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Thu 9th Oct, 2008
Posted in Consumer Credit, Personal loans, Homeowner Loans, UK Finance, Credit Card, mortgages, Remortgaging, Homeowners, House buying, Financial products, First time buyers, Credit record, Property, Financial news, Housing news, Borrowing, Secured loans at 1:27 pm by admin
The house price crash is proving to be a boon for many potential first time buyers. Those who have waited for years, ever-frustrated as house prices have rocketed beyond their reach are at last seeing a chance to buy.
With house prices having fallen eleven months in a row (according to figures from Nationwide), buyers poised to step on that first rung are waiting in the wings. So what are market conditions really like?
Well, according to the financial papers, prices are set to still fall, which is why many potential buyers are still holding back.
This may be bad news for those desperate to sell, but for those looking to finally be handed the keys to their own home, the news is great.
Many of these would-be purchasers have been saving up for years, watching prices soar further and further beyond their reach. Provided that they haven’t given up and dipped into their funds, they could be on track to buying their dream home in the next year.
One of the only dampeners that buyers should be aware of is the difficulty right now in getting a loan. Existing home loan borrowers have an easier time, should they find a buyer, as they have a proven credit record on their side and probably a chunk of equity in their property.
Lenders are now asking for as much as 25% deposit - compared to the 100% or even 125% loans that were being offered when prices were still rocketing. Unless you have a good credit record and a hefty chunk of savings, your dream property might not be as close as you think.
So, potential buyers could be wise to use their credit cards and take out cheap personal loans - provided always that they make repayments promptly. By building up a good credit record before they look at getting their home loan, they stand a great chance of getting that mortgage approval they need.
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Wed 10th Sep, 2008
Posted in Bad Credit, Consumer Credit, Personal loans, Homeowner Loans, UK Finance, Credit Card, interest rates, Consumer debt, Credit record, Property, Unsecured loans, Borrowing, Personal debt, Secured loans, Debt management, Missed payments, Tenant loans at 1:34 pm by admin
There’s a lot of confusion about credit ratings amongst people seeking personal loans and other forms of credit.
Many people believe - wrongly - that a credit record shows whether a lender has refused credit. This is not the case. Every time you apply for credit a ‘footprint’ is created on your credit record to show other financiers what you have been up to, but no record is immediately made as to whether you took up an offer, or whether it was refused.
One thing that varies from lender to lender is ‘how much is too many?’ Most of us are familiar with the concept that lenders looking at a credit record showing multiple applications may - quite rightly - view this as a sign of someone desperately seeking credit. As this is rarely the sign of a good potential client, many lenders will turn this applicant down on principal.
But how much is ‘too many’ when it comes to applications. Lenders will obviously vary, according to their criteria, but a flag usually goes up if more than four applications have been made at any one time. If the applications are spread across a period of months, the lender will be more lenient.
Another factor that people misunderstand about their credit rating is how much stability affects their core rating.
When you apply for credit - be it a mortgage, a credit card or a personal loan - the lender wants to know more than anything that you will be able to repay. The greater the risk perceived, the higher the interest rate charged, which is why bad credit loans can be so expensive.
Factors affecting this can be whether you are married - a sign of committment - whether you are registered as a voter, how many times you have moved house and even how many times you have moved job.
Someone who is seen as high risk is not necessarily someone with a history of missed repayments and ccjs, but maybe someone who has jumped from job to job, moved house or town many times and generally shown a lack of stability.
So, if you’re wondering why you weren’t offered the best rates available on the loan you wanted, you may need to look deeper than you thought.
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Mon 8th Sep, 2008
Posted in Bad Credit, Consumer Credit, Personal loans, Homeowner Loans, Banking, UK Finance, mortgages, Consumer debt, Homeowners, Property, Unsecured loans, Financial news, Housing news, Borrowing, Personal debt, Secured loans, Bankruptcy, Missed payments, House repossession at 11:39 am by admin
In surprise news this morning, the US government has announced that it will bail out America’s two largest lenders, Fannie Mae and Freddie Mac.
