Posts Tagged ‘finance’

Consolidation loan could prove beneficial for many in debt

Tuesday, June 29th, 2010

Being heavily in debt is something that many people are having to cope with, and over the past couple of years, with the recession and the financial crisis taking their toll, many have found themselves getting deeper and deeper into debt. A lot of people that have accrued debt over the years have a range of different debts that they are paying off, such as credit cards, store cards, loans, and overdrafts.

Often these debts can carry very high rates of interest, and this means that consumers can end up paying a fortune for their borrowing over the term of the loans and cards. In addition to this, having a range of different debts to deal with can prove to be difficult and inconvenient because it means having to make repayments to a number of different creditors each month.

Many officials believe that some people that have a range of different debts could benefit from consolidating these debts into one convenient, lower interest loan, and this is something that they can do with a consolidation loan. A number of lenders offer consolidation loans, and depending on the credit rating of the applicant the rate of interest charges can be very reasonable compared to the rates charges on most credit and store cards.

Borrowers can benefit from consolidation in a number of ways. Consolidating a range of higher interest debts into one lower interest loan can really cut the amount of interest that the borrower pays overall, and it can also reduce monthly outgoings as the repayment on the consolidation loan may be lower than the combined repayments on the individual debts. In addition to this borrowers will not have to worry about making different repayments to different creditors, and will only have to deal with one lender.

Tags: debt consolidation, finance, debt, loan

Posted in Loan News | No Comments »

Consumers cautioned about debt as credit card availability increases

Saturday, June 26th, 2010

Consumers in the UK have been warned by a debt management and advice group about getting into debt as a result of the number of credit cards in the UK increasing. Figures have shown that there has been a sharp increase in the number of 0 percent purchase credit cards available, and there are concerns that this could lead to more people getting into debt.

Officials believe that the more relaxed lending criteria by lenders could also contribute to more people getting credit cards and then finding themselves in unmanageable levels of debt. This time last year there were only two credit cards that were offering 0 percent interest of more than ten months on purchases, but this has now increased to eleven such cards.

Whilst eleven may not sound like a huge number it does reflect an increase of around four hundred and fifty percent compared to last year, and with rules relating to lending becoming more relaxed there are concerns that more people could find themselves getting into credit card debt.

Officials believe that competition has returned to the credit card market, and once again lenders are vying for business from consumers, although not to the same level as they were several years ago before the financial meltdown. This could lead to more people applying for these cards, and eventually could lead to greater levels of debt of people are then unable to meet repayments.

However, whilst the debt company was concerned about debt levels officials from the firm also said that these 0 percent interest purchase credit cards could be useful if used properly.

The debt company stated: “If used properly, the 0% purchase deals for extended months is still a viable option for many consumers. However, it is important to stay within your limits and pay off the difference by the final month, otherwise you could be in for an unpleasant surprise in the form of increased interest rates.”

Tags: finance, Credit card, debt, credit

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Can first time buyers get an affordable mortgage?

Saturday, June 26th, 2010

Over the past couple of years there is no doubt that things have been very difficult for first time buyers, and for many their dreams of homeownership have been dashed due to high deposit demands, stricter lending criteria, and higher interest rates charged to certain groups such as first time buyers.

However, although there have been extreme difficulties over the past couple of years when it comes to purchasing a home as a first time buyers the market is said to have eased up over the past couple of months, and this could mean that first time buyers won’t have such a tough time getting the mortgage that they need.

So, is it actually easier now for first time buyers to get a mortgage than it was say twelve months ago? Well, in actual fact the mortgage market has eased up to some degree, and there are now more mortgages available that are suited to first time buyers and even aimed at first time buyers, which is great news for those that want to get onto the property ladder.

However, things are nowhere near as easy as they were in the past. Just a few years ago first time buyers could get mortgages for 100 percent of the property and even for 125 percent of the property value, but this has now all changed. These days first time buyers would be lucky to find a mortgage for 95 percent of the property value, which just a few years ago was the norm.

The number of lenders offering 90 percent mortgages for first time buyers has increased, and this is good news for those hoping to get onto the property ladder as it means having to raise less of a deposit, although buyers may still have to stump up a substantial amount to be able to put down the necessary deposit, which can be a problem given that first time buyers have no previous property from which to take equity.

Another thing that could stand between potential first time buyers and home ownership is the fact that property prices are still quite high, and therefore many cannot get the level of mortgage that they need. A way around this is to look at scheme such as shared ownership or Homebuy Direct, which are schemes that make it easier and more affordable for first time buyers to get onto the property ladder.

Tags: finance, Mortgage loan, mortgage, Property ladder, first time buyer

Posted in Featured Articles, Mortgage News | No Comments »

Government takes steps to protect struggling homeowners

Friday, June 25th, 2010

The government has taken steps to try and protect struggling homeowners in the difficult financial climate by bringing in a range of new measures that will prove additional safeguards for those that could otherwise be at risk of losing their homes.

The UK’s financial regulator has decided to make all mortgage advisors personally responsible and accountable through the introduction of new rules and regulations that will apply to companies that deal with consumers that are behind on their mortgage repayments.

The FSA started a review of the mortgage market in the autumn of last year, and has now said that all mortgage sale firms and employees will have to be FSA approved. In addition to providing additional protection for those that are behind with their mortgage repayments the regulator is also looking to increase protection for those that decide to sell and rent back their homes.

Sale and rent back scheme shave become increasingly popular over recent years, with homeowners desperately trying to find a way of being able to stay in their home before they are repossessed due to mortgage arrears. Through these schemes they can sell the home and then rent it back from the company, but there have been many problems including the companies evicting the former homeowners shortly after taking the property from them.

