Bad Debt Mortgage

You might have spent the last year or two struggling with debt on a daily basis – but are you still in denial as to how serious your sub-prime mortgage debt is?

According to R3 Insolvency, a third of those with debt problems have not told their family or partner and a further 19% can’t even face opening their bills, while 21% said they ‘didn’t know where to go for help.’

Peter Sargent, president of R3 says: “Here lies the damming spiral of personal debt. Even after a long recession people are still terrified to ‘own up’ to debt problems. Yet this ultimately makes the issue worse – we know there is a group who are not addressing their financial problems and can’t even come clean to partners or family about them.

“In my years as an insolvency practitioner, I have seen many cases of people coming into my office with unopened bills. We need to break this cycle of fear. Even people who do seek advice usually delay six months in doing so.”

Simply, your debt problems will not magically go away and the chances of winning the lottery are not going to get any smaller. While you have your head buried in the sand the mortgage lender is still calling for interest, as are your personal loan and credit card providers.

So get some help. Talk to debt charities, talk to mortgage professionals, talk to your lender and talk to debt managers – just pulling your head out the sand is a big step forward and a massive boost in getting rid of your sub-prime debt problems.

SOURCE: R3, 02/04/10

To Keep up with news and comments on the current adverse credit market please visit the Adverse Mortgage Blog.

It is not just British citizens who have financial difficulties in the UK – many people from other EU countries are struggling with their British debts, and they must seek out professional help too.

The Consumer Credit Counselling Service says it has seen a rise in calls to its helpline from people living outside the country who are struggling to repay their UK debts. During the last decade, credit was so free and easy that those who had emigrated to the UK from the EU were tempted by debt. Also, many Brits have since emigrated themselves and are now struggling to pay back money at home.

The charity says over 500 people with debt in the UK but who live outside the country have contacted the CCCS already this year and 1,691 people called the helpline from outside the UK last year. It says the decreasing value of the pound has meant that people whose incomes are in sterling are using more of it to cover the cost of their living expenses. This then leaves them with less money to repay their debts.

Laura Carver, CCCS helpline manager says: “The decreasing value of the pound is the main reason that those living abroad are struggling to repay their debts.

“We have had people whose income had allowed them to life comfortably abroad, and although that income hasn’t changed, they have been left struggling to make ends meet by the decreasing value of the pound. Many are considering moving back to the UK.”

If you are a foreign national or a Brit abroad but have UK adverse debt problems, talk to a British financial adviser about your special circumstance. In the 21st century moving back home will not stop lenders finding you – and you are still responsible. So get some British help for your British debt problems right away before they escalate.


SOURCE: CCCS, 30/03/10

To Keep up with news and comments on the current adverse credit market please visit the Adverse Mortgage Blog.

Unsurprisingly, new evidence shows that it is those on low incomes who have been hit hardest by the financial downturn – so it is those on low incomes who need to seek out debt advice the most urgently.

According to a report by the Resolution Foundation, low earners have been more likely to have experienced a drop in income than other groups – this was most pronounced amongst the 25-34 age group where 66% reported a fall in income compared to 50% in the benefit dependent group and 33% amongst the higher earning group.

As all adverse borrowers know, any drop in income can be disastrous. With high rates and innumerable debts, every penny counts every month to just get by. So by losing income, mortgages and debts become more at risk of default.

There are 9.4 million low earners of working age in the UK, living on an average household wage of £15,800. Low earners are not the poorest in society and are not in crisis but many of them live close to the cliff edge, spending all their monthly income, leaving no room for savings or safety nets – over half of low earners have less than a month’s salary in savings.

So the need for financial advice now is more crucial than ever, helping those with less make their money go further. Low earners need wealth management too, however small that wealth might be. By talking to a mortgage adviser they may find someone who can help them manage with what they have for longer.

SOURCE: Resolution Foundation, 05/03/10

To Keep up with news and comments on the current adverse credit market please visit the Adverse Mortgage Blog.

You may have been hoping for it, but there have been no newspaper stories suddenly revealing another mortgage boom – the credit crunch has not all of a sudden reversed and it is not likely to for many years. So how do you deal with your mortgage situation?