Whilst this may seem far removed from the daily grind of most people’s lives, the effect of this action will have far-reaching implications around the globe and already has seen a positive affect on global stock markets.
Most UK homeowners will have never heard of either company, but together they are the largest holders of home loans in the world and as the saying goes, ‘when America sneezes, the rest of the world catches a cold’. In the last year they had been suffering unsustainable losses, as the American home loans market went into freefall and this was a large part of the credit crunch being felt by all.
Once confidence was lost in America, Asian backers stopped investing funds and the resulting lack of liquidity on the loans market has meant that everything from business loans to small personal loans has been affected by a lack of funds to be lent.
With this move - long overdue according to finance pundits - investment into America is likely to restart from healthier financial markets which experts hope will begin to halt the recession which is threatening to sweep the world.
What does this mean to the average borrower? Well, funds are unlikely to rush into the market instantly, but finance is a fast moving beast and so hopes are high that relief will be imminent for Western business and individuals. Particularly in America where an estimated 9% of homeowners are behind in loan repayments, risking repossession, bankruptcy and long term bad credit.
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Thu 4th Sep, 2008
Posted in Bad Credit, Consumer Credit, Personal loans, Homeowner Loans, UK Finance, Credit Card, mortgages, Consumer debt, Homeowners, Property, Unsecured loans, Financial news, Housing news, Borrowing, Personal debt, Secured loans, Debt management, Missed payments at 1:46 pm by admin
Yesterday the government announced what were intended to be some sweeping measures designed to rescue both the housing market from its freefall.
The measures included helping out beleaguered homeowners who had fell behind on loan repayments; offering equity loans to buyers and giving a stamp duty holiday under a new threshold.
So far most commentators on the new schemes have been singularly unimpressed, particularly financial advice site, Moneysupermarket.com.
“The Government plans are certainly high on rhetoric, but lacking in fundamental help,” claimed Louise Cuming, head of mortgages at moneysupermarket.com.
Cuming states that some factors of the scheme are not just unworkable, they also encourage financial irresponsibility by bailing out homeowners who have dragged themselves into debt.
The view that the ‘British Debt Mountain’ is the fault of irresponsible lenders is a popular one in some quarters. Many have claimed that the vast amount of personal loan and credit card debt is due to lenders pushing ‘easy credit’ at borrowers who had little chance of repaying.
Cuming also points out that the plan for offering buyers 30% equity loans is also unrealistic: “this is simply a rehash of the tired old share equity story,” she says.
“This will inevitably only help a fortunate minority as it is co-funded by government and developers, and thus only available on an insignificant number of properties.”
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Tue 2nd Sep, 2008
Posted in Bad Credit, Consumer Credit, Personal loans, UK Finance, Consumer debt, Financial products, Unsecured loans, Financial news, Borrowing, Personal debt, Secured loans, Debt management at 11:27 am by admin
One of the most common questions asked here at Interfinancial is “Do you charge a fee?” Many customers come looking for a personal loan but are - quite rightly - wary of paying a Finder Fee before they see the goods.
So, what are these fees and why is it so hard to find a loan these days without stumping up hard cash first?
For many customers, the loan is their lifeline: They have a limited income that seems to either being going out faster than it comes in, or they need cash ASAP to cover an unexpected bill. The last thing they can afford is yet another outgoing.
Believe us, brokers do understand that when you need money, you’re not looking to spend it. However, it’s not just customers who have had to adapt to the global credit crisis; the loans market has changed a lot too.
With fewer loan products available and lenders getting increasingly picky over borrower criteria, we’re working harder than ever to find you that loan. We spend alot of our time checking paperwork, answering questions and searching the market - which increasingly means checking the small print - just to get you quotes.
With so many customers shopping around to get the cheapest loan deal, we’ve always had to stay competitive, but we can only offer the deals that are out there. Many customers have unrealistic ideas about the deals they can get - especially when they are seeking a bad credit loan.
Whilst we don’t expect every enquirer to take us up on our quotes, we do find that we’re spending a lot of time looking for loans for people who don’t realise that cheap bad credit loans are not available from every lender like they used to be.