Under new regulations companies that buy homes to rent back to former homeowners will have to give them tenure of at least five years. According to reports these, and other new protective measures, will come into play at the end of June.

An FSA official said: “Sale and rent back is often used by those who want to sell in a hurry to stay in their home, and so it is vital that they are better protected during what is usually a difficult period financially. We also think it is wrong that arrears charges should be taken from customers already in difficult circumstances.”  

Tags: FSA, finance, mortgage, sale and rent back

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Debt worries for private tenants

Friday, June 25th, 2010

Recent reports have suggested that debt worries may be increasing for private tenants in the UK, with reports of large increases in the number of private tenants seeking advice with regards to their debts. The data comes from the Consumer Credit Counselling Service, which claims that the level of enquiries regarding personal debt has increased.

The CCCS said that the number of debt related enquiries from those that are privately renting as well as those in social and council rented properties has been rising as a result of many of these renters being unable to keep on top of their repayments. The charity said that previously many enquiries had been from people that were homeowners and worried about losing their homes, but now this had switched to many of the enquiries being from those that were renting.

The CCCS is now concerned that there could be an increase in homelessness as a result of renters struggling with their finances. Those that fall behind on their rent as a result of their financial situations could quickly find themselves being evicted. The CCCS is urging renters to ensure that they always make payments on their rent before they worry about non-priority debts.

The charity also said that things could get worse for those that are on housing benefits, as the new coalition government has cut benefits including housing benefits, which could increase the difficulties that are facing many renters.

An official from the Consumer Credit Counselling Service said: “While we have always had more people in rented accommodation calling for help with their debts, they have usually been able to maintain their rent payments. This suggests that the personal finance situation for those in rented accommodation is deteriorating to the extent that they many end up homeless.”

Tags: finance, Consumer Credit Counselling Service, debt, credit

Posted in Debt News | No Comments »

Average fixed mortgage rates fall to seven year low

Monday, June 21st, 2010

The average rate of interest on a two year fixed rate mortgage has fallen to its lowest level in seven years, according to market data. Reports have shown that the average rate of interest charged on a two year fixed rate mortgage has now fallen to just 4.52 percent, which is the lowest it has been since September of 2003 when it fell to just 4.51 percent.

With lenders trying to get consumers off variable rate mortgage deals many have been dropping their fixed rate mortgages since 2009, and this has seen the average rate on these fixed mortgages continue to fall steadily. Officials said that many consumers are on standard variable rate mortgages at record low levels, and lenders want to try and get them onto fixed rate deals by dropping the rates to make the deals seem more tempting.

Industry experts have said that homeowners are now increasingly staying on standard variable rate mortgages with low rates of interest rather than switching to higher rate fixed rate deals, and this is something that lenders are determined to address. The urgency for lenders has been further increased by the fact that the base rate has now been at a record low of just 0.5 percent for well over a year now.

One finance expert said: “Many borrowers are opting to remain on record low SVRs and overpaying their mortgage rather than secure a new deal at a higher rate. Lenders are trying to incentivise borrowers onto new fixed rate deals by making significant cuts to rates. A fifth of lenders have moved to increase their SVR since bank rate was kept on hold after finding their previous level unsustainable. Competition for a limited amount of mortgage business continues to increase amongst lenders, who are once again actively competing to be top of best buy tables. Previously, only deals for borrowers with large deposits were seeing cuts, but as the market improves borrowers with smaller deposits are being offered more competitive deals. The platform has been set for the mortgage market to return to some sort of normality, while still applying the lessons learnt over the last few years.”

Tags: interest rates, finance, Mortgage loan, mortgage, Fixed rate mortgage

Posted in Mortgage News | No Comments »

Seeking advice on debt

Monday, June 21st, 2010

Over the past couple of years many households have experienced real financial difficulties stemming from the global financial crisis and the effects of the recession. Whilst the recession may be over and the economy is meant to be picking up there are still many people that are suffering financially, having got themselves into significant levels of debt over a short space of time.

During the recession and the credit crisis many people found themselves struggling to make ends meet financially, and this meant that many were forced to turn to solutions such as using their credit cards and overdrafts to meet day to day costs. This has left a huge number of households now struggling to make repayments on their debts, and with speculation over the base interest rate increasing this could be a very worrying situation for many.

It is vital for those that have debts that they are really struggling to repay to take action sooner rather than later, and the wrong thing to do – which sadly many people find themselves doing – is to bury your head in the sand and hope that the problem goes away. All too often this simply leads to the debt problems getting worse and worse, and getting to a point where the borrower ends up having legal action taken out against them.

In order to avoid this it is important to keep an eye on your finances and make cutbacks wherever possible so that you can ensure that your debt repayments are met. However, if you have gone through your finances with a fine tooth comb and cannot find any other areas where you can cut back it is important that you do not simply sit back and hope for the best. If you are struggling on a regular basis to make your debt payments it is advisable to seek advice as soon as possible.

There are two main courses of action that you can take to try and solve your debt problems. The first is to contact your creditors directly and see whether some arrangement can be made to ease the situation. Most creditors are aware of the problems that borrowers are facing, and may be able to reduce your payments by extending your repayment term. It may be a good idea to go in and see your lender in person, as you can then effectively explain your financial situation and get the problem resolved as quickly as possible.

Another option that is available is to seek advice from a debt advice agency, and there are a number of these available these days. These agencies will be able to look at your financial situation and outgoings and will be able to recommend an appropriate course of action, such as a debt management plan, and IVA, or simply suggesting ways of budgeting more effectively to ease the financial strain.

