance, there is a risk that you pay the premiums but never claim. As RateGuard is only a two-year plan there is the chance that rates won't start to move significantly until the end of the policy. Prices start at ￡30 a month for a ￡100,000 mortgage.

? Change your mortgage terms: Anyone having trouble paying their mortgage should contact their lender. It may be able to offer short-term measures to ease the burden. These could include switching to an interest-only mortgage, extending the term or taking a payment holiday (this may only be possible if you have previously made overpayments). While these measures are likely to increase the cost of your mortgage overall (you will be paying interest for longer), they can help reduce payments in the short term.

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An increase of 2 percentage points interest rates could push the cost of a ?150, 000 mortgage interest only ?250 per month photo: GETTY

With mortgage rates set to follow, this could have disastrous consequences for 7 m homeowners who currently have variable rate mortgages.

According to the Council of mortgage lenders (CML), houses approximately 2.9 m owners have mortgages that are no longer considered "affordable" in accordance with the guidelines set out by the city watchdog, the Financial Services Authority.

Although increases in more modest rate (between 1 and 2 percentage points), about 1.6 m mortgage would be deemed "expensive" in accordance with the guidelines of the FSA.

An increase of 2 percentage points interest rates could push the cost of a mortgage interest only ￡ 150,000 by ￡ 250 per month.

The usual advice for those concerned about increases in rates is to pass a fixed rate agreement where the mortgage payment is guaranteed not pass for a specified period - usually two or five years. But with prices real estate sliding downwards, some owners will find difficult to secure of these transactions, because they are not enough equity in their homes.

The cheapest fixed rate agreements are currently available only to those who have at least the 40pc in their home equity. Those who have less 10pc equity are unlikely to remortgage to all the.

According to the CMA, mortgage half million were granted to homeowners with less than a deposition of 10pc since the beginning of 2007. Given that prices have declined since then, it is likely that many more owners now have less 10pc of equity in their home, so will struggle to remortgage.

It is feared that a storm of higher rates of interest, widespread in the public sector job cuts and house prices could lead to an increase of possession next year, as some families are unable to meet mortgage repayments but unable to remortgage or downsize to erase their debts.

Mark Harris, Director of Savills, mortgage broker, said owners should reassess the mortgage options. "It is now much more choice and better value on the mortgage market, particularly for those wishing to obtain an agreement for five years," he said. "Those waiting may find that they have less options a few months on the line. Not only the price of fixed rate pourrait traffic rising, but if you have less equity in your House to fall in price you may not be able to obtain the most competitive rates. ?

Melanie well, a soldier, finance broker, Director said: "even if no one knows with certainty when interest rates rise, the reality is that it will take place at one time so a wise borrower should be prepared." Examine your own circumstances: if rates rise, could allow you mortgage? If not, then you should consider a fixed rate. It is unlikely to get any cheaper; Indeed, like a rate increase seems more likely fixes will become more expensive.

"If you enjoy a good market SVR [standard variable rate] you can always reserve a fixed rate to move on the future". Some lenders will allow you to book a rate for up to six months before you commit actually there.

"If you have a high LTV loan [value], it is therefore difficult to remortgaging, talk to your lender. Many have special arrangements available for existing customers. "These, she says, cannot be as competitive as the current"best buys"but will at least provide peace of mind that monthly payments will be corrected.

A spokesman for the CMA said affordability the FSA tests were "a theoretical test" and many people who breach these guidelines in practice still would be able to repay their mortgage.

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Fix Santander 2 65pc two years. Up to ￡ 1,995 fresh 60pc LTV (LTV ready = value; 60pc LTV means filing 40pc)

2 85Pc two-year correction Hanley economic Building Society. Up to LTV fresh 75pc of ￡ 449

Yorkshire Building Society 5 29pc two years LTV 90pc correction. fee of ￡ 495

Correction of a 3 89pc five First Direct. Up to LTV fresh 65pc of ￡ 99

Skipton Building Society 5 78pc five correction. Up to LTV fresh 90pc of ￡ 995

Source: Private finance

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By Matthew Goldstein and Rachelle Younglai Matthew Goldstein And Rachelle Younglai – Fri?Dec?17, 5:22?pm?ET

NEW YORK/WASHINGTON (Reuters) – Securities regulators have broadened their inquiry into the mortgage industry, asking big banks about the early stages of securitizing home loans, two sources familiar with the probe said.