So, we hope you’ll understand that these fees are not just about us taking your hard-earned cash. We just want to make sure that you’re as serious about loans as we are.
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Fri 29th Aug, 2008
Posted in Consumer Credit, Personal loans, Homeowner Loans, UK Finance, Savings, Homeowners, Financial products, Spending, Property, Unsecured loans, Financial news, Housing news, Borrowing, Car finance, Secured loans, Home Improvements at 12:47 pm by admin
Reports of a new study done by the Halifax building society puts paid to the idea that Britain is a nation of spend-now, think-tomorrow shoppers, forever borrowing to fund their lifestyle.
The annual Halifax Home Improvement Survey is part of a series of studies undertaken by the Halifax over the last 17 years. This year’s results show that only 5% of people looking to improve their home are taking out a loan to do it.
This may come as a surprise to lenders and brokers, as Home Improvements is the top reason given for taking out a loan. So are many applicants lying?
People are not obliged to use their borrowings for the purpose stated when taking out a personal loan (unless it is for specific finance, like a house or car), so it’s possible that applicants feel that they will be more likely to get the cash if they sound responsible.
The figures show that more people in the 18-34 age group were likely to take out a loan (12%) than the national average, and regional differences come into play too. Despite being the biggest savers, people in Northern Ireland were more likely to take out a loan than those living in London, who saved the least.
As many as 43% of homeowners questioned believed that their improvements would add at least £5000 to the value of their home, and a further 12% believed that the value added would be from £10,000 to £25,000. Homeowners clearly feel that they are using their savings wisely, a picture contrary to the one painted by much of today’s media.
Tony Wilcox at the Halifax commented: “This research contradicts the buy now pay later culture which is so often thought to be prevalent in the UK. The fact that the vast majority of people have saved in advance of spending is extremely encouraging. Using savings for such improvements means savers are really seeing the benefits of putting money aside.”
However, whether these figures paint an acurate picture of Britain today or just an acurate picture of those using the Halifax is another thing. There is no doubt amongst the lenders and loan brokers of Britain that the home improvement loan is as popular as ever.
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Thu 28th Aug, 2008
Posted in Bad Credit, Consumer Credit, Personal loans, Debt Consolidation, Homeowner Loans, UK Finance, mortgages, Remortgaging, Consumer debt, Homeowners, Financial products, Property, Unsecured loans, Financial news, Housing news, Borrowing, Secured loans, Debt management, Missed payments, House repossession at 12:29 pm by admin
An increasing number of households owned on bad credit mortgages are facing repossession as they make late loan repayments.
According to figures out from Standard & Poor, nearly a quarter of all bad credit home loans are now in arrears - many by as much as 90 days. This is up from 22% in the last quarter surveyed and now officially at a record level.
Comparison website Moneysupermarket have commented that this situation is of course attributable to the credit crunch, as nearly all homeowners have been faced with increased interest rates. For families who were already on a higher than average rate, a price rise can make it impossible for repayments to be met.
Additionally, the tighter lender criteria now in place across the loans market has made it nearly impossible for families to find cheap loans when a fixed rate deal comes to an end.
With fewer loan products on the market and many lenders pulling out of the sub-prime loans market, borrowers are having real difficulty in finding a bad credit loan at a price they can afford.
With reports on an increasing number of repossessions taking place and uncertainty in the jobs market, UK debt charties are bracing themselves for floods of enquiries. As colder weather sets in and fuel requirements rise, more families are likely to be plunged into the cyle of bad debt.
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Tue 26th Aug, 2008
Posted in Consumer Credit, Personal loans, UK Finance, Credit Card, interest rates, Consumer debt, Spending, Unsecured loans, Financial news, Borrowing, Personal debt, Store cards, Secured loans, Debt management, Budgeting, Missed payments, Overdrafts at 12:16 pm by admin
People are making a number of fundamental errors in handling their finance according to Moneyfacts, the comparison website.
It advises people to tackle their bad finance habits in order to stay afloat during these tricky financial times.