Tags: debt, credit, Debt settlement, finance

Posted in Debt News, Featured Articles | 1 Comment »

Bogus companies offering personal loans

Friday, June 18th, 2010

According to recent reports there has been an increase in the number of companies that are offering fake personal loans in the UK, and those being targeted by the bogus companies are people that would most likely be unable to get a traditional loan and are therefore more vulnerable or high risk. Officials are warning consumers to be on the lookout for suspicious loan companies and offers.

In the current economic and financial climate many consumers are more likely to fall victim to these bogus companies, as many will be after a financial lifeline, which they believe that these companies may be offering. Officials have warned consumers to look out for companies that target people through cold calling or via the internet or text messaging, as these are more likely to be the bogus ones.

The warning was issued by officials from the Citizen’s Advice Bureau, and there are concerns that people that are unable to get finance from mainstream lenders may easily fall for these scams in the hope of being able to get finance. However, many of these companies are charging upfront fees to customers to get them a loan, and then the loan never actually comes to fruition.

One official from the CAB said that many of these companies were targeting more vulnerable people, as they knew that they would be more likely to fall for the scam. She said that people needed to be careful of companies that carried out cold calling, emails, and SMS messaging, and direct mail campaigns in order to get people to take out a loan.

Consumers that are looking for a loan should always check the credentials and reputation of a company before making any commitment, and should always exercise caution if asked to pay an upfront fee.

Tags: Citizen's Advice Bureau, credit, fee, bogus, loan, finance

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Why use a loan comparison site?

Thursday, June 3rd, 2010

Finding a loan can be very difficult for borrowers these days, and with the restricted number of loans available coupled with the increased stringency of lenders some people really do struggle to find a loan that is well suited to their needs. Some may struggle to find a loan at all, often because they do not have perfect credit and are looking at companies who mainly deal with those that have not had credit problems in the past.

Over the past couple of years it has become even more difficult to find the right loan, as increased restrictions put into place by lenders have made it more difficult for those that want a loan that is both suitable and affordable. Whilst those that are looking for a loan can go through the websites of each of the individual lenders this can be a very time consuming and frustrating task. It also does not necessarily mean that you will find the finance or loan that you are looking for.

Over the past few years specialist websites have been set up known as comparison sites, and these allow users to compare everything from loans and insurance to credit cards, mortgages, and much more. You will find a range of comparison sites to suit your needs depending on the product or service that you are looking for, and these sites can make it far easier and quicker to find the right product or service at the right price.

With a loans comparison site you can really speed up the process by using the filtering facilities that most of them offer, where you can put in details such as whether you want a secured or unsecured loan or whether you have a good or bad credit rating. The results that you get back on the site will be based on the information that you entered, which means that you won’t have to waste a whole lot of time looking through loans that are not going to be suited to your needs and circumstances.

Once you have retrieved the list of loans and lenders from the comparison site you will be able to see at a glance which of them will be suited to your needs, and which are the ones that offer the most affordable repayments. You can then choose a loan that you know is going to be right for you and that you can comfortably meet the repayments on.

Tags: loans comparison site, finance, Personal finance, comparison site

Posted in Featured Articles, Loan News | No Comments »

Consumers urged to check credit before making loan application

Thursday, June 3rd, 2010

In the ongoing difficult financial climate many people have struggled to get finance, and no matter sort of finance consumers are applying for – be it loans, mortgages, or credit cards – there is a far higher chance of getting rejected for the finance these days than several years ago before the onset of the global financial crisis.

Lenders these days are being far more stringent with regards to who they will lend to, and the credit score of an applicant has become more important that every, as lenders are using credit reports to go through applicants’ past financial history with a fine tooth comb before making a decision on whether to give them the finance that the need.

With credit reports now playing such a big part with regards to the decision that lender making when deciding on loan and mortgage applications those that are considering applying for a loan are being advised to check their own credit before they make any application, as otherwise they could quickly be rejected and this could further damage their credit rating.

These days it is possible for consumers to order a copy of their credit report and score with ease and convenience online, and for just a few pounds. The information from the credit report can prove invaluable in helping consumers to determine whether to make an application for finance or wait until their credit has improved.

One former bank official said: “It has become really important to check your credit report before applying for finance these days, and by doing this borrowers can save themselves the hassle of making an application that is going to end up in the rejection pile. More importantly, however, they can avoid another black footprint on their credit file.”

Tags: credit score, credit history, credit, finance

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Credit Action figures show personal debt is on the rise

Thursday, June 3rd, 2010

Over recent years the level of personal debt that has been accrued by consumers in the UK has caused a great deal of concern, and for many individuals the debt problems have become increasingly worse as a result of the financial turbulence of the past couple of years. New figures that have been released have shown that personal debt levels in the UK have continued to increase.

The report has been released by the debt charity Credit Action, and the figures on the report have shown that personal debt levels have continued to increase. The twelve month growth to the end of April this year was 0.8 percent, and the total amount of personal debt came in at £1460 billion. In April of this year total lending is said to have increased by £0.4 billion.

In a breakdown of lending figures the Credit Action report showed that secured lending for the month had increased by £0.5 billion whereas consumer credit lending had fallen by £0.1 billion. The average level of debt per household in the UK is close to £9000, and this does not include their mortgage or secured debts. With mortgage debt included the level of debt per household comes in at close to £58,000.

Over the past couple of years many consumers have been in a catch 22 situation where they have been unable to get affordable finance due to restrictions put in place by lenders but at the same time have needed access to finance in order to fund their day to day lives in some cases due to problems caused by the financial crisis and job losses.

For many this resulted in them turning to their overdrafts, credit cards, and even doorstep lenders in order to get the money that they needed for essential purchases and bill payments.

Tags: debt, Personal finance, Consumer debt, finance

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Why save when you have debts?

