Brits are stretching their budgets by more than £40bn a year, according to new research – if you are stretching your budget every month it might be time to consider some safe secured finance.

According to GE Home Money Home Lending, 77% of adults have set themselves a monthly spending limit but of these, 60% said they go over their budget every month, with an average over-spend of £154. One in twelve admitted to exceeding their budget by more than £300 per month.

But some people are doing their best to only spend what they can afford – the research found that 29% of people manage to stick to their budget, while 11% spend less than their budget. So it is possible to keep your finances under control but for some it might be harder than others.

Chris Tapp of Moneybasics.co.uk says: “It is heartening that millions of Britons set themselves a monthly budget but the regularity with which they exceed these limits is extremely worrying. Easy access to cheap credit has conditioned many to believe it doesn’t matter if they spend too much as they can always borrow to meet any shortfall. Sadly it is this type of thinking that has trapped thousands in a cycle of misery and debt.”

If you are one of those who can’t keep to the budget, talk to a professional mortgage adviser about using some of your home’s equity to safely and sensibly get your finances under control. The days of easy credit are long gone, but good, well-sourced credit is still a perfectly viable option.

SOURCE: GEMHL, Moneybasics.co.uk, 15/04/10

To keep up with the latest news and comments on current financial affairs please visit the Secured Loan Blog

If you are having problems handling your secured debt then it might be worth doing some homework online to see what you can do yourself to get to grips with your debt.

There are a world of websites out there for those who are indebted – information services, debt management websites, Government help, charities and of course professional financial advisers.

And people are starting to see the benefit of seeking out help online – 150,000 people used the Consumer Credit Counselling Service’s online support, many of whom were under 40. The figures also found that more women than men use CCCS Debt Remedy which could be evidence that women are more open with their problems and more keen to get to grips with them.

Paula Searle, head of e-services at CCCS says: “The higher rates of online debt counselling users in any particular category is likely to be a combination of need for help with their debts and general internet usage.”

Good advisers like The Mortgage Broker pack their websites with information – they understand that people want to do all they can on their own terms to understand their debt problems and work out ways in which they can make life easier for themselves. Only then, when they have their own tools should they seek out some help to take that next step towards managing and reducing their secured debts.

SOURCE: CCCS, 09/04/10

To keep up with the latest news and comments on current financial affairs please visit the Secured Loan Blog

You might see your home as your pension, and it is true that your equity can be used to help you fund your later years, but you can never bank on your property alone – you need to speak to a financial adviser about your future plans sooner rather than later.

People pinning their retirement dreams on downsizing their property or using their existing equity will be in for a shock. They might find that they do not have as much equity as they think and they will certainly underestimate how much you need to comfortably see yourself through your retirement.

According to Standard Life, a combination of a fall in house prices and annuity rates has dealt a double blow to many, with the average pension pot from downsizing only providing £43.50 a week income. It says banking on downsizing your home or using a secured loan to generate sufficient income is a potential retirement disaster unless you have also made provision elsewhere.

Andrew Tully, senior pensions policy manager at Standard Life says: “Our recent research shows many people are still pinning their hopes on using property to generate their retirement income, favouring this asset class over savings accounts and pensions.

“However, our analysis shows many people need a reality check to get their long-term financial planning back on track. The old adage of not putting all your eggs in one basket has never been more appropriate.”

Talk to a financial adviser about your long-term plans. They will show you that while your home is an important asset, you need to do more – that means increasing savings, making sure to do all you can to reduce debt and thinking about pension provisions. Home equity will play a crucial role in many Brits’ retirement plans, but people have to have more provisions set aside.

SOURCE: Standard Life, 07/04/10

To keep up with the latest news and comments on current financial affairs please visit the Secured Loan Blog

New figures have revealed that Brits are returning to their borrowing ways – at the end of last year, the UK population was borrowing 62p for every pound that they saved from both their homes and their credit cards.

According to the research by Unbiased.co.uk, by the end of 2008, the public were conscious of their debt levels and working hard to repay what they owed, with £1.68 being repaid for every pound they saved. But these virtuous repayment habits of 2008 failed to continue, with the borrowed amount creeping higher by the start of 2009 and increasing throughout the year.

