Mortgage lenders of the UK are finally beginning to offer higher loan to value mortgages, so those whose equity was decimated through secured borrowing now have a hope of a cheaper mortgage in the future.

Before the credit crunch, secured borrowing was all the rage. Because borrowing was so cheap and credit so bountiful, everyone borrowed to keep the credit party going. But since then, those who geared themselves up with debt have not be able to get hold of a mortgage because they did not have enough equity left in their home to be considered a prudent bet by lenders.

But things are slowly improving in 2010. According to Moneysupermarket, the amount of 85% LTV products increase by 22% since the end of 2009 and 90% LTV products increase by 11% over the same period. Hannah-Mercedes Skenfield, mortgages channel manager at moneysupermarket.com, says: “Lenders seem to have started 2010 with their doors open and are clearly more open to mortgage lending than they have been for some time.”

This news, coupled with continued house prices increases over the last nine months, means that more borrowers who have been left out in the cold over the last two years now have a chance to get hold of a home loan.

If you have been unable to get hold of a mortgage due to a lack of equity, it might be time to go and talk to a professional mortgage adviser. They will be able to assess your situation now, in 2010, and see whether you would be eligible for a new mortgage.

SOURCE: Moneysupermarket.com, 26/01/10

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The benefits of secured borrowing have been highlighted by new data from Halifax after it found that over the last decade house prices have, on average, doubled.

The data is sourced from the Halifax House Price Index, and despite a fall of more than one-fifth between mid 2007 and mid 2009, house prices increased by more in real terms than in any other decade over the last 50 years. The bank says house prices increased by 105% during the past decade, taking the UK average house price from £81,596 at the end of 1999 to £167,020 at the end of 2009.

Martin Ellis, housing economist at Halifax, says: “The noughties was a significant decade for house prices. Overall, prices increased considerably despite the marked decline towards the end of the decade.

“The majority of towns that experienced the strongest price growth began the decade with lower than average property prices, which provided the platform for bigger price gains. Seaside towns fared particularly well as the attraction of having a home on the coast helped to boost demand.”

So why does this highlight the benefits of secured borrowing? Well, proof that house prices doubled confirms that many people have more assets than they think. And while it is foolhardy to think that house prices will rise anywhere near this much in the next decade, houses are currently holding their worth and that amassed equity is safe for now.

To see if you could take advantage of this massive leap in prices you need to talk to a secured mortgage adviser. They can help you assess how much your home is worth and what you can do with your biggest asset. Amassed equity should only ever be spent wisely, so talk to an expert before you unlock any of your most prized asset.

SOURCE: Halifax, 27/01/10

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Experts have warned that store cards and credit cards are not offering borrowers a good deal and are designed to encourage overspending rather than sensible money management.

Website Moneyfacts.co.uk is calling for more transparency and control of credit and store cards and has even gone to the Government to call for a better deal for consumers on credit and store cards.

Samantha Owens, principal consultant for banking and economic insight at Moneyfacts, says: “Credit cards form an integral part of the financial services industry and allow customers to transact with convenience, reassurance of safety and added consumer protection. But credit cards also come with the risk of a greater temptation to overspend. It is one of the most expensive forms of credit and has little or no structured repayment mechanism.”

Moneyfacts says there is a real problem with customers’ understanding and while more can be done to educate credit card users. People are too quick to take on unsecured credit without being aware of the consequences.

The website is right – easy unsecured debt encourages people to spend without teaching them the consequences. While a carefully managed credit card can be to your advantage and can be a useful way of making the most of your money, it is easily misused and will get you into debt trouble quickly.

If you are worried about your unsecured lending there are secured options out there to help you. Talk to a financial adviser about what you can do to steer clear to unsecured credit and improve your finances securely and sensibly.

SOURCE: Moneyfacts, 21/01/10

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An estimated 12 million Brits are funding their day to day spending through their credit card balances, creating more debt problems for themselves in the future.

According to the Post Office, 38% of all Brits intend to use their unsecured debt in January for daily purchases such as grocery shopping. It says reflects the extent to which the recession impacted on people’s finances during 2009, with many more set to suffer financially well into 2010.

Unsurprisingly, 2.6 million people expect they will end up spending more on their credit cards this January compared to January 2009. And it’s not just in January when people believe they will feel the pinch – a further 3.3 million expect they will up their unsecured borrowing overall in 2010, with 3% planning to take out another credit card or increase their credit limit.