Thursday, May 27th, 2010

These days many people are dealing with the burden of unsecured debt, with many having to make repayments on loans, credit cards, store cards, catalogues, and other types of unsecured finance. The past couple of years have been financially turbulent for most people, and many have ended up increasing their debt levels and having far more to cope with in terms of their financial commitments.

Whilst the base interest rate is at the rock bottom level of just 0.5 percent at present this is not always reflected in borrowing rates, and for many the interest rates being charged on loans, credit cards, and stores cards is extortionate given that the base rate it at such a low level. At the same time the interest paid on savings is minimal, which means that those putting their money into savings accounts are getting little to no return.

With this in mind it is worth considering whether there is any point in putting money into any form of savings account if you already have debt to pay off. The returns earned on savings will be far outweighed by the interest charged on debts in most cases, and this means that those that have debts would be better off putting any spare money towards repayments of their debts rather than putting it into a savings account where they will receive very little in the way of returns.

Recent reports have shown that many savvy consumers have realised that they could be losing out financially by putting spare money into savings rather than  using it to repay debts, and this has seen the number of people that are paying down their debts rather than saving money surge. For many getting rid of high interest debt has become a priority in the current climate, with many wanting to rid themselves of the burden of debt as quickly as possible.

Credit cards in particular have high rates of interest, with the gap between the base interest rate and the interest rate charged on cards becoming increasingly greater. Consumers who have a balance on a high interest credit card would therefore benefit from transferring the balance onto a 0% balance transfer card or using their savings to repay the debt. This way it is possible to avoid the huge interest costs that some providers charged on credit cards.

Tags: finance, Interest, debt, Personal finance, saving

Posted in Debt News, Featured Articles | No Comments »

Reduction in the number of home loans in Scotland

Thursday, May 27th, 2010

Official figures have shown that the number of home loans granted to people in Scotland experienced a drop in the first three months of this year. The figures, which were released by the Council of Mortgage Lenders, showed that in the first quarter of the year the number of loans that were granted to homebuyers in Scotland fell by one third.

Between January and March of this year the number of home loans that were granted to homebuyers in Scotland came to 9700. Whilst this figure did reflect a drop compared to the final three months of last year the number of loans granted was actually 28 percent higher than in the first quarter of last year.

According to the CML the end of the stamp duty holiday at the end of last year played a big part in the reduced figure due to the increase in activity prior to the end of the stamp duty holiday causing a lull at the start of this year. Many of those that would have otherwise waited until the start of the year to buy a home ended up rushing it through at the end of last year in order to save the money that they would otherwise have to pay on stamp duty.

The total value of the mortgages that were granted to buyers in Scotland in the first quarter of the year came to more than £1 billion. The previous quarter, when the number of home loans issued was higher, the value of the loans came to £1.6 billion.

A spokesperson for the Council of Mortgage Lenders said: “The pace of recovery in Scotland at first sight appears slower than in the rest of the UK, but in fact throughout the current housing cycle, market activity in Scotland has followed that of the whole of the UK very closely, but with a lag of around one quarter.”

Tags: Mortgage loan, finance, Scotland, council of mortgage lenders, mortgage

Posted in Mortgage News | No Comments »

Borrowers should prepare themselves before applying for loans

Wednesday, May 26th, 2010

Borrowers in the UK are being urged to prepare themselves before they make an application for a personal loan, with the current financial climate making it increasingly important for consumers to carry out checks before they make an application for a loan.

According to the report anyone that is considering applying for a personal loan should make sure that before they submit an application of even start comparing loans they order a copy of their credit report and do a proper check on their credit. This can help to boost the chances of getting an affordable loan by ensuring that the data on the report is correct, and can reduce the risk of consumers damaging their credit rating by applying for loans when their credit is not up to scratch.

Officials have said that lenders are far more stringent these days when it comes to credit checks, and even small blemishes can affect consumers’ changes of getting affordable personal loans and other forms of finance. This is why consumers should check their reports to see if there are any problems and check whether they can be rectified before they spend time looking at different loans and completing applications.

Consumers are able to order their credit reports online, which means minimal hassle. Checking their credit reports can help many people to enjoy increased peace of mind when making a loan application.

Credit reference agency Equifax said: “The credit crunch and lenders’ subsequent aversion to bad debt mean that our financial histories are being placed increasingly under the microscope. Credit ratings can be affected by anything from the basics – such as your history of repaying debt – to the finer details such as whether you own a fixed-line telephone.”

Tags: credit score, credit history, finance, Unsecured loan, Personal finance

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Borrowers could be at greater risk due to PPI ban

Saturday, May 22nd, 2010

Last week the Competition Commission announced that it was banning the sale of Payment Protection Insurance or PPI at point of sale in order to try and increase competition and reduce the cost of this type of cover, which has been causing controversy for some years. This was a provisional decision from the Competition Commission, and was welcomed by many.

However, one industry official has expressed concern that this ban on PPI at point of sale could actually adversely affect some customers, as it could mean that they are left unprotected and uncovered should anything go wrong. Finance journalist Lorna Bourke said that Britons could be left at greater risk as a result of this ban because they would have no cover in place.

The Competition Commission has already tried to ban PPI in the past, but some of the major banks appealed against this and their appeal was upheld. The ban on point of sale PPI could affect customers who do not bother or think about taking protection out elsewhere but will also affect the lenders themselves who could lose out because of the ban.

PPI is designed to cover repayments for the policyholder for a set period of time in the event that they cannot make repayments due to sickness, injury, or redundancy. However, these policies hit the headlines after investigations showed that the policies had often been mis-sold to those that did not want them, did not need them, and in some cases were not even eligible to claim on them.

Ms Bourke stated: “There is a real danger that banning all PPI policies sold alongside a mortgage or personal loan could result in borrowers having no protection at all. This could mean homebuyers losing their homes if they are unable to meet repayments.”

