Finance: UK debt becoming a cause for concern

UK debt becoming a cause for concern

Written by Richard Green

The UK attitude toward debt has received a major shift over repparttar

past few years. Where once repparttar 143942

UK was seen as a nation that held up thrift as being virtue and considered debt a vice, it has now changed to owing £1.3 trillion on mortgages, credit cards and other loans. The main cause of this growth in debt is repparttar 143943

British obsession with house ownership, making up 80% of repparttar 143944

borrowing. Figures for repparttar 143945

number of repossession orders granted in repparttar 143946

first three months of 2005 have reached nearly 26,000, which is repparttar 143947

highest figure since 1995.

The Consumer Credit Counselling Service (CCCS) reports that calls from people worried about debt have been increased by 50% compared with last year. The Chairman of repparttar 143948 CCCS, Malcolm Hurlston, said: "The consumer is spending less and repaying less. There are early signs here that repparttar 143949 whole consumer-driven economy may be moving into lower gear.” In repparttar 143950 past, homeowners have been repparttar 143951 main victims of previous recessions due to their reliance on credit, however, this time it seems repparttar 143952 young are most at risk. "We are seeing lots of younger people coming to us for help," said Frances Walker, from repparttar 143953 Consumer Credit Counselling Service ( http://www.cccs.co.uk/ ), "They are often very heavily in debt as they have been able to borrow far more than in repparttar 143954 past. The trouble is they have no assets, so when they get into difficulty they have nothing to fall back on." It is not only repparttar 143955 young who are being affected however, as repparttar 143956 number of houses exchanging hands each month is gradually decreasing, and high street sales are poor – traditional signs that consumers in general are beginning to suffer. With a number of repparttar 143957 UK’s main lenders, including Barclaycard, HSBC, HBOS and repparttar 143958 Royal Bank of Scotland, recently being warned about bad consumer debts, it seems that consumers need to take on more financial responsibility for themselves, rather than relying on repparttar 143959 providers to protect them.

Flexible Mortgage Guide

Written by John Mussi

Here is a useful flexible mortgage guide. Flexible mortgages are loans which allow you to increase or decrease repparttar

size of your repayments within certain limits. This type of mortgage is relatively new.

Flexible mortgages come in all shapes and sizes. The most basic flexible mortgage runs along similar lines to a standard mortgage but with a few extra facilities such as repparttar 143941 calculation of daily interest, repparttar 143942 ability to make underpayments, overpayments and payment holidays.

The interest rate can be discounted, fixed, capped or variable, but has repparttar 143943 big advantage that it is calculated daily or monthly instead of annually. This means that any capital repayment of repparttar 143944 loan will affect repparttar 143945 interest charged on repparttar 143946 outstanding balance immediately. By making regular overpayments, repparttar 143947 interest saved on repparttar 143948 mortgage over repparttar 143949 term can be quite significant.

Interest is usually calculated on a daily basis, so as soon as you have made a payment you are reducing repparttar 143950 interest payable. By having repparttar 143951 ability to make further payments means that by just paying a little extra every month could save you a tidy sum in interest costs.

Also, most lenders will allow funds to be drawn from repparttar 143952 account up to repparttar 143953 original mortgage balance or even allow payment holidays.

Some flexible mortgages will allow you to withdraw sums you have overpaid into your mortgage account to help deal with emergencies.

Being able to do this may help you cope with repparttar 143954 changes in your income or spending, and to reduce your outstanding commitments without penalty if you get a bonus.

Many self employed people whose income varies from one month to repparttar 143955 next find these products helpful. They can make overpayments when earnings are at repparttar 143956 annual peak, and cut their payments when earnings fall again.

Flexible mortgages are most suitable for people who have irregular incomes, or who are expecting a period of reduced income, or would like to reduce their mortgage more quickly.

But having a flexible mortgage is not just about repaying your mortgage early. It's also about tailoring your mortgage to suit your lifestyle. All flexible mortgages allow overpayments and most will allow you to make underpayments when finances are tight. They may even allow you to take repayment holidays – a complete break from making payments as long as a reserve amount of money is in your account.

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