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.

Will your lenders help if you are in financial trouble? is a post from: Glitec

The figures were released by the Bank of England, and showed that in all around sixteen thousand mortgage applications are being turned down by lenders each month, as the ongoing recession and the global credit crunch continue to take their toll and affect lending levels.

Around twelve thousand mortgage applicants a month were being turned down in December of last year by UK mortgage lenders, but since March this has increased to around sixteen thousand since March of this year, with lenders becoming increasingly stringent as the recession wreaks havoc in the jobs market and the economy.

The Bank of England has not released figures such as these before, and the date has shown just how particular lenders are becoming when it comes to who they will accept for credit.

One mortgage broker expert stated: ‘It’s much harder for homeowners to be accepted. We’ve seen a complete reversal in the way that mortgage lenders do business. Where before they were looking at reasons why they should grant you a loan, today they are looking at reasons why they shouldn’t.’

Another industry official stated: ‘While recent signs from the housing market have been more encouraging, we do not anticipate a significant recovery in activity in the coming months. Lending volumes appear to have stabilised at extremely low levels, but the weak labour market and lenders’ limited access to funding will constrain activity for some time yet.’

The Council of Mortgage Lenders stated: ‘Underneath the headline gross lending figure, it’s likely that a moderate improvement in house purchase lending in May has been offset by very low remortgaging volumes as borrowers stay with existing deals. While recent signs from the housing market have been more encouraging, we do not anticipate a significant recovery in activity in the coming months. Lending volumes appear to have stabilised at extremely low levels, but the weak labour market and lenders’ limited access to funding will constrain activity for some time yet.’

Thousands of mortgages a month being turned down by banks is a post from: Glitec

One industry official recently stated: ‘We see far too much evidence of people having been lent money where it was clear from the start that they would not be in a position to repay it. We have repeatedly called on lenders to carry out thorough checks and it is imperative that this is done.’

Another official added: ‘With more than 7,716 loan repayments being missed every day and record write-offs, you might think that lenders had learnt their lesson.’

The recent research showed that many applicants were not being asked for proof of income when applying for unsecured credit with some lenders, despite the evidence that many other lenders have really tightened up on their lending criteria as a result of the global credit crunch. More worryingly, it was found that some applicants were not even being asked about their income on the application.

Figures show that only 30% of borrowers applying for unsecured credit in the last twelve months were asked to prove their income before being given the loan or finance that they were after. Experts are concerned that this practice will lead to increased defaults, and have urged lenders to be more stringent with regards to carrying out the necessary checks to verify the income of each applicant before agreeing to offer finance.

Recent additions:

• Is the First Plus special offer a good deal?
• Hikes in personal loan rates may mean credit cards are more viable option
• Many unable to access first direct loans
• Interest rates on personal loans continue to rise
• Loans market still suffering due to credit crunch
• Avoiding risks with an unsecured personal loan

Lenders needs to be more careful on checking applicant information is a post from: Glitec

Sale and rent back scheme work by the firm purchasing the property from the homeowner, and then renting the property back to them as tenants. Although in principle this sounds like a good way to help homeowners to avoid repossession some officials are concerned that sale and rent back firms are taking advantage of the more vulnerable, and are making promises about lifelong tenancies that they then fail to keep as well as paying way under the market value for the property, delivering the homeowner with a double whammy.

An official from Shelter recently stated: “People are being ripped off. We are seeing people who are getting only 50% or 60% of the value of their homes instead of the 70% to 90% they should be getting. Many of the promises that are made that people can stay in their homes for the rest of their lives are not being honoured.”

However, sale and rent back firms have responded by stating that were it not for this type of scheme many more homeowners would end up on the streets having been repossessed. They state that this way the homeowner gets to stay in the property whilst paying rent instead of a mortgage, with the rental payment sometimes coming to far less than the mortgage repayment did.

Shelter officials have viewed many sale and rent back firms in a dim light for some time, and in the past one official from the charity said: ‘Some firms will make any promises to convince you to go in for what is plainly a very bad deal. It’s daylight robbery. These vultures are preying on the elderly in particular.’

The CML has stated in the past: ‘There’s a clear opportunity for consumer detriment. These firms are being confused with the regulated equity release market. They are dealing with people at their most vulnerable point. It’s important that the Government acts quickly.’

The government responded by stating: ‘The Government is aware of concerns raised about sale and leaseback companies. It is important that anyone considering complex property transactions such as these should seek independent advice before committing themselves.’

The Council of Mortgage Lenders also commented on this issue last year, stating: ‘Controls exist for action taken by mortgage lenders when customers are in arrears but there are no such safeguards for customers entering into sale-and-leaseback schemes. In a climate of rising repossession, consumers in financial difficulty need to be well informed and protected. The Government needs to consider urgently whether regulation of sale-and-leaseback schemes by the Financial Services Authority is appropriate because it would provide protection for potentially vulnerable consumers.’

Recent Mortgage additions:

•  Are Cheap Mortgages Coming Back on the Market?
• Repayment and Interest Only Mortgages
• End Of The Road For 125% Mortgages
• The Benefits of a UK Mortgage Broker
• Fixed Rate or Variable Rate Mortgage

Sale and rent back scheme still being branded a rip off is a post from: Glitec