Tags: finance, payment protection insurance, competition commission, mortgage, PPI

Posted in Loan News | No Comments »

Will your lenders help if you are in financial trouble?

Saturday, May 22nd, 2010

There are many people that are in debt these days, and a huge number of them are struggling to keep on top of repayments to the point where they are having to cut back not only on luxuries but on day to day items such as food and household necessities.

The recession and the global credit crisis has resulted in an increase in the number of people that are facing difficulties with repaying their debts, and many borrowers do not know where to turn to get the financial assistance that they need.

There are actually a number of options available to those that have unmanageable debt levels, such as contacting a debt charity for advice or simply streamlining spending and outgoings. Another option is to contact the lenders to see whether the terms of the loans can be negotiated, and this is something that lenders have become increasingly used to over the past couple of years.

If you have debt that you are struggling to repay it is important to take action before you get to the point where you literally do not have the money to make the repayment and subsequently start falling into arrears. If you are already struggling and feel that things could get worse it is advisable to take action as quickly as possible.

In the current financial climate most lenders will be sympathetic with those that have always managed to maintain repayments in the past but have now started to struggle due to their financial circumstances. This is why it is well worth contacting the lenders and explaining your situation to see whether there is anything that they can do to help.

If you have a good credit rating lenders may be able to offer a consolidation loan, where all of your different debts will be rolled into one and you would pay over a set period of time based on the amount that you could comfortably afford to repay each month.

If this is not an option lenders may be able to review the terms of your loan and make changes, such as increasing the length of the loan period so that you repay over a longer period of time but you are paying less money each month. You can contact your lender in writing or by phone to discuss your financial problems, but it is always worth making an appointment to go in and explain your financial situation as this will get things moving far more quickly.

Tags: lenders, debt, loan, finance

Posted in Debt News, Featured Articles | No Comments »

Lenders offer mortgages to those with slightly damaged credit

Thursday, May 20th, 2010

Since the onset of the global credit crunch the term ’sub-prime’ has become something of a swearword in the financial industry, with lenders who were once doling out loans to those with bad track records shying away from anyone with even slightly tarnished credit.

The sub-prime mortgage sector has practically died a death over the past two years, and this has left even those with slightly damaged credit struggling to get mortgage finance. However, according to a recent report this could be changing with a couple of lenders now considering ‘almost prime’ and ‘complex prime’ consumers for mortgage loans.

Several years have passed since the financial meltdown began, which was parked across the pond and was partly blamed on subprime lending to those that could not make repayments. However, reports claim that General Electric Co.’s GE Money unit and Investec Plc’s Kensington division are now considering lending to those with slightly damaged credit who cannot get loans through mainstream lenders.

Compared to 2007 mortgage lending had fallen by 60 percent last year, and many lenders had stopped considering those with damaged credit for mortgage loans or any other type of finances. This has led to those with credit problems experiencing difficulties when it comes to getting a mortgage. However, the lenders that are easing up on the rules have said that it will not go back to the way it was in 2007, as they will ensure that customers have better credit histories and can meet repayments.

GE Money said: “‘Subprime’ sends messages out that people are lending money to individuals who can’t repay it. Our customers have clear track records though some may have had minor credit blips.”

Mortgage brokers believe that in the current climate there is a big gap in the market for those that have slightly damaged credit histories, as often these people are not a big risk but can still struggle to get mainstream finance.

Tags: Subprime lending, mortgage, credit, finance, Mortgage loan

Posted in Mortgage News | No Comments »

Debts could mean many having to work into retirement

Thursday, May 20th, 2010

According to recently released figures high debt levels could result in an increasing number of people having to work into their retirement in order to fund their lifestyle and deal with the financial commitments that they are still burdened with. Officials believe that this will lead to a sharp increase in the number of people that are only partly retired, as many may have to continue working part time.

Researchers have said that 20 percent of people aged fifty five and over said that due to their circumstances and financial positions they would have to continue working until they were seventy years of age, and in some cases even longer. This is the future that could be facing older people that still have mortgage and other debts but no proper pension provision or savings.

Officials have said that the retirement dreams of many people have been dashed as a result of the high levels of debt that they have coupled with their lack of savings and pensions. Their financial situations mean that many people will have to continue working part time when they should be looking forward to retiring and spending time with their loved ones.

Many of those polled said that once they reached their sixties they would move from full time work to part time work, but would not be able to retire completely because their financial situation would not allow for complete retirement. One pension consultant, Linda Whitney, said that savings for retirement had become a big problem. She described this as ‘one of the largest socio-economic problems’ facing the Government.

Whitney stated: ‘People need to wake up to the fact that they will have to save more, work longer or live on a lower pension in retirement.’

Tags: retirement, Pension, finance, debt

Posted in Debt News | No Comments »

95 percent LTV mortgage from Skipton

Friday, May 14th, 2010

First time buyers have had a difficult time when it comes to raising the money to get onto the property ladder over the past couple of years, and this is because since the onset of the global credit crisis lenders have been demanding much higher deposits than the traditional 5 percent that was once the standard. For many first time buyers the demand of 10 or 15 percent deposit has been too much, leaving them stranded when it comes to realising their dream of homeownership.

However, many first time buyers will be pleased to hear that one High Street building society is launched some new mortgage deals next week, which will include a mortgage of 95 percent Loan to Value, meaning that the buyer will only have to find a deposit of 5 percent if they qualify for the deal.

The mortgage product is being launched by the Skipton Building Society, and will be made available to both existing and new customers who apply directly to the building society. There are subsidiaries that borrowers can apply through but the minimum deposit available through these channels will be 10 percent.