One of the worst habits is that of living beyond your means. This fatal flaw is going to see huge numbers of UK adults sinking under unmanageable debt in coming months. People who regularly spend more than their income each month are obviously mounting up debts that they can never tackle. Many of these people will end up using credit cards to pay for basic living costs and then taking out personal loans to clear the credit cards. This is a ticking timebomb, according to MyVesta, the debt solutions provider, and they should know.
Another poor habit is allowing yourself too many credit sources. If you hold a handful of cards each with a limit of thousands there’s always the temptation to splurge. Add to this a number of catalogue accounts or store cards and suddenly all kinds of avenues are open for spending on days when your income is all gone. Moneyfacts strongly recommends paying off the cards or accounts with the highest amount of interest and limiting yourself to only a few once the balances are cleared.
Not being aware of your current financial situation is a big step in the wrong direction. Whilst few people know their exact bank balance, it is always wise to have a handle on your rough debt balance. If you haven’t tallied up all the money you owe in overdrafts, hire purchase, credit cards and loans then you’re burying your head in the sand. By being aware of what you owe you remain in control and can decide which bills need clearing most urgently.
Above all, be aware of missing payments. Many creditors see this as a green light to either slap you with a charge or raise the interest rate on your borrowings. Or both! Whilst borrowing may still be fashionable, there’s no point in spending money unnecessarily. Especially during the credit crunch!
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Fri 1st Aug, 2008
Posted in Bad Credit, Consumer Credit, Personal loans, UK Finance, Credit Card, Consumer debt, IVAs, Financial products, Spending, Unsecured loans, Financial news, Borrowing, Personal debt, Secured loans, Debt management, Budgeting, Missed payments at 10:35 am by admin
TDX Group, the organisation behind the Group Debt Index, claim that there has been a significant rise in the number of debt management plans taken out in recent months.
The Group claim that debt management, such as Individual Voluntary Agreements (IVAs) will rise by a further £5 million by Christmas, growing steadily by year end.
Mark Onyett, chief executive of the TDX Group said: “We’re already seeing far higher numbers of consumers struggling with personal debts and the pressure is set to intensify over the coming months.”
The research showed that an increasing number of people with financial problems are finding it difficult to make repayments on loan and credit card debts.
This accords with research showing the house repossessions are steadily climbing and a rise in people approaching debt charities for advice.
Since the start of the credit crunch many people have tightened their belts, but it simply isn’t enough.
Whilst most families are wise enough not to extend their credit with further personal loans, the increases in the cost of living has pushed many families deeply into debt.
Unfortunately, this Christmas could see many families hard pushed to pay their bills, let alone have the festive season of their dreams.
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Tue 15th Jul, 2008
Posted in Bad Credit, Consumer Credit, Personal loans, Debt Consolidation, Homeowner Loans, UK Finance, Credit Card, Consumer debt, IVAs, Unsecured loans, Financial news, Borrowing, Insolvency, Personal debt, Secured loans, Bankruptcy, Debt management, Missed payments at 12:44 pm by admin
The high levels of debt that Britons have built up over the past few years are finally coming back to haunt many households. The impact of the credit crunch is starting to take its toll on borrowers according to experts and it is expected that things are going to get much worse as the year progresses.
The accountancy firm KPMG has said that it is predicting that over 130,000 people are going to be declared bankrupt or enter into individual voluntary arrangements with their lenders. This will be up from the 109,615 who did the same last year.
When people enter into individual voluntary arrangements (IVA) they are allowed to restructure debts such as personal loans, credit cards and hire purchase so that their debts can become more manageable. Monthly repayments are made for a fixed period of time with the remainder of the debt being written off at the end of the period.
It is estimated that as many as 2,500 people have debt in excess of £100,000. In 2007 the average amount owed by individuals entering into IVAs was £50,300.
KPMG found that the average repayment for a loan on an IVA was 38% of debt. The average debtor repaid £19,000 of their debt and as a result £1.3bn had to be written off by creditors.
The high average level of debt indicates just how bad lending has been in the past few years. Most debtors owe so much that they have no realistic way of actually repaying their debt.
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