The Securities and Exchange Commission launched the new phase of its investigation by sending out a fresh round of subpoenas last week to big banks including Bank of America Corp, Citigroup Inc, JPMorgan Chase & Co, Goldman Sachs Group Inc and Wells Fargo & Co, the sources said.

Months ago, the SEC began looking into the banks' foreclosure practices following allegations that mortgage servicers were using shoddy paperwork to evict delinquent borrowers from their homes.

Now the SEC is looking at how the lenders packaged up mortgages for sale to investors, said the sources, who requested anonymity because the probe is not public.

Questions from the SEC include information about the role of so-called "master servicers" -- specialized firms that oversee the selection and maintenance of the large pool of home loans that go into every mortgage-backed bond.

In many cases, Wall Street banks that underwrite mortgage-backed securities either own their own master servicing firms or are closely aligned with one.

The Justice Department, banking regulators and the attorneys general in all 50 U.S. states are also probing potential wrongdoing.

The state of Arizona sued Bank of America on Friday, accusing the bank of misleading consumers about its home loan modification process.

TRUSTS AND TRANSFERS

One of the sources said the SEC is seeking information about the role banks had in mortgage securitization. The regulator is also looking at the role trustees for the trusts that issued the mortgage-backed securities had in monitoring the performance of the underlying loans.

The SEC is looking at whether loans were properly transferred to the trusts that issued the securities, the source said.

The renewed look at the securitization process is an extension of the SEC's preliminary probe into the mortgage mess. The SEC's regional offices are all looking at some aspect of the foreclosure crisis.

The SEC had no comment.

Separately, the SEC is still investigating banks, credit rating agencies and individuals in connection with the 2007-09 subprime crisis. Those investigations center around potential misrepresentations to investors about the value of the mortgage-backed securities that helped fuel the crisis.

The agency has filed some high-profile cases, including one against former Countrywide Financial chief Angelo Mozilo and another against Goldman Sachs.

Banking regulators, including the Federal Reserve, are reviewing lenders' foreclosure practices and are expected to reveal their findings in January.

In particular, the Fed is concerned about investors accusing lenders of misrepresenting the loans that underpin mortgage securities, and demanding repayment.

That has already happened with Bank of America, which has started negotiating with a group of angry mortgage investors, including BlackRock Inc.

Bank of America, Citigroup, JPMorgan and Goldman had no comment. Wells Fargo said it is "always working with regulators and others who are interested in its servicing business" but declined to comment on whether the bank had received a subpoena.

(Additional reporting by Elinor Comlay and Joe Rauch; editing by John Wallace and Tim Dobbyn)

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Paragon, which was reopened for the new company once, for the first time in three years in September, said a profit before tax for its last fiscal year of ￡ 71. 8 m, against ￡ 54. 3 m in 2009.

Profit increase was led by a continuous fall in lower impairment on the back of the arrears as well as gains on redemption of the debt of the company.

Nigel Terrington, Chief Executive, said the lender "excellent progress" and welcomed company securing ￡ 200 m of funding that allowed him to begin to make new mortgages.

"We fully expect that our new loan program will expand over time and will be complemented by increasing opportunities to acquire portfolios of loans and make new contracts for maintenance, says Mr. Terrington.".

Paragon has yet to make a new loan since the reopening of the new company, but Mr. Terrington said the company had received a lot of interest for mortgage brokers and complement soon on its first loan since late 2007.

Mr. Terrington expects to sell its first new securitization since the financial crisis next year agreement Paragon and said he thought that it would be possible to issue a link worth approximately 250 million from ￡ mid-2011.

"I want to go back on the securitization market and I think it is better to do something rather than to maintain communication about the possibility of doing something," he said.

Paragon financial results beat analyst expectations and broker Arden partners increased its price target on the part of society and maintained its recommendation "buy" on the shares.

