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Archive for August, 2007

Read what the bank is offering before you say Yes!

Thursday, August 30th, 2007

No matter who you are, when it comes to your personal finances, so much depends on the deals that you get from your bank. With just a few big high street banks out there dominating the market, you should really pay attention to the deals that they are offering you on your financial services.

A new report by the Daily Mail shows that most of the high street banks have some excellent deals out there on some of their products, they also have some really terrible deals that will be offering customers terrible value for money and will not be very good financial choices.

Whether you are looking for a personal loan, paying off your credit cards and looking for a better rate while you do so, or simply like to save a few pounds each month for rainy day, by carefully selecting what you say yes to and what you say no to, you will be able to take the good while avoiding the bad deals that are available from the banks.

For example, while the Abbey is paying 7.25% pre-tax on its fixed rate monthly saver account – an excellent rate in the current market – it recently reduced the rate that it pays on its instant access Isa at the end of May from 5.6% to 4.55% and 5.25%. This is a huge difference on what you will be paid from the same institution.

Meanwhile, other lenders are focusing their advertising on the great rates they are offering on loans and mortgages, whilst putting the high arrangement fees in the fine print.

It pays to look closely at what your bank is offering and not assume the your own bank offers exactly the same products as the others. It is fine to shop around. It is virtually certain that some of the offers they give you will be great, and some will be terrible, so read them, be a discerning consumer, and choose the options that suit your needs.

Posted in Banking, Borrowing, Consumer Credit, Financial news, Financial products, interest rates, Personal loans, Savings, Secured loans, UK Finance | No Comments »

Mortgage Borrowing Increasing

Wednesday, August 29th, 2007

Two million people will borrow mortgages that total four times their salaries to get on the property ladder, according to a survey of 2,200 adults, by mform.co.uk. They believe that 2 million individuals aged 34 or under will borrow four times their salaries.

Another 828,000 recipients will borrow over five times their income, while 290,000 will borrow over six times.

Francis Ghiloni, of mform.co.uk, says this is not good for some

“Around 36% of people aged 24 or under who intend to take out a mortgage over the next three years claim that they have will to borrow more than four times their salary,” he says.

“As property prices continue to rise and wage inflation fails to keep in line with this, many young people looking to get on to the property ladder will have to take on huge debt.

“Many will have interest only mortgages because they will not be able to afford to repay the capital they have borrowed, and they will be heavily exposed to any falls in property prices and increases in interest rates.”

That 56% of these home loan borrowers will be aged 34 or under compounds the younger generation’s debt burden, making it harder for them to pay their debts. Many of these will have students loans and other debts outstanding when they purchase their property.

This will become even more dangerous in the future as these people release equity from their home, increasing their risk rate, and the interest rates paid on subsequent mortgages.

Consumers are warned to carefully research their financial products before signing on the dotted line, especially on products that reduce their chances of borrowing in the future.

Posted in Borrowing, Consumer Credit, Consumer debt, Debt management, Financial news, Financial products, First time buyers, Homeowner Loans, Homeowners, House buying, Housing news, interest rates, mortgages, Personal debt, Personal loans, Property, Secured loans, Spending, Student debt, UK Finance | No Comments »

Purchasing Your Holiday Home Abroad

Wednesday, August 29th, 2007

With the recent weather that Britain has been experiencing it comes as to no surprise that many UK residents are now flying abroad to enjoy warmer, sunnier weather for their holidays.  Many holidaymakers who spend their holidays at a warm country often end up dreaming of a permanent spot in the sun and start searching for a property abroad.  However, before making an impulsive buy it is important that you prepare yourself before making such a big financial decision.

Many prospective buyers for overseas properties are advised to apply the same checks to buying property abroad as they would if they were purchasing property at home.  One important way of preparing yourself for your new purchase is to find out about the local laws as well as any taxes that may affect your purchase.  One way to arm yourself is by obtaining legal advise from a bilingual solicitor who will check all documents and pay particular attention to the permission for building works and contracts that may be done on your property.  You will also want to make sure that you will be eligible for a mortgage or be able to finance a purchase.

One of the main reasons why overseas buyers experience problems with holiday home purchases is due to the lack of research as well as their inability to hire the right legal advise or estate agent.  So before heading out and purchasing your holiday home it is advised that you fully investigate the legal and planning situations in the local area and ensure you have the proper funding available to you. You may find that it is not possible to use a UK home loan to fund your property purchase but instead need to take out a loan abroad. This can have additional legal implications for buyers, increasing the need for local knowledge.

Posted in Borrowing, Consumer Credit, Homeowner Loans, Homeowners, House buying, Property, UK Finance | No Comments »

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