Many still paying off loans and credit cards from last Christmas
November 30, 2010
Industry officials have said that many people in the UK are still paying off their credit card and loan debts from last Christmas, but many are planning once again to borrow for Christmas spending again this year, despite already being in debt. For people that still owe money from last Christmas and who then take out a loan or credit card for this year could find themselves facing spiralling debt issues.
Nearly two and a half million people are said to be still repaying their debt from last Christmas, and many therefore do not have any available cash to pay for this Christmas. It is thought that a large number of people will be relying on credit again this year to help pay for things like Christmas gifts, entertainment, clothing, and going out, and this will leave many with a financial hangover when January comes around.
It is thought that many people will be paying for Christmas this year by borrowing money, and according to research around 55 percent plan to borrow on credit cards to pay for this Christmas whilst around 3 percent are planning to try and take out a loan in order to fund the cost of Christmas. Roughly 25 percent of consumers in the UK are hoping to be able to cover the cost of Christmas by using their savings.
An official from ConsumerIntelligence.com said: “Christmas is only one day in the year but the financial effects appear to last all year for a substantial number of adults. Around 14% of adults got into debt as a result of Christmas spending last year and many are still paying for that. Using a credit card for Christmas spending makes perfect sense as long as you have a repayment plan and are not just running up debts which you will not clear.”
Consolidate your loans for the New Year
November 29, 2010
Like many people you may already be thinking about your New Year’s resolution for 2011, and there are many people that will be gearing up to sort out their finances in the New Year following a difficult and turbulent year. Starting the New Year afresh in terms of your finances can be very inspiring, but this involves being organised enough to get everything sorted out as soon as you can, so that by the time 2011 kicks off your finances are as organised as they can be.
One way in which you can do this is by looking at all of your debts and financial commitments to see whether you can not only reduce the amount you pay but also ease the hassle associated with repaying a range of debts. Debt consolidation is one way in which you can do this, and every year many people consolidate their debts to ease their finances and reduce their outgoings.
It is well worth starting your search for a suitable and affordable consolidation loan as soon as possible, as this will give you time before Christmas and New Year to get your loan sorted, get your existing debts paid off, and start afresh in 2011 with a new streamlined budget.
When you consolidate your debts you basically use a consolidation loan to repay your smaller existing debts, and you replace them with one larger debt. This will enable you to reduce the number of payments that you have to make each month, as you will only be making one repayment instead of several. It will also reduce the amount of money that you have to pay out each month, as you can get a low interest consolidation loan with repayments that are lower than the combined amount from your existing loans.
One of the reasons why it is advisable to look for a consolidation loan now is that loan rates have been coming down over recent months following a long period of interest rate hikes, and many experts believe that these rates will start to increase again soon. This gives you the perfect opportunity to get a lower rate loan before rates start to increase again.
You can search online for a low rate consolidation loan, and you will find plenty of choice and some good deals as long as you have a decent credit rating. Once you have consolidated your debts you can focus on repaying your one loan off rather than worrying about a variety of debts and repayments.
Good news for homeowners in relation to property prices
November 29, 2010
Over the past couple of years many homeowners who may have been hoping to see the equity levels in their homes keep rising may have been disappointed after the property bubble burst and house prices came crashing down. However, whilst some homeowners may still be concerned over the prospect of property prices slumping further a recent report has suggested that this will not be the case.
According to the report from The Centre for Economics and Business Research the property market will edge up a little in the coming year, with property prices expected to increase by around 2.2 percent. The low level of increase in property prices is likely to be down to proposed public sector cuts and household incomes, which are still under intense pressure.
However, the future for homeowners looks brighter after next year, with the CEBR claiming that property prices will gain momentum after next year thanks to the rock bottom base interest rate from the Bank of England, which still stands on just 0.5 percent. Other contributory factors are said to be cash injections from the Bank of England, and shortage of properties in the UK.
The CEBR claims that house prices could increase by 16 percent by 2014, which will come as great news for homeowners. However, there are other economists that believe house prices will slide. Howard Archer from Global Insight believes that house prices will fall by 10 percent over the coming year, whilst Capital Economics predicts a fall of 20 percent between now and the end of 2012.
The CEBR said: ‘Quantitative easing is a very powerful medicine and is likely to have a strong impact on the housing market eventually. House prices may not move much during 2011 but they are likely to rise significantly in the following three years on the back of quantitative easing to offset the impact of the fiscal retrenchment.’