Shares of Paragon closed until almost 6pc results back to 169 p, valuing the company more than 500 m ￡ .the final dividend for the year was confirmed to 3.6% in place of 3.3 percent in 2009 and will be paid on February 14.

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Absence of buyers put pressure on House prices down.?Photo: ALAMY

Only 30,766 mortgages have been approved by major banks to people who buy a property for the month, the lowest level since March, 2009, when real estate prices have been declining, according to the British Bankers Association.

Mortgage total progress also dive to a low of 10 years, with only ￡ 7. 6bn lent, a level seen for the last time in February 2001.

NET loans, redemptions and refunds, gangs has increased slightly on the previous month to ￡ 1. 7bn, but was still lower than last year October 43pc.

The figures highlight the current state and mastered the activity on the housing market as buyers sit on their hands until the Outlook for the price of real estate and the impact of reductions in government spending becomes clearer.

Absence of buyers pressure downward on the price of real estate, with the approval of the mortgage for the purchase of House less than half the level of 70,000 to 80,000 per month which are regarded as compatible with a stable market.

Howard Archer, United Kingdom and European Chief Economist IHS Global Insight, said: "housing market activity remains stuck in the pot au Noir, which seems very likely continue the downward price pressure."

"Showing the mortgage approvals lower margins due to a minimum of 19 BBA data October month reinforces our belief that house prices will be trend down to lose their maximum concentrations 2010 10pc at the end of 2011."

There was a slight pick up in the number of people for months, remortgaging although 24,112, the figure was less than half the level seen before first struck by the credit crunch.

Guaranteed borrowings is also remained subdued as consumers continued to concentrate on repayment of debts.

People borrowed ￡ 5. 9bn in October, credit card but it was more that offset by payments of ￡ 6 credit card 05bn.Dette increased 258 million from ￡ once with interest and costs were taken into account.

Outstanding loan through loans and overdrafts contracted for the 15th consecutive month with refund of ￡ 345 million more people they have borrowed.

David Dooks, Director of statistics BBA, said: "activity of consumer credit and mortgage markets continues to be restrained in October reflecting uncertain prospects for households and lower consumer confidence.

Consumers is also increasing their economies by ￡ 3. 53bn in October, the highest level since March, when deposits tend to be stimulated by the late next tax year.

The amount of money people have put aside has increased by nearly 5mC in the past year.

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Matthew Wyles, President of the CMA said regulation proposed by the controller of the city would hurt more borrowers as they.

The Financial Services Authority on how much money, that a person can borrow evolved after the banks have been criticised for giving a larger loans to buyers who can afford not rules.

Mr. Wyles said the "layer on layer" additional requirements are building regulatory set "too large and unwieldy".

Speaking at the annual Conference of the CMA, he said: "I'm sure the FSA does not really exclude large crowds of market borrowers, or reduce capacity reasonable loan household responsible to meet their housing needs."

"And I am sure the FSA really believes that we are loading effects potentiels.Mais I can say with confidence that we're not crying loup.Nous do these points if we do not believe that they are true."

According to proposals of the FSA, the amount that a person could borrow might be restricted taking account of future interest rates are student and whether they can afford their monthly payments based on a refund instead of an agreement of interest only mortgage.

More than half of all mortgage loans taken out during the four years have not been accepted if affordability of the Financial Services Authority rules had been implemented, according to the CMA.

Added Wyles mortgage market felt like it was stuck in "Groundhog Day", and while the industry stood at the edge of a "financial abyss" by other means, little had changed in the two years.

Ready remains only a fraction of what they were in 2007, the year beat the credit crunch with the Group predicted that net loans, redemptions and refunds, bands will be only ￡ 9 billion this year, compared to 108 billion pounds in 2007.

Mortgages will remained "sober" he said as he released figures showing gross loans ￡ 12.4 billion, which is unchanged from September, but the 9% compared to October 2009.Il is total October lowest since 2000.

Brian Murphy, head of loans to mortgages, Council Office said: "in a market that operates normally you would expect to uplift overall activity between September and October on a plateau during the summer months .but this is not a normally functioning market."