You may have got a sub prime loan a few years ago, only to find yourself out in the cold now. The lenders all say no and your mortgage has only increased as your house has lost value – what are you to do?

The key is to stay sensible and think of the long term. House prices will not fall forever and eventually credit criteria will ease up to help those with less equity and more of a chequered credit past.

So in the mean time you mustn’t succumb to the temptations of quick and easy credit – personal loans, credit cards and store cards are not the answer. They might help your immediate financial situation, but in the long term they will just add to the debt burdens you are already struggling to hold up.

The days of quick debt solutions are over – banks, building societies, regulators, the Government and financial advisers are all telling Britain that it is time to save and to spend within your means. It will be worth it in the long run – a borrower who saves now and does all they can to pay back their adverse mortgage debt will be the first in the queue when the mortgage lenders begin lending higher loan to value and more credit adverse mortgages.

To Keep up with news and comments on the current adverse credit market please visit the Adverse Mortgage Blog.

Many people have debts, but many people are able to handle those debts through hard work and diligent attention to their outgoings – but anything can happen, and people with debts are at risk of making those manageable problems totally unmanageable.

If you have debts, and have learned to handle them, you probably have some of your income set aside to pay the interest on the bills and the debts. Also you may even be proactively saving money so as to be able to pay off the debts.

But what if you stopped earning money? What would happen then?

It could happen to anyone – sickness, an accident, redundancy, a death of a bread winner – and it could leave anyone without the means to earn money. Without a regular wage, how long could you keep up your household finances? A canny saver may last a few months, but after that the debts will start to stack up.

Small, manageable debts will become larger debts as fines, penalties and arrears increase. And as we all know, it doesn’t take long before many are tempted to take out unsecured, expensive debts to handle the smaller bills. Then you are really in hot water – before long you have more debts than you can handle and no means to pay them. This could ultimately lead to bankruptcy and repossession, and you everything you worked so hard for could be lost.

So don’t let that happen – get protected with some income, critical illness and redundancy cover. By adding a few pounds a month onto your outgoings for some crucial insurance products, you can be sure that if you lose your income, your debts will not become serious adverse debts.

To Keep up with news and comments on the current adverse credit market please visit the Adverse Mortgage Blog.

Debts don’t stop rising in a recession, so you have to do what you can now to lower your outgoings, consolidate your bills and avoid further adverse debt problems in the future.

According to new, startling prediction from Ofgem, the worst case scenario is an annual energy bill for every UK household of of £1,982 in 2016. However, uSwitch.com has predicted that bills could reach as high as £4,733 a year by 2020, nearly four times higher than they are today.

This is a wake-up call for us all. The £5,000 a year energy bill may seem like an outside possibility, but we have to remember that uSwitch figures say energy bills have doubled in the last five years – we are entering a new era of high cost energy and households will have to adapt their behaviour accordingly.

That means doing all you can to reduce other debts like credit cards and personal loans. We cannot do anything about the fact that gas and oil will become a premium in the next few decades, but we can do something about reducing our own debts so as to be able to meet any rising bills head on in the future.

Ann Robinson, director of consumer policy at uSwitch.com says: “Consumers must now heed the underlying message that energy bills are inevitably going to rise in the medium to longer-term. My advice to consumers is to invest in making your home more energy efficient, reduce the amount of energy you use and make sure you are paying the lowest possible price for it.”

Talk to a mortgage adviser about your financial situation in the middle to long-term. You need to be able to pay your bills, reduce your debts and begin saving all at the same time – a big ask for those who are struggling to get by right now. But there are ways and means to reduce your financial pressures – but the only way they can happen is by talking to professionals who can help.

SOURCE: Ofgem, uSwitch.com, 09/10/09

To Keep up with news and comments on the current adverse credit market please visit the Adverse Mortgage Blog.

More people are doing what they can to save money, which has not only improved people’s finances but has also begun to improve their health too.

In fact, ten million people in Britain feel more fit and healthy than they did this time last year as a result of the recession, according to Friends Provident. What’s more, this trend looks set to continue, with 57% of respondents admitting they’d like to do more to take care of their body and health.

Over the past year, 83% have changed their eating habits, with 48% of those surveyed by the insurer eating fewer ready meals or takeaways. It’s not just cutting down