When it comes to repaying credit, almost half of all credit card holders have no plans to pay off their credit card bills in full each month and six per cent will only pay off the minimum amount. A further one in five believe it will take them over a year to pay off their unsecured debts.

Az Alibhai head of lending at the Post Office says: “The continued trend for people to rely on their cards for basic day-to-day purchases is a concern. Whilst the recession has left many with no choice, these debts build up quickly if not paid off in full each month, and can be extremely costly over time when interest is added.”

The worst debt you can have is spiraling unsecured debt. By consolidating your credit card balances into secured debt you can reduce your outgoings, improve your credit rating and give you some time and space to start getting back into the black.

SOURCE: Post office, 20/01/10

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You may be able to handle all your secured debts without any risk of defaulting but would your family be able to cope with the debt responsibility without your income?

The average household with dependent children has £91,648 still outstanding on their mortgage now compared to £88,500 last year, according to Scottish Widows. And when it comes to short term debt, the average household with dependent children has carried over £8,653 over the last three months.

These debts may not be huge and are certainly manageable with a good income, but what happens if you get sick for a long time? Or what happens if you are involved in an accident, need surgery or have to care for a sick family member? What happens if you die? Could your family take on the long and short term debt alone?

Millions of households are leaving themselves at risk of being unable to survive financially if one of the bread winners become unable to work – but Scottish Widows says 62% of Brits have not protected themselves for the long term should the worst happen and they lose their household’s main income.

Clive Allison, protection director at Scottish Widows, says: “Nearly half of families with dependent children now rely on two incomes to maintain a decent standard of living, and as our stats show, this isn’t likely to ease off any time soon. For many families, sacrificing half their income when they have children is a luxury they just can’t afford.

“People are leaving themselves exposed to a lack of income should anything happen to the main breadwinner, and large personal debt to repay on top of this could make things even more difficult. Families need to make sure they protect themselves financially so if they do get into difficulties they have the vital back up in place to look after their families and loved ones.”

SOURCE: Scottish Widows, 18/01/10

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More people are coming to retirement and realising that they simply cannot afford to fund themselves for 20 or 30 years – for them the answer may lay in unlocking their home’s equity.

Retiring is becoming more expensive – the average retired household needs to find up to £429 extra a year to cover an increase in their cost of living, according to MGM Advantage.

It has found that the annual average household expenditure for a retiree is estimated is £23,106 and £14,926 where they are aged 75 and over. While a good pension may cover most of this it may not cover all of it, and it may not cover all of it after a long retirement.

Aston Goodey, sales and marketing director of MGM Advantage says: “Many retired people have had to endure a rise in their cost of living. This, coupled with the fact that people are generally living longer is placing considerable pressure on retirement income. All the more reason to seek financial advice to ensure you achieve the best possible income in retirement.”

By using some of the equity in your home through equity release, you can add to your pension pot and you can cover shortfalls during retirement. You do not have to use all of your equity and it needn’t cost you a lot to take on the responsibility but it will aid your retirement and make your finances work during your final years.

SOURCE: MGM Advantage, 13/01/10

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If you are thinking of moving your credit card balance to a new credit card think again – consolidation may be a better option for many people facing spiraling debts.

More than 4.5 million Britons are planning to move in excess of £3.2bn pounds between credit cards in the first three months of 2010, according to Santander. While the research found that cardholders planning a balance transfer in the New Year will transfer an average sum of just £1,140, compared with £2,290 in 2009, people could still be walking blind into greater adverse debt problems.

Moving debt to another credit card just prolongs the inevitable. It might mean low rates for a while, but once the introduction periods have passed, credit card debt is double-digit rates of interest and the risk of worsening credit ratings and harsh penalties and fees.

But by consolidating the debt using a secured loan, all that can be avoided. Consolidation means lower rates of repayment and less risk to credit ratings. It also has long-term benefits – as your house becomes more valuable, your debt diminishes.

Of course consolidation is not right for everyone, and admittedly moving to another credit card is an example of pro-active financial management. But to be sure, and to assess all your options, talk to a financial professional. They will give you an impartial and fair opinion of what’s best for you, in the short and the long term.

SOURCE: Santander, 02/01/10

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Too many people have battled with debt without taking stock and seeking out some professional loan advice.