Overall in 2009, Brits borrowed a staggering £28.2bn worth of non-mortgage debt with only £71.6bn being saved. People are once again turning to short-term solutions to help them get through the month. The rest of the borrowing came from safer equity release, but this is still proof that people are not listening to professional financial advice when it comes to saving and borrowing.

Karen Barrett, chief executive of Unbiased.co.uk says: “While we may be officially out of recession, these latest figures highlight that consumers are back behaving as they did before the onset of the credit crunch, even though the economy is still not back to full strength. This trend of lower savings levels highlight a real concern for the public’s future financial well-being, especially as these falls in savings levels haven’t resulted in the public paying off an increasing amount of their debts.

“While many believe we are over the worst, there is still a lot of consumer confusion out there right now, and it is vital people seek professional advice from a financial adviser to enable them to strike the best balance between borrowing, saving and other aspects of their finances throughout these difficult times.”

SOURCE: Unbiased.co.uk, 01/04/10

To keep up with the latest news and comments on current financial affairs please visit the Secured Loan Blog

The tough economic environment has meant many people have put off those expensive buys but it might be getting to a point where you need, rather than want, to pay out a big purchase – and it might be time to use your home’s equity to get by.

One such big expense might be a car. You may have gone through the last year or so crossing your fingers each morning, hoping your old car would not die. But sometimes you have to admit defeat and seek out a newer mode of transport. But you are not alone – the latest figures from the Sainsbury’s Finance has found a sharp increase in the number of people planning to buy a car in the six months to August this year.

It has found a 47% increase in the number of people planning to purchase a brand new, used or pre-registration car. 7.56 million people anticipate doing so between March and August this year compared to just 5.14 million people in the six months to February 2010. Sainsbury’s says this is a collective spend £49.1bn in the coming six months.

That’s a lot of money. For most people, finding maybe £5,000 or even £10,000 to buy a car might be a stretch. Steven Baillie, head of loans at Sainsbury’s Finance, says: “There are obviously concerns that continued financial instability as well as uncertainty over the coming election will put people off buying new or used cars.”

But in this day and age a car is a necessity and without it your life would be impossible – getting to work, getting the kids to school, getting to the supermarket – it’s a big spend, but it’s a need more often than not.

If you need to splash out thousands in the next few months, talk to your broker about using some of your home’s equity to fund your new car. It’s a sensible way of raising much-needed money and it needn’t cost you the earth to pay it back.

SOURCE: Sainsbury’s Finance, 30/03/10

To keep up with the latest news and comments on current financial affairs please visit the Secured Loan Blog

New figures have revealed that secured loan lenders has slumped in the first months of 2010 – but that is no reason why you shouldn’t consider a second mortgage to help you manage your finances.

According to the Finance and Leasing Association, secured loan lenders lent just £27m in January of 2010, a 27% reduction in lending compared to December 2009. It also found that over the last year second charge mortgage lenders lent just £339m, an 82% reduction on a year earlier.

Fiona Hoyle, FLA head of consumer finance, says: “We have seen a slow start to the year in terms of new business, but affordable credit will play an important part in supporting the economic recovery in the coming months.”

There was also some very good news within the figures – direct unsecured lending was down 52% in January across the UK – so while less people opted for secured loans less people saw the need to increase risky unsecured lending also.

While the market for secured loans is certainly muted, there is still money being lent through second charge mortgages. That’s money that has gone towards debt consolidation, home improvement and sensible investment – all of which has improved hundreds if not thousands of people’s financial situation.

If you think extra money taken from your remaining home equity could help your financial situation, talk to a mortgage adviser about the benefits of secured loans. They are not for everyone, but for some they could be the answer to all their prayers and problems.

SOURCE: FLA, 26/03/10

To keep up with the latest news and comments on current financial affairs please visit the Secured Loan Blog

More people are still using short-term credit card debt as an answer to their financial problems when instead they should be looking to long-term solutions.

The latest Bank of England figures showed that borrowers owed a combined £61.5bn to credit card companies in January. That’s an increase of £300m in just a month.

But how can you get out of the cycle? Every month the repayment rate is high, your other debts and responsibilities do not go away and there is never enough money to begin really getting on top of the credit cards.

