| RedSofa launches THINK campaign.
Property investment company RedSofa have launched their latest marketing campaign - THINK. This campaign has been designed to highlight the growing trend of homeowners taking out further debt in order to prevent themselves falling into arrears with their existing monthly financial commitments.
[UKPRwire, Sat Mar 17 2007] Taking out further debt, which is usually secured against their home, is not a solution which is recommended, as this can cause further problems, as homeowners struggle to afford the increased monthly payments. By increasing the debt, homeowners just increase their risk of defaulting, and ultimately are more exposed to potentially having their home repossessed.
Research from Moneysupermarket.com has revealed that 28% of UK consumers have consolidated their debt by taking out a personal loan, 8.5 million of the 13 million consumers who consolidated in this way actually continued to borrow further through either their overdraft or additional loans.
Use equity for friend with credit-card debt? Be careful
My friend has several credit-card accounts totaling more than $35,000 in debt. My friend has a steady, well-paying job. But the debt-to-income ratio is too high for the banks, so a personal loan could not be approved and tapping into home equity is out of the question. I have considered using my home-equity line of credit to help, but am very concerned about putting myself into that situation. It's a close friend, but someone whom I have known only for a couple of years. I'm also concerned about how this might appear to family and other friends. I do trust my friend and I want very much to help. I am looking for advice that will really help my friend and still keep me in a financially good position. _ Dan Dear Dan, Your intuition was right on when you became concerned about risking your home and financial well-being to help a close friend.
All About Your Credit Score
A credit score is a number that helps lenders and others predict how likely you are to make your credit payments on time. Each score is based on the information then in your credit report. Why Do Your Scores Matter? Credit scores affect whether you can get credit and what you pay for credit cards, auto loans, mortgages and other kinds of credit. For most kinds of credit scores, higher scores mean you are more likely to be approved and pay a lower interest rate on new credit. Want to rent an apartment? Without good scores, your apartment application may be turned down by the landlord. Your scores also may determine how big a deposit you will have to pay for telephone, electricity or natural gas service. Lenders look at your scores all the time.
RISE OF THE HALF MILLION POUND MORTGAGE
Affluent homeowners who take advantage of lenders' very high income multiple offers must take a long hard look into the future to avoid risking it all, advises broker My Mortgage Direct... My Mortgage Direct joint director Cath Hearnden: "A young professional couple earning a joint income of 100,000 could certainly borrow enough - 500k is not unusual these days - to buy a very desirable property, but should their income drop for any reason things could fall apart very quickly," said Hearnden. "Some couples starting a family may take a career break or have to fund child care which could take a large slice of income. "The relentless rise of property values has led to lenders upping the amount they are prepared to offer to well-off borrowers who can prove they can manage the repayments,but people's lives change and they need to fully appreciate the level of financial risk these deals carry." As average borrowing for new homeowners reaches a record level of 3.31 times annual income, according to the Council of Mortgage Lenders, lenders face increasing levels of criticism for allowing borrowers to overstretch themselves.
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