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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People are being warned to not underestimate the affect bad unsecured credit choices have on future potential secured loan decisions.

According to Confused.com, in the UK the closure of one in five credit card accounts by the provider was due to non-payment – people are getting so far into debt that the lenders are shutting the door on them – and that door can remain shut for a long time.

When you default on a credit card, you receive a black mark on your credit score. If you amass enough of those black marks the banks and building societies will simply see you as too big a risk to lend to in the future.

Joanne Garcia, head of credit cards at Confused.com says: “Credit card users in all regions need to understand how damaging it can be to miss repayments. While it may not seem like a big deal to miss a few payments here and there, credit providers – which include mortgage lenders – leave no stone unturned when it comes to checking a person’s credit worthiness. It they see a history of non-payments it makes it much more difficult to borrow money.”

A door in the face now may mean that you cannot secure a mortgage, a remortgage or a secured loan for many years to come. It takes a long time to rebuild credit scores, but you may need some sensible, safe secured credit much sooner than you can clean your black marks.

So avoid unsecured debt, and if you do have credit cards make sure they are under control. Talk to a financial professional about controlling your finances and looking to the long-term for secured success.

SOURCE: Confused.com, 18/11/09

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The debt problems faced by millions of Brits are still growing – if you want to be rid of your unsecured debt and reduce your secured borrowings then the time to act is now.

Debt charity Credit Action has found that the total UK personal debt at the end of June 2009 stood at £1.45 trillion. And while this has slowed by 1.2% in the last 12 months, debt levels are still at unsustainable levels.

Total secured lending on dwellings at the end of June 2009 stood at £1.22 trillion, which means hundreds of billions of pounds are still owed on credit cards, store cards and personal loans – in fact consumer credit lending grew by £100m in June alone.

Without mortgages, the average British household debt is around £9,240, and this figure increases to £21,480 if the average is based on the number of households who actually have some form of unsecured loan.

This has to be reduced. If you think your debts are getting too much then you need to act now. Talk to a mortgage adviser about turning your unsafe unsecured debt into some form of secured debt. You may want to be debt free, but it takes time to pay off and by turning it into secured finance then you will have more time and space to begin paying off your debts.

The time to act is now – Credit Action says every 10 minutes someone is repossessed, and one person every 4.35 minutes is declared bankrupt or insolvent. This isn’t surprising when you see that £182m is paid in interest in UK daily. So act now before it’s too late and get off the debt pile. With some professional help you can begin creating a debt-free future for yourself.

SOURCE: Credit Action, 31/07/09

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Two fifths of debtors have reduced their non-mortgage debt over the last year as people begin to work off the unsecured excess of the last few years.

Research conducted by moneysupermarket.com has found that whilst more people are paying off their unsecured debt than increasing it, more than half of the UK’s adult population is still carrying an average of £6,956 unsecured debt.

Worryingly, more than a quarter of people in the UK have taken on more debt, with 8% increasing debt ‘a lot’ over the past 12 months. Of those who are still carrying debt, 14% believe debt will always be a part of their life, and they expect to live life in the red.

The good news is that 40% of UK adults have reduced their outstanding borrowings, with 16% claiming to be ‘in a lot less debt now compared to one year ago’.

Tim Moss, head of loans and debt at moneysupermarket.com, said: “Overall, this is positive news. It is encouraging to see that a good number of us are taking active steps to reduce the amount we owe. We have, over a long period of time, become too reliant on too much debt and correcting this was never likely to be an easy process.

“For those who have seen significant increases in their indebtedness over the last year, I would strongly encourage them to go through their household budget ruthlessly, line by line, and identify where outgoings can be cut.”

Those that have begun to reduce their unsecured debts should be an example to those who think they will never be free of credit cards and loans. It can be done, but only if the borrower realises their problems, gets some professional advice and begins saving instead of spending.

Moss says: “Anyone starting to worry about their financial situation shouldn’t bury their head in the quick sand of debt – problems are easier to tackle when addressed early; those in their twenties and thirties should get into the habit of addressing their finances now to avoid financial difficulties later in life.”

SOURCE: Moneysupermarket.com, 28/07/09

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A debt management provider has reported a huge rise in unsecured debt, taken out by desperate people trying to get by during the recession.

EuroDebt reports that unsecured debt for homeowners rose to £38,683.33 in December 2008 from £37.087.36 in December 2007 – that’s, on average, another £1000 of unsecured debt, with ever-rising rates which continue to cripple many people financially.

Kevin Still, director of EuroDebt, says: “We have seen a significant shift in the number of clients who are home owners looking for help from debt management in the last six months. The increase in the average level of unsecured debt for home owners who signed up to our debt management plan is also a concern.

“This is highly indicative of the spiralling debt that families are facing, particularly with the spectre of job losses or loss of income making it hard to see how they can stay on top. Clearly many people are struggling under the current financial pressures, making it more important than ever that individuals take stock of their situation before it reaches a critical point.”

Unsecured debt is dangerous, simply. It has rates far beyond any secured forms of finance, it destroys credit scores and it only puts off the inevitable, rather than giving real answers. If you think you can only get by with a personal loan or another credit card, talk to a financial adviser as soon as you can. There are alternatives to being weighed down by costly, unhelpful unsecured debts.

SOURCE: EuroDebt, 20/02/09

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People in Britain have lent friends and family £16.8bn in the last 12 months but are still owed £4.71bn in unpaid debts.

According to PayPal, many of the ‘unsecured’ loans were handed out because people are struggling to make ends meet during this tough time.

More than a quarter of people asked feel awkward asking for their money back and another quarter say lending or borrowing money has led to an argument with friends or family.

If you are having money troubles, always try and seek professional help to help yourself before you have to rely on friends. Because you might find you have the power to help yourself.

Using your home’s equity to consolidate debt is simple and hassle-free. It’s also safe – secured debt is tied to your home, so the rates are lower and the risks are a lot less than with a personal loan or a credit card.

Also, using your home’s equity means you don’t need your friends’ help. Nothing spoils relationships like money, and during this tough time your friends might be in as tough a situation as you are financially. Talk to an adviser can see what you can do to minimise your debt burden, on your own with your own means.

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

More and more consumers who have debt problems are turning to unsecured credit in an attempt to get by.

PriceWaterhouseCoopers have found that more than one in four people are worried about their ability to repay debts in the future and so are turning to easy-accessible credit.

But the accounting specialist found that very few of the 16% already struggling to repay are considering how to deal with these debts.

One in five respondents in PWC’s credit confidence survey of nearly 4,000 people said they were worried about the shrinking availability of credit.

This is a bad habit that cannot be carried on. People who are in financial difficulty should never use personal loans and credit cards. It might be easy, and it might sort out problems in the short term, but it the long term it only makes matters worse.

Talk to an adviser if you are in trouble. They will give you real options and real possibilities that do not involve more debt. Only secured, safe debt can help you out trouble. Credit cards, store cards and loans will only make the hole deeper.

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