"Borrowers are nerve, even more so since the expenditure review and confirmation of some half a million public sector job losses .this fear for their personal situation has certainly contributed to the decline in mortgage applications."

Try the tool search for free mortgage loan from the Telegraph

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At least 18,000 customers across two lenders, which belong to the National Bank of the Australia were invited to increase their direct debits amounts ranging from 25 ￡ ￡ 700 per month after a bank error leads to exempt them a total of 19 m ￡. Clients were outraged when Clydesdale and Yorkshire give them the ability to erase the underpayment full or increasing their monthly payments.

But now it appeared that some borrowers were able to get their insufficient struck their accounts to complain to the Ombudsman, arguing that both banks must bear the burden of their erreur.Malgré Ombudsman's finding in favour of these borrowers are complained, Clydesdale and Yorkshire refuse delete customers who have not been insufficient complaint in the hope that they will be fully reimbursed.

Ray Boulger John Charcol, mortgage broker, said: "" now that precedent has been set by the Ombudsman, it is difficult to believe Clydesdale will be still insist on push people to client rembourser.Les had a windfall due to the failure of the Clydesdale to calculate payments with précision.Ils will now have to pay appropriate amounts, but for those who claim their outstanding capital will be less than once refund was struck off the coast. ""

Yet the two banks are still trying to induce the majority of customers who have not yet claimed to renounce their right to full compensation by providing one-time cash incentives to agree to subscribe to a refund scheme to pay inadequate in full.

A Clydesdale client with an underpayment ￡ 4,000, who said in his monthly payments would be increased to ￡ 680 to 960 ￡ per month, offered cash of ￡ 800 if he agreed to do not apply to the ombudsman.Clydesdale, explains the increase 41pc payment he claimed he reflects the correct monthly payment and amount to eliminate the deficit caused by the previous insufficient.

Experts are urging Clydesdale and Yorkshire customers asked to repay underpaid money to consider making a complaint to the Financial Ombudsman service rather than to accept incentives cash.Leurs calls have been strengthened by the initial findings of the ombudsman of the borrowers who have ordered banks swallowing the insufficient instead of retrieving their customers.

The Ombudsman stressed that it was likely to find in favour of the client where it or it could have been expected know that they have been underpaying list.it cases where borrowers interviewed are required by the Bank and pay the lower amount of good faith, the Ombudsman said he would order the lender to deregister the lack of capital was at the time that the error was settled the.

But it will not grant compensation for future inconvenience of having to make payments accrues.Le Ombudsman explained that reduce remuneration proportionally where the borrower is partially responsible, for example where the borrower has discovered the difference and kept quiet about it or ought to have known that something call.

Some holders of mortgage Clydesdale and Yorkshire Bank argued that it was made more difficult for them to make their repayments were too low because mistakes banks comes at a time where the media was flooded with extremely good mortgage lending markets, reports caused by historically interest rates low.

At the time the insufficient discovered that banks said that they evil calculated monthly payments on mortgage loans clients due to an error built into their system by 2005.Cette error shows only up to a significant when degree drop rates or increases sharply.

This has led to allocate capital how has been repaid, leading banks to apply unless the required minimum monthly payment for customers erase their mortgages in the defined term.

Affected customers have variable rates and tracker loans hypothécaires.Deux third of affected individuals took out mortgages with Scotland Clydesdale.

Banks have apologised for the error, but say that about half of the customers who have been underpaying total suggested increase is approximately ￡ 25 per semaine.Jason Clarke, a spokesman for Clydesdale Bank and Yorkshire Bank, said: "we cannot comment on cases individuels.Je understand that only a small number of cases have gone to the ombudsman."

"In some cases the Ombudsman agreed with our position and others with the client.Chaque cases are different.

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Experts said that within five years the number of pensioners with mortgages would increase to more than one million photo: IAN JONES

There are already almost 250,000 persons over age 65 who are repaying loans hypothécaires.Chiffres revealed that an other homeowners approaching retirement million were not yet clear their mortgage debt.

Experts said that within five years, the number of pensioners with mortgages increase to more than one million.