The interest rates that Skipton is going to charge on its 95 percent LTV mortgage will vary based on whether the applicant is an existing customer or a new customer. For existing customers the interest rates for an 85 or 95 percent mortgage will be 4.99 percent to 6.99 percent with a fix of two years. For new customers for the same mortgages the rates are 5.19 percent to 7.19 percent, also fixed for two years.

Skipton said: “When we announced our strong 2009 annual results earlier this year, we said that we hoped to gradually increase both the volume and scope of our lending throughout 2010, and this new range is part of that process.”

Tags: Skipton, Mortgage loan, finance, mortgage

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Those in debt should consider IVA over bankruptcy

Thursday, May 13th, 2010

These days there are many people that are in debt over their heads, and for many of these people repaying the debt is pretty much impossible. In some cases consumers that are unable to meet their financial obligations do not really know the options that are available to them, and some launch straight into the bankruptcy procedure without looking at any alternatives.

However, one industry expert has recently claimed that those with a relatively high level of unsecured debt who cannot make repayments could do far better by considering an IVA, or Individual Voluntary Arrangement, as this could provide a number of benefits over other possible solutions such as bankruptcy or Debt Relief Orders.

The advice came from Pat Boyden, personal insolvency expert at PricewaterhouseCoopers, who said that one of the main reasons why an IVA could prove so beneficial compared to the other options was because this was a plan that provided far more structure for those in debt, enabling them to both improve their own finances over a period of time and return at least some of the money that they owe to creditors.

IVAs are known as a softer alternative to bankruptcy, and should not be entered into lightly or without thought. However, for those that really are struggling with a large amount of unsecured debt with a number of creditors these plans can provide structure and financial relief.

Boyden stated: “A massive 35,682 people entered into personal insolvency in the first three months of 2010, showing that the record number of personal insolvencies reached last year is showing no signs of slowing as the UK economy comes out of recession. The UK consumer continues to struggle with personal debt and will do for some time yet.”

Tags: debt relief, Personal finance, finance, individual voluntary arrangement, bankruptcy

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Personal debt levels set to remain high

Wednesday, May 12th, 2010

Over the past few years many people that did not have any significant debt have found themselves lumbered with debts such as credit cards, store cards, and loans, having struggled to manage on their income during the last couple of years, which have been financially turbulent.

At the same time many people who were already in debt have found themselves even deeper in debt, having struggled to keep on top of their debt repayments and to keep on top of other financial commitments. This has left many households in a very difficult financial situation, and despite the fact that the recession is now officially over things are not set to improve any time soon.

In a recent report a financial industry expert, Chris Tapp from Credit Action, has stated that personal debt levels in the UK are set to remain high for the foreseeable future, as many people are still struggling with their finances and therefore do not have the resources to tackle their debts and make repayments on the money that they owe.

Although the credit crunch has resulted in a tightening of lending criteria amongst banks and other lenders, which means consumers are less likely to get finance and accrue debt, many are struggling to pay existing debts because of factors such as reduced working hours and job losses.

Mr Tapp also added that the increase that has been seen in unemployment levels could make debt problems worse, as consumers turn to sources of alternative funding such as credit cards and overdrafts in order to make ends meet.

Tapp stated: “I think we will still continue to see personal insolvencies very high for some time until employment begins to filter back into the system and more people can get back into jobs.”

Tags: finance, repayment, debt, credit

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Make sure you don’t get a raw deal on your bank loan

Tuesday, May 11th, 2010

In the current financial climate most people are keen to keep their debts down, but for many people the need to borrow money is inevitable due to their circumstances. Those that do need to take out loans and other forms of finance need to ensure that they are not paying over the odds on their borrowing, which could prove difficult because the banks want to try and charge over the odds.

Following the most recent Monetary Policy Committee meeting it was decided that the base interest rate would remain at its all time low level of just 0.5 percent. The base rate has been at this record low since March of last year, and for many people this automatically leads them to believe that because the base interest rate is low the cost of borrowing must be low.

However, this is not the case, and according to reports UK banks have actually been slyly increasing the rate of interest on loans and borrowing, resulting in those that have to take out credit having to pay more. The misconception that a low base rate means low borrowing rates is a dangerous one for borrowers to have, as they may then drop their guard when it comes to checking and comparing the cost of borrowing.

Officials believe that all that has happened as a result of the base rate falling to such a low rate is that the margin between the base rate and the rate that banks are charging has widened to astonishing levels, and whilst consumers are suffering because of this the banks are actually reaping in the money, enabling them to shore up their finances following the chaos caused by the financial meltdown. It is thought that the banks could be making millions of pounds through these sly increases.

With this in mind consumers that are looking to take out a loan or other form of credit from a bank should make sure that they check the details of the loan agreement carefully to ensure that there are no hidden charges and fees that have been slyly added by the lender. It is also important to ensure that you compare the interest rates on similar loans from a number of lenders so that you can find the most competitive loan, as the interest rates charged can vary from one loan product and provider to another.

Tags: loan product, interest rates, Bank, finance

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Consumers more cautious about borrowing money

Monday, May 10th, 2010

A recent report has indicated that consumers in the UK have become increasingly cautious about borrowing money and getting into debt that they cannot afford to repay. However, despite this trend insolvency levels have continued to soar as a result of people finding themselves in unexpected situations.

The report claims that whilst fewer people are putting themselves at risk of taking on loans and debts that they cannot afford there are also many people that took on debt that they believed that they could afford only to find that something unexpected happened that affected their ability to make repayments.

The data was released by the debt charity Money Advice Trust. An official from the charity said that in many cases consumers had taken out loans and credit when they thought that they could afford to make repayments on them but then something like a death, job loss, or divorce had seriously impacted on their ability to repay the debt.