That’s why you need to consider a secured loan if you are struggling to handle the credit card debt. By consolidating the debt onto your mortgage you exchange double-digit rates for single digit rates, and you take the pressure off the rest of your finances. That allows you to pay down any other debts you may have and gives you space to save money for the long term.

A spokesperson for debt management company Gregory Pennington said: “Credit card debt is a growing problem for many people, and it`s vital that anyone struggling to repay their debts seeks independent debt advice.”

SOURCE: Gregory Pennington, BoE, 05/03/10

To keep up with the latest news and comments on current financial affairs please visit the Secured Loan Blog

Some people spend all their lives managing debts, but it needn’t have to be that way – with the help of a professional adviser you can clear that debt and start saving instead of spending.

Credit card debt in particular is very expensive to manage. According to Defaqto, with a typical APR and minimum payment plan to pay off a £1,000 credit card balance would take nearly 15 years at 9.9%, 21 years at 15.9% and more than 37 years if the rate was at 20.9%.

David Black, banking specialist at Defaqto, says: “The dangers of making low minimum repayments cannot be emphasised enough. Someone making a minimum 2% monthly repayment on a £1,000 balance on a credit card charging 20.9% APR would take 37 years one month to clear the balance.”

It doesn’t help that many credit cards demand you pay off the cheapest purchases first, leaving the bigger, more expensive payments stuck on the card – simply, there is no upside to credit card debt.

So get out of the credit card debt cycle and talk to a professional adviser about moving all your debts onto a secured loan. By using your home’s equity you can be free of the burden of debts with huge repayment rates and instead enjoy one, affordable rate that will give you the time and the space to finally save instead of just spend.

SOURCE: Defaqto, 18/03/10

To keep up with the latest news and comments on current financial affairs please visit the Secured Loan Blog

If you feel like your finances are on a knife edge and that any loss of earnings or any added financial burden would send you over edge, then you need to consolidate the debts before it is too late.

According to Callcredit, one in four people between 35 and 44 years say that a drop of just £300 in monthly income would cause them to default on their mortgage payment. This is simply not enough of a cushion and means millions of Brits are up to their necks in debt.

The research also showed a noticeable reduction in the proportion of people paying off their credit card bills in full each month with one in twenty people who previously paid their bills in full now paying just the minimum or a fixed amount.

Graham Lund, managing director of Callcredit says: “These statistics are extremely alarming. A significant proportion of people, many of who may have families to support, are living on a financial precipice, where just one negative event, such as a reduction in paid overtime or an unexpected expense could have disastrous financial consequences.”

If you are on the edge, talk to a mortgage professional. They can help you find ways to use your home to ease your burden – by consolidating your debts into your home’s equity then you can give yourself some room to pay off credit card and personal loan debt rather than just manage it. You can also give yourself a bigger buffer than £300, so if something does happen, you can be safe in the knowledge that your finances will remain stable.

SOURCE: CallCredit, 12/03/10

To keep up with the latest news and comments on current financial affairs please visit the Secured Loan Blog

One of the biggest problems people with multiple debts face is being able to actually pay off the debt while managing the interest – indebted borrowers don’t have the freedom to pay off their debts.

Car loans, personal loans, mortgages, credit cards and store cards on top of all of the other bills life throws you mean you do not have much money to actually save and pay off the debt – many Brits are therefore doomed to a life of continuing debt.

If you can manage the demands each month this isn’t necessarily a problem, but if you suffer a loss of earnings or are hit by an unexpected payment then you may find you miss a payment on one of your debts and then you could be in real trouble. One missed payment means a fine, a penalty charge or an increase of a rate – then all your debts are at risk as your outgoings suddenly increase.

The only way to solve the problem is to get some space and time to be able to save money and actually work off your debts. That can only be done by consolidating your debts into one, affordable loan – a secured loan.

By using your home’s equity to consolidate debts you reduce the number of interest rates you have to service considerably – and because the one debt is secure, that rate is lower. So from many high rate payments to one, low payment means you have room to save and pay down the secured loan in good time and you reduce the chance of losing control of your finances.

So if you feel like your debts don’t give you room to breathe, talk to a mortgage adviser about using your home to give yourself some freedom.

To keep up with the latest news and comments on current financial affairs please visit the Secured Loan Blog