Northern Rock offers 10 percent mortgage
February 28, 2011
Over the past few years getting a mortgage has become increasingly difficult for first time buyers, not least because of the level of deposit that is being demanded by the various lenders. However, according to industry officials there is some light at the end of the tunnel, and some buyers may now find that they can get a mortgage with a far smaller deposit than they may have anticipated.
For many first time buyers the financial climate left them with little choice when it came to mortgages, with many lenders wanting a deposit of at least 15 percent. However, officials have said that the restrictions in the market seem to be easing and borrowers are now able to find more mortgages that offer a 90 percent loan to value.
Northern Rock is a financial institution that will stick in many people’s minds for being the first major UK victim of the global financial crisis back in the latter part of 2007. It became the victim of the first run on a UK bank in over a century and became the first of the banks to be given a bailout by the government. However, in a turn of events this lender is now supporting first time buyers with the availability of a 90 percent loan to value mortgage.
This will come as good news for first time buyers, who notoriously find it difficult to raise a deposit because they have no previous property from which to take equity. It is hoped that more and more lenders will follow suit and will start to offer mortgages with lower, more affordable deposits to help get first time buyers back into the market. This comes after reports that many people have been forced to rent property because they cannot get affordable mortgage finance.
Beat the interest rates when it comes to loans
February 22, 2011
When it comes to taking out a loan we all want to get the best deal possible, and this is something that can save us a lot of money on our monthly repayments as well as on the overall levels of interest that we pay on our borrowing. It is important to seek out the most affordable and suitable deal when it comes to loans, and this can be done by comparing the various loans and lenders on the market to see what they offer in terms of value for money.
When it comes to getting an affordable, good value, suitable loan it is a matter of taking the time to do some research as well as getting the timing right. Over recent months some lenders have reduced the loan rates on their mid-range personal loans, making them better value for money and enabling borrowers to enjoy more competitive deals and rates.
However, this is something that will not last for long, as interest rates are certain to rocket once the base interest rate increases, which it is likely to over the coming months due to the increased pressure placed on the Monetary Policy Committee stemming from rocketing inflation. Many believe that the base rate will increase in around April or May, and this could mark the first of a series of increases for this year.
The base interest rate has been at an all time low of just 0.5 percent for nearly two years, and this is the lowest level it has ever been in the history of the Bank of England, which spans over three hundred years. However, it is unlikely that the base rate can stay at this level for much longer, and with inflation levels now soaring at twice the government’s set target of 2 percent, many believe that the base rate will increase sooner rather than later.
If you are thinking about taking out a loan this year you need to make sure that you do so before the interest rates start to increase later this year, as otherwise you could end up paying far more for your borrowing. When the base rate increases lenders will no doubt act quickly to increase their own interest rates, and this means that you will see both the repayments you have to make and the overall level of interest that you pay increase.
More people likely to need debt advice this year
February 18, 2011
Over the past few years more and more people have fallen into a debt trap, and have been left struggling to try and keep their heads above water financially because of the challenging financial and economic climate that is hitting so many people across the country. The demand for debt advice over the past couple of years has soared, and with a rising number of challenges set to hit consumers this year there are fears that this demand could continue to rise.
A number of industry experts and groups have painted a bleak picture when it comes to personal finances in 2011. Recent reports have suggested that the number of personal insolvencies is set to rocket despite the fact that there was a drop in insolvency numbers if the last three months of last year. The Consumer Credit Counselling Service has also said that it has already seen a surge in the number of people using its online credit counselling tool, and that this demand is likely to increase sharply over the course of this year.
In January around 8591 people are said to have used this online debt counselling tool, and this was twice has many as the previous month. It was also the higher than any month in 2010. Many of those using the service may have been struggling with their Christmas and New Year debts, but there are many other factors that are to affect consumer finances this year, including higher living costs, increased VAT, job losses, and possible interest rate hikes.