The charity also said that there had been a sharp rise in the number of people that were contacting advisors as a result of changing situations leaving them in a position where they were struggling to make repayments on their debts. The number of personal insolvencies is said to have increased by 0.9 percent in March compared to the previous month.

The Money Advice Trust said that it believed that consumers’ attitudes to taking out debt had changed, as they were more cautious about getting themselves into debt and having to struggle, particularly given the financial turbulence seen over the past couple of years.

The charity said: “We think the general attitude to debt has changed. People are now more cautious about borrowing and spending and think through the consequences of getting themselves in debt.”

Tags: Debt settlement, finance, debt, Money Advice Trust

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Homeowners pay small fortune for security of fixed rate mortgages

Tuesday, April 27th, 2010

Recently released figures have suggested that many homeowners in the UK are paying a small fortune each year for the security of taking out a fixed rate mortgage. Homeowners that are opting for a fixed rate mortgages are paying around £850 a year more for the security of having this type of mortgage according to industry reports.

There are a number of options available for those that want to take out a fixed rate mortgages, such as two, three, and five year fixed rate deals. The longer the fixed period of the mortgage the more the borrower pays in terms of interest. With the fixed rate deal borrowers enjoy more financial stability as they know exactly what their repayments and interest rates will be for a specified period no matter what happens with the base interest rate.

The nature of fixed rate deals offer peace of mind for many homeowners, especially first time buyers who want some financial stability to get them used to budgeting. However, for those that go for the longer fixed term deals the financial penalties can be huge, leaving them to pay far more interest on the loan, which costs them hundreds of pounds a year.

The interest rates on shorter term fixed rate loans have come down to some degree due to the high level of competition amongst lenders to provide the best fixed rate deals. However, longer term fixed rate deals can be much more expensive, with figures showing that borrowers will pay more than 1 percent more for a three or five year fix compared to a two year one.

One mortgage broker said: ‘whether you think it is a good idea to fix for longer depends on what you think will happen to Bank of England base rate and if you need that reassurance of knowing what your repayments will be. If your situation is likely to change a lot over that period, then it is worth seriously considering if you want to be locked in for that long.’

Those that do want the peace of mind that a fixed rate mortgage can provide are advised to shop around to ensure that they are able to get the best deal possible, as many lenders are now offering fixed rate mortgages but the costs involved can vary relatively widely making a big difference to monthly repayments and overall interest paid.

Tags: mortgage, interest rates, finance, Fixed rate mortgage

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Campaign group wants political parties to focus on personal debt

Monday, April 26th, 2010

Over recent weeks the main political parties that are fighting to lead the country as the next government have been highlighting what they believe to be the highlights of their manifestos, and have been showing their potential voters what they can do to help both the nation and the residents and businesses that live within the UK.

Whilst a number of different areas have been highlighted and discussed by the political parties there are a number of things that many people were disappointed to see were not really mentioned in the manifesto, or were only briefly touched upon.

One campaign group has stated recently that all of the different political parties need to put more effort into focussing on debt levels amongst consumers in the UK. The group, ClearDebt, has stated that the number of people that are harbouring debts in the UK has risen, although the average amount owed per person has fallen.

The data showed that between October of 2009 and March of this year the number of people with personal debt worries had increased by 13 percent compared to the same period the previous year. However, the campaign group also believes that whilst the number of people in debt may be on the increase the level of awareness amongst consumers has increased and this has led to people seeking advice more quickly.

Officials from ClearDebt stated: “The number of people asking us for debt help has increased by 13% between the two periods (October 09 – March 10 in comparison to the same period in 2008/09). What we are seeing is more people than ever before seeking help but with lesser debts. For me, Britain’s personal debt issues are getting more worrying, not less.”

Tags: finance, ClearDebt, debt, Consumer debt

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Dealing with mortgage arrears

Thursday, April 22nd, 2010

Those of us that managed to buy our own homes may be counting our blessings for getting onto the property ladder before getting a mortgage became increasingly difficult, as it is now, but there are other problems that homeowners have to worry about, namely how to ensure that they keep on top of their mortgage repayments.

Whilst it’s all well and good to have your own home, your property could disappear in a puff of smoke it you fall behind with repayments and already many people have lost their homes over the past couple of years because they have been unable to keep on top of repayments on their mortgage.

Over the past year things have been very difficult for many homeowners in the UK, with many suffering as a result of the recession, which resulted in massive job losses. The added pressure of the credit crunch added to the financial problems that many homeowners were experiencing, and regrettably many were unable to keep up with their repayments.

With banks clamping down more seriously than ever on mortgage arrears many quickly found themselves losing their homes, which were swiftly repossessed by the banks who were desperate to shore up their own finances by selling them as quickly as they could.

Whilst the situation as eased off a little now, partly due to pressure from the government to use repossession only as a very last resort, there are still many people who may be finding it difficult to make their mortgage repayments and could end up losing their homes eventually unless steps are taken to rectify the problems.

Industry experts are warning those that do experience difficulties in making mortgage repayments not to bury their heads in the sand and hope that the problem will go away. Instead, homeowners that are in financial trouble need to get advice as quickly as possible in order to try and sort the problem out before it gets to the repossession stage.

One option for homeowners is to speak to their bank or lender about their situation, being honest about finances and making suggestions about how they might be able to sort things out. Most lenders will be sympathetic about homeowners’ situations as long as they are made aware of the problem.

For those that do not get any joy from their lender there are also a number of debt advice charities that can help, such as the Consumer Credit Counselling Service or the Citizen’s Advice Bureau.

Tags: debt, mortgage, finance, Banking, advice, repossession

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Fewer personal loans being used for consolidation

Thursday, April 22nd, 2010

Recently performed research has indicated that compared to two years ago far fewer personal loans that are taken out in the UK are being used for the consolidation of other debts by consumers. The research was carried out by Sainsbury’s Finance, with the results showing a marked change in the number of people using personal loans to consolidate their other debts.

