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Wed 21st Nov, 2007
Posted in Bad Credit, Borrowing, Budgeting, Consumer Credit, Consumer debt, Credit Card, Debt Consolidation, Debt management, Personal debt, Personal loans, Student debt, UK Finance, Unsecured loans, interest rates at 1:52 pm by Steve Smith
One of the most expensive times of year for the parents of teens is August. Back to School means arguments about the difference between a good outfit, and an in-style outfit. The difference can be £500.
Adding books, tuitions, bus passes, sports, after school events and social outings can cost more than one month’s income. Few people have enough money to cover a student’s entire list of wants and needs. This problem is compounded when a family is trying to send two or three teenagers to school at the same time.
Many students earn their own money to help cover school costs. But parents need to be aware that others apply for credit cards as a form of unsecured loan without their parent’s knowledge.
Banks actively recruit students. Many students believe this is free money, a perk. They run up the limit, and then accumulate interest for months, before parents learn of the debt.
A student can easily run up an unsecured debt of £5,000 in a matter of weeks. This debt can haunt parents for years, and ruin a student’s consumer credit information report. Parents need to inform their children about the responsibilities and risks of a credit card, before the students are forced to take out a second mortgage or debt consolidation loans to pay their children’s debt.
Back to school is a great time to teach children that fashion does not define a person. It will not make them popular, but it could put them in debt. There is no reason why a student cannot be taught about APR and interest rates, debt management on mortgages and loans, and of course responsibility.
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Posted in Borrowing, Consumer Credit, Consumer debt, Financial products, Fraud, Personal loans, Property, Secured loans, UK Finance, mortgages at 1:50 pm by Steve Smith
Many homeowners are being encouraged by their brokers to lie about their income in order to secure large mortgages. To lie about your income in order to secure a loan is a punishable offence and could land you with a hefty fine or even a jail sentence.
The whole story revolves around a care worker employed by the citizens advice bureau who claims she was advised by her broker to lie about her salary when trying to secure her mortgage.
Sandra Ashcroft, 59, told her bank she received a £35,000 salary as a mid-wife in order to secure a home loan of £102,000 in 2003. She then applied to increase that mortgage to £122,000 after telling the bank she earned £80,000 working in the public services. Ms Ashcroft actually only earned between £3000 and £5,500.
What Mrs Ashcroft did was highly illegal and she was charged for obtaining money transfers by deception. She was given a six-month suspended sentence but the judge said that there was evidence to suggest that she had been steered towards giving misleading information.
The danger often lies with the temptation offered by self-cert loans and mortgages. These were created for self-employed workers or business owners who don’t always have records of their income. Whilst these loans are vital for those who have an income that doesn’t come from a salaried job, they open a window for people to try to obtain credit they cannot repay by lying on their application.
So if you are thinking of lying on an application for a mortgage or even if your broker is encouraging you to lie do not be tempted. This is a very dangerous route to take and if you are caught out you could face losing your house, ruining your credit rating and even a jail sentence. So always consult the mortgage company or even a lawyer if you are unsure about specific details on your loan application form.
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Thu 8th Nov, 2007
Posted in Borrowing, Consumer Credit, Financial news, First time buyers, Homeowners, House buying, Housing news, Inflation, Property, Remortgaging, UK Finance, interest rates, mortgages at 1:57 pm by Steve Smith
First time buyers paid £162,055 in May, 2007, while the average price paid by former homeowners who are moving up averaged £235,095.
UK house price inflation for first time buyers is unchanged, at 11.2 in May, 2007. The price holding from the increase of 1.3 per cent between April and for first time buyers .
The inflation rate for homeowners moving up fell from 11.3 per cent in April to 10.8 per cent, a 0.6 per cent increase, compared with an increase of 1.1 per cent over this period last year.
The adjusted average house price in May 2007 was £211,056, up from £209,454 in April 2007. UK annual house price inflation in May 2007 was 10.9 per cent, down from 11.3 per cent in April 2007.
The annual numbers in London were 14.5 per cent in May, up from 14.0 per cent in April.
England, Scotland, and Wales saw decreases in inflation in May 2007. The inflation rate in England fell from 10.0 per cent in April to 9.8 in May; the inflation rate in Scotland fell from 17.8 per cent to 15.5; in Wales the rate fell from 9.0 per cent to 8.9 per cent .
Adjusted average house prices in May were £218,225 in England, £163,852 in Wales, £157,974 in Scotland and £229,519 in Northern Ireland.
The English region with the highest average house price in May remains London at £324,084. The lowest average price was in the North East at £146,023.
This still forces first time homebuyers to take out home loans that are four or five times their annual income.
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