Use the internet to get debt advice
November 20, 2010
Many people these days have a lot of debt that they are dealing with, and in the current climate it has become increasingly difficult for those in debt to maintain repayments and make their finances stretch far enough. With high levels of debt to deal with, and the difficult financial climate making it harder to manage debt, many people have flocked to get advice from debt charities and agencies with regards to how best to ease the financial strain.
However, the number of people seeking debt advice from agencies and charities has soared over the past couple of years, and these charities simply don’t have the resources to deal with the increase in demand for their services. This has resulted in those seeking debt advice having to wait for weeks or longer to get to see someone about their financial worries rather than the few days that they may have had to wait in the past.
Having to wait all this time can be a problem for many people, as many may need advice much quicker than this because their financial situation is spiralling out of control. Rather than sitting there fretting about your debt whilst you are waiting to see a debt professional it is worth taking steps to get more information yourself.
The Internet is a great place to start when it comes to learning more about how to handle your debt problems. Of course, you may not find all of the answers online, as this is not the same as speaking to someone that has specialist knowledge and can address your specific situation. However, you should find a range of tips and a lot of advice that may be general but could still prove helpful.
By going online for debt advice you can learn more about the different options that may be open to you and whether you would qualify. You can also find out more about different debt agencies and charities, so if the waiting time with one is too long you can try others to see whether you may be able to get an appointment to see someone sooner.
You may even find the solution to your debt problems online, as you can find out more about saving money on your monthly outgoings, courses of action you may be able to take yourself such as contacting your lenders, or how better to manage your finances to make it easier to keep on top of your financial commitments.
Lenders want FSA to review mortgage proposals
November 13, 2010
It was recently announced that the UK’s financial regulator, The Financial Services Authority, was looking to make some big changes to the mortgage lending market, having put forward a range of proposals that included wiping out self certified mortgages, putting into place minimum deposit levels for lenders, and increasing the checks that lenders would have to carry about before approving any mortgage loan.
However, the proposals have raised concerns amongst mortgage lenders, many of which have said that the FSA plans will make it impossible for some people to get a mortgage, and could see the mortgage and property sectors taking a real knock. Mortgage lenders are now calling on the FSA to review the proposals with a view to watering them down.
The Council of Mortgage Lenders has said that the plans of the FSA are flawed and are not practical, but according to the FSA the plans are aimed at reducing irresponsible lending. The regulator said that it was important that borrowers were protected from irresponsible lending by ensuring that they were not given mortgage loans that they could not afford to repay, which could otherwise result in them quickly losing their homes through repossession.
The proposals were first put forward by the FSA in October of last year, and its plans have been evolving since then. However, since that time there has been an ongoing battle between the FSA and the mortgage lending industry, which is strongly opposed to some areas of the proposals.
The FSA has argued: “Almost half of UK households (46%) have had little or no money left after their mortgage and other bills were deducted from their income. Even a modest rise in interest rates could lead to a significant increase in the number of families suffering financial distress. This is why it is imperative that we ensure lenders act responsibly and do not return to irresponsible practices, in order to protect consumers from taking on mortgages they cannot afford and potentially losing their homes.”
Half of mortgages not covered by life insurance
November 6, 2010
A recent study has found that around half of mortgages in the UK are not covered by life insurance, indicating that over seven million Brits do not have a proper policy in place to cover their mortgage in the event of their death. The research was carried out by Sainsbury’s Insurance and paints a worrying picture of the UK mortgage market, as an increasing number of people fail to get the proper protection that they need.
Many people are desperate to cut back on their outgoings and reduce the amount that they pay out each month by as much as possible, and some have started to take risks in order to do this by cutting out potentially vital services such as insurance cover. The seven million plus Brits that do not have life insurance cover on their mortgages owe £318 billion collectively.
Sainsbury’s also carried out a similar study four years ago, and the results of that research showed that around £217 billion worth of home loans were not covered by insurance. This means that in the last four years the number of uninsured mortgage loans has increased by a massive 47 percent.
Officials are concerned that many families could be left high and dry in the event of the death of the mortgage holder, as this would mean that the mortgage repayments would not be covered. Failure to have the cover dramatically decreased peace of mind for the household and could leave loved ones behind facing severe financial issues and possibly losing the roof from over their heads.
An official from Sainsbury’s said that this sort of cover “is particularly important for homeowners… as it can help to ensure peace of mind that the property is paid for upon death, allowing loved ones to continue living in the family home, and it could also alleviate any financial burden, therefore providing financial security.”