The research from Sainsbury’s Finance showed that a couple of years ago one pound in every thirteen pounds taken out by customers in the form of personal loans was used towards consolidation of other debts. However, this has now dropped to one pound in every fifty pounds, which marks a significant drop in the number of people using personal loans for debt consolidation.

Officials from Sainsbury’s Finance have said that whilst people are still taking out personal loans they are being used more for other purposes now rather than for consolidation of other debt. Home improvements are a popular choice for the use of personal loans, and more people are also using these loans more for the purchase of a new vehicle.

A Sainsbury’s spokesperson said: “Debt consolidation has always been one of the most common reasons for people to take out personal loans. But while more and more people are taking out a loan for other reasons, there has been a sharp decline in the proportion of people borrowing money in order to consolidate their debts.”

The spokesperson also went onto to state that consolidation was still something that those with a lot of debt should consider, as it could cut their monthly repayments down to an affordable level and could reduce the overall amount of interest that they pay on their debts. He added that it was important for consumers to shop around for the best rates when considering personal loans for any purpose.

Tags: finance, debt consolidation, credit, loan, Sainsbury's

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Many people in the UK hiding debt problems

Thursday, April 22nd, 2010

A recent report has suggested that there are now many people in the UK who are hiding their debt problems, with many of them struggling to make ends meet financially and hiding their debt issues from their families and loved ones. It is thought that around one in three people could be hiding problems relating to their debt levels and struggling as a result of their debts.

According to the report the value of this so called hidden debt mountain could be an astonishing £55 billion, adding to the already huge level of personal debt that consumers in the UK have overall. The average personal debt in the UK is now said to be just under £10,000.

Industry officials are now concerned how people with hidden debt will cope in this turbulent financial climate. Whilst the recession is over many people are still struggling financially, and the threat of job losses is still very real. For those that do have huge secret debts there is nobody close to turn to if things get unmanageable and this could create further problems for these people.

Those that do have high levels of debt that they cannot manage are being advised to seek advice from a debt charity or group, where they may be able to learn about alternative options that are available to them or get advice on better managing their finances and their debts.

One borrower who has a massive £36,000 of personal debt said: “None of my family know about the debt that I am in. A couple of years ago things got really tough so I had to go into a debt management plan, and my family still don’t know about my debt. I will be paying on the plan for about twenty years before I clear my debts. That’s a long time to keep a secret.”

Tags: debt, credit, secret, finance

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Spending could lead to increase in IVAs

Saturday, April 17th, 2010

It was recently reported that over the past few weeks Brits have been whipping their credit cards back out and hitting the High Street and Internet shopping sites with a renewed confidence. Whilst the recession is not long over and the effects of the global financial crisis are still affecting the nation consumers seem determined to spend their way out of the financial gloom.

However, whilst this increased spending may prove to be good news for the retail sector, which has suffered massively over the past year, it could also lead to consumers burdening themselves with debts that they will struggle to make repayments on. Some consumers are already burdened with debt, and additional debt could tip them over the financial edge.

There are now concerns that increased spending by consumers in the UK could lead to more and more people finding that they can no longer cope with their debts or make repayments on the amount that they owe. Officials believe that this could lead to an increase in the number of people applying for an IVA, or an Individual Voluntary Arrangement, which is a softer form of bankruptcy.

An IVA can have a profound effect on the credit rating and the financial future of the borrower, and should only be used as a last resort by those that are experiencing financial difficulties. However, the more people borrow the more they are likely to be desperate to escape their debt, and for some this may seem like the easy way out, as many fail to recognise the long term repercussions.

Of course, this doesn’t mean that those that have genuine problems with their debts and who are seriously struggling to make repayments do not have some form of help at hand. In actual fact there are many alternatives that consumers could look at which would not have as profound an effect on their financial future as an IVA or bankruptcy.

One potential solution is to contact creditors directly in writing or person, explain the financial situation, and look at making a reasonable repayment offer over an extended term – most lenders will consider this especially in the current climate.

Another option is to go to a debt management agency, preferably a charity run or government run one that does not charge fees. You may then be able to get advice to help you to manage your finances more effectively or may be able to get onto a debt management plan.

Tags: finance, credit, debt, individual voluntary arrangement

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UK recovery dependent on bank lending

Friday, April 9th, 2010

Officials from the Federation of Small Businesses have said that the recovery of the economy in the UK is based heavily on lending from banks, but that banks are refusing to provide finance to many businesses even in cases where the business has a sound business and financial plan in place.

Since the onset of the global credit crunch there have been many issues that have affected the financial industry and both consumers and businesses have suffered when it comes to being able to get finance, which further deepened the recent recession.

The global credit crisis left the banking industry practically in ruins, and in order to shore up their finances many banks are reluctant to lend money to businesses and consumers even if there is just the slightest risk. One economist said that banks no longer had the ‘risk appetite’ and this was affecting their decision over who they would lend to.

The Federation of Small Businesses said that a lot of research had been carried out that indicated many businesses had been desperate to borrow money from banks but that in the difficult financial climate the banking industry had been reluctant to hand out business loans.

However, other reports have indicated that it is not only the banks that are to blame. Some have suggested that the appetite for borrowing money amongst businesses has also dropped, and that one of the reasons behind the poor business lending figures by banks was a reduction in the level of applications.

It is thought that some businesses may be steering clear of borrowing money from banks for one of a number of reasons, from fear of falling behind with repayments to high interest rates or simply a growing lack of trust and confidence in the banking sector.

Tags: Economics, credit, Bank, Business_Finance, financial crisis, finance

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