In fact, over a quarter of householders in the UK are suffering mental anguish and depression due to housing cost worries, with over two million households finding meeting housing costs a constant struggle, 400,000 of whom are specifically falling behind with rent and mortgage payments, according to Co-Operative Insurance. 

And with the festive season now upon us, households will face increased financial pressures with additional seasonal costs contributing to householders money worries. People will be tempted to pile on debt and take on short-term solutions to get by into the new year. But this will only increase problems later on – debt needs to be dealt with professionally and responsibly, with a mind to long-term improvement.

James Hillon, head of home insurance at Co-operative Insurance says there are still many families, couples and individuals who are at risk of repossession or eviction around the UK particularly at Christmas – if debt is left to languish, your home will be at risk.

Don’t struggle on, week in week out with debts and risk losing your home. 2010 needn’t be like 2009 – talk to a mortgage professional about your loan and mortgage problems. They might be able to solve all of them, but they can go far in helping you get on the right track and can make sure you have a much better chance of holding onto your home next year.

SOURCE: CIS, 03/12/09

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Most Brits still take the view that once they reach retirement, their home will provide for them – although this might be the case for some, it is better to err on the side of caution and ask a financial adviser about your long-term financial potential.

According to a report by LV=, the over-50s homeowners they surveyed believed that an average of £27,250 has been wiped off the value of their homes, when in fact over-50s homeowners have lost £80bn overall in property value due to recent housing market falls.

This is a concern when the insurer says 1.3 million people still plan to use their property value to help provide retirement income. Only 2% say have been turned off the idea of using their home to fund retirement, while a further 11% plan to take advice on unlocking the value of their home before they retire.

The new research also highlights the impact of the long-running house price boom on pension savings behaviour among over-50s homeowners now nearing retirement – people assume their home will provide for them but as any good adviser will tell you, assumption is a dangerous thing.

One in eight people have consciously saved less into traditional pensions because of the perceived spiralling value of their home and a further 13% say they couldn’t afford to buy their own home and invest in traditional pensions, because property prices were so high.

We are all getting older, living longer and saving less – this is a bad concoction and will lead to many people being unable to do what they want to do in their later life.

However, many enterprising over-50 year olds have plans to recoup some of their lost equity and make the most of their property. One in six will make home improvements to add to the value of their house, and one in five say they will save extra money wherever they can. Nearly a third say they will simply bide their time for property prices to recover.

Vanessa Owen, head of equity release ay LV= says: “In a matter of months millions of pre-retirees have seen both their property and pension fund values battered. House prices still have some way to go before full recovery but with increases for six consecutive months now, and Brits are feeling more confident that their home can still play a big part in helping to finance their retirement.”

To find out how your home can help your retirement, and to find out what else you can do to fund your later life talk to a financial adviser. They will tell you the truth, lay out all your realistic options and do everything they can to make your retirement successful

SOURCE: LV=, 01/12/09

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Many people think it is the banks that are the bad guys but they are wrong – complacency is the secured mortgage borrower’s worst enemy.

You may have had a first charge and a second charge mortgage for some time now and might be paying your bills each month. For some people it might be tough, but most people manage to make ends meet at the end of the month.

But then you might be spending more on your credit cards, or you might be missing payments on things like unsecured loans or store card bills – letters pile through the door and things get missed. Things get left until a better time and some demands can be ignored.

You may wince every time you pop your credit card into the reader, but if you are given the green light by the shop you breathe a sigh of relief and forget about the state of your credit, preferring to enjoy your purchase.

You might have even moved over to your secured lender’s higher variable rate unwittingly. You might have begun to pay more each month than you previously have done and don’t even realise it – most of us have a dozen or more direct debits attached to our current accounts and let’s face it – how often do you even check your balance?

It is behavior like this that leads or debt, arrears and serious financial problems. If you are not on top of all your finances you may be amassing penalties and fines without even knowing about it. You may be sullying your credit score and making yourself black listed from future secured lending while you carry on, oblivious.

If you have a mortgage, a secured loan or any other financial responsibility you have to stay on top of things. That means regularly checking your current account, regularly checking your credit score and regularly making an assessment of your monthly budget. It means visiting your adviser regularly and allowing them to check your finances and it means always doing all you can to save each month.

Complacency is a borrower’s worst enemy. Only you can make sure your finances are as good as they can be – and if you don’t take that responsibility then it is you that will suffer in the long term.

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