The trend should lead to many retirees face financial difficulties they fought for the debts of the value the decline of their pension.Price shares and savings rates fell during the credit crisis, leaving many retirees without money to pay off their mortgages.

Ros Altmann, saga, Group CEO stated: "it will not take very long to get to a million pensioners with a mortgage."

"A large number of retirees rely on staffing policies or lump sums of their pensions to repay their debt hypothécaire.Mais these things were simply wrong.

Melanie good Private Finance, mortgage broker, said: "while most of us hope to pay off our mortgage for a long time before we retire, an increasing number of owners simply cannot allow."

"Instead of this, they are continuing with their mortgage to retirement, their bricks and mortar to raise money to live and to help their children and grandchildren with their own property bought."

The latest figures published by the Department of communities and local government, revealed that of 249,000 State pension age people had a loan of the maison.Un another 1,071,000 persons aged 55 to 64 years still had mortgage.

A study conducted by the Council of mortgage lenders has suggested that more than half of homeowners over 50 years, many who retired at the beginning - had terms of mortgage which extended beyond the age of 65, and that two-thirds stated their intention to remain in debt forever.

Charities worry retirees in debt, saying that they would be among the worst affected if interest rates have increased.

Malcolm Tyndall, a Director at Elizabeth Finn Care, said: "face more difficulties to workplace, retired naturally use up their economies, with many forced to rely on other methods of payment such as credit cards and loans interest élevé.Si interest rates increased causing higher mortgage payments, elderly people will suffer disproportionately.".

"There is a preconceived image is the age of working people are falling into debt, but we see that more people in their years later falling debt which are often reluctant to ask for help because of the stigma it."

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Bank of America have slipped 4 4pc after a CNBC report seeking to a consortium of eight investment firms, including PIMCO, BlackRock and the Federal Reserve Bank of New York, for to buy packaged loans in $47bn bonds.

"Wall Street is measure in real time of the crisis in mortgages, lenders loan loss" Chad Morganlander, an official money at Stifel, Nicolaus, says Bloomberg. " This additional overhang housing debacle goes to maintain financial stocks at Bay for a long period of time.?

BoA, largest in the country by assets, Bank also posted a quarterly loss United $ 7 due to changes in legislation in debit card transaction fees.

? FTSE 100 report

Blue-chip Dow Jones Industrial Average has dropped from 165.07 points, or 1. 48pc close 10,978.62 points on Tuesday, while the broader S & P 500 index lost 18.81 points, or 1. 59pc 1,165.90 points.

Rich technology Nasdaq composite index shed 43.71 points, or 1 76pc 2,436.95 points, as Apple is 2 7pc on earnings as forecast estimate and IBM dropped 3 4pc due to a decline in new contracts.

"U.s. stocks remain solidly lower technology sector provides the lion's share of the burden on equity markets", analysts of Charles Schwab told AFP.

"Interest rate first hike in China since 2007 is also the cause of a sense of discomfort and materials are some pressure, exacerbated by a strong advance in the U.S. dollar, which is weighing on denominated products."

Losses followed the decision of the Central Bank China to increase interest rates for the first time in nearly three years in efforts to curb inflation and real estate boom.

Bank of China said that it will be Wednesday increase loan Yuan a year to 5 5 31pc 56pc and yuan year drops 2 5pc 2 25pc rates.

Increasing verging on the global currency market and comes in advance of key data this week expected to show growth in the second world economy continued to slow in the third trimestre.Dans NY end trade, the pound sterling was extracted $1.5704 down from $1.5878 Monday.

Advance the dollar hit market commodities such as gold tumbled $31 $1,338 per ounce, wiping out the week gains dernière.Les oil prices fell too with Brent Crude for December delivery 4 10pc sliding to $81.10.

Shortly after the markets closed, Yahoo! said that net income has more than doubled in the third quarter of $396.1 m and revenues have increased 2pc to.$ 6bn.

The search engine giant said it expected revenue making $ 1 to. 53bn $1 in the current quarter.

The bond market has slightly augmenté.Le performance on the obligations of the US Treasury slipped 2 48pc 2 49pc Monday, while on the binding of 30 years of 10 years decreased from 3 3 93pc 90pc.

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