Delroy Corinaldi, CCCS External Affairs Director, said: “The next year will be very difficult for many people and I am concerned that those struggling with debt will end up being charged for debt advice because they are unaware that free advice and support is available. I hope that the availability of this free service which can be used at any time online will help prevent people paying for debt advice unnecessarily.”
Gold companies reprimanded by OFT
February 15, 2011
A number of gold buying companies have been issued with a warning from the Office of Fair Trading after it was found that they were treating their customers unfairly. Many people have started selling gold jewellery and items over the past couple of years due to difficulties in getting loans and finance when they need money, and because of the difficult financial climate.
However, an investigation was carried out by the OFT showing that many customers were being forced into taking what had been offered for the jewellery even if they did not believe it was a fair offer. Companies were found to be limiting the amount of time that consumers had to refuse an offer, and by the time they did refuse their jewellery had already been melted down on the assumption that they were accepting.
Five firms are at the receiving end of OFT warnings and have been told to change their practices, and this includes CashMyGold, Cash4Gold and Postal Gold. The companies are said to be working with the OFT in order to improve their practices so that customers are dealt with more fairly. Following the investigation the OFT raised a number of concerns about the companies, and whilst two of the five have closed down the other three are said to be cooperating with the watchdog.
A Cash4Gold spokesperson said: “We have, and will continue to be, clear with our customers as to what they should expect, and appreciate the OFT’s efforts to ensure our competitors adopt some of the same practices that have been part of our service offering from day one. Unlike some other gold buyers who shut up shop, we were pleased to work closely with the OFT to fully resolve all concerns.”
Consumers should use continued rate cuts to their advantage
February 2, 2011
Consumers who may be looking for a personal loan are being advised to use personal loan rate cuts to their advantage by ensuring that they compare the options open to them and try to get the best deal. There are a number of lenders, including banks and even supermarkets, that have cut the interest rates on some of their mid-range loans, and this means that consumers could potentially get a far better deal on their borrowing.
At this time of year there are often many people who are thinking about taking out a personal loan. In some cases this is so that they can consolidate their existing debts, including debt that has been accrued on credit cards and overdrafts over the Christmas period. Whilst the Bank of England base rate is still at its all time low of just 0.5 percent the rates being charged on personal loans have been rising.
However, over recent weeks a price war on personal loans appears to have erupted amongst lenders, and this means that those with good credit could find that they are able to cut the amount that they have to pay for their borrowing. The price war has made it essential for people that want to get a good deal on their borrowing to compare a range of loans and lenders before making any commitment. This is something that they can do easily and quickly online.
One industry official said: “With interest rates on some personal loans having come down now could be the ideal time to start looking for a loan. However, consumers need to bear in mind that rates may start to rise again, especially if the bank base rate increases over the next couple of months.”
Financial education vital for younger people
February 1, 2011
A group of MPs from different parties have formed an alliance to try and get financial education in schools. The MPs say that this education should be mandatory, and that it could help many younger people to avoid the same financial pitfalls and problems that many people are facing at present. Personal debt problems have soared over the past couple of years, and many are now facing dire problems with their finances.
It is hoped that if the initiative is successful younger people would leave school with a far better grasp on finances and how to manage money. This could help them through many financial challenges in life, and enable them to steer clear of debt and ensure that they have savings. With youngsters these days facing huge difficulties when it comes to things such as student loans or getting a mortgage it is thought that this sort of education has become vital as part of the curriculum.
There are many groups and organisations who are backing the group of MPs, who have formed the All Party Parliamentary Group, which has become the biggest of its kind. Amongst the groups and organisations that are backing the APPG are the Citizen’s Advice Bureau, Which?, and the Personal Finance Education Group.
The APPG stated: “Young people are entering an increasingly complex financial world of store cards, mobile phone tariffs, credit agreements and financial marketing. Through my MP casework, I have seen first-hand the implications for those who have made poor decisions, too often through a lack of understanding. I am passionate that financial education is the best way to equip all young people with the relevant skills to make informed decisions and empower them as consumers. I have been working hard to secure cross-party support to help champion this cause, so the next generation is equipped to confidently address the financial challenges ahead.”