Homeowners should take steps to safeguard their financial futures, it has been suggested.

Moneysupermarket reveals that as the credit crunch continues to take hold of the country, consumers could find themselves at risk of falling behind with mortgage repayments as the level of property repossessions and redundancies continue to increase. As such, taking out a sufficient mortgage protection insurance policy was recommended.

The price comparison site pointed out that a 38-year-old homeowner paying some 850 pounds towards their mortgage each month would be able to take out insurance covering them in the event of accident, sickness and unemployment for just over 21 pounds per month.

However, for those homeowners who do not have insurance, or lack an adequate policy, they may find that they are unable tomake mortgage repayments and consequently develop arrears. This could extend to people encountering problems in meeting demands for payment on personal loans and credit cards, repaying utility and council tax bills and having enough money for grocery shopping.

Meanwhile, citing research by Citizens Advice, moneysupermarket revealed that mortgage arrears rose by 35 per cent over the course of this year. Some 14 per cent of these cases were attributed to illness among homeowners, with 13 per cent being due to unemployment. As such it was claimed that this total figure of 27 per cent of occurrences of mortgage arrears could have been avoided if sufficient insurance had been put into place.

Commenting on the figures, Louise Cuming, head of protection for moneysupermarket, said: “With news of mortgage arrears, repossessions and redundancies widespread, insuring your mortgage against unforeseen circumstances such as unemployment or long-term illness is essential. As we’re currently seeing mortgage rates and other day-to-day costs soaring, I’d advise people to think of mortgage insurance as any other household bill - it may prove a crucial addition to your finances and, even more significantly, prevent you from potentially losing your home.”

Ms Cuming went on to report that it is vital that homeowners take the time to shop around so that they can get the right insurance policy that suits their specific needs. She added that as getting such financial products can be a complicated process it may also be advisable for consumers to seek out professional guidance. Furthermore, the moneysupermarket expert stated that consumers should make sure they read all the terms and conditions to a mortgage insurance contract before signing. It was pointed out that some medical conditions, such as stress and back problems, might not be covered by some insurance policies.

As the credit crunch continues to make its impact felt over the course of 2008, those concerned about their ability to manage mortgage repayments and other kinds of financial demand might wish to consider getting a loan. In taking out a cheap loan, borrowers may be able to meet various spending commitments quickly and easily. Furthermore, the additional assistance that a loan provides could help consumers to take out a sufficient mortgage protection policy. This could also be of assistance to people looking to supplement their spending as the financial climate worsens. A recent study by the Motley Fool showed that 89 per cent of Britons are looking to cut back their expenditure on non-essential items due to predicted problems in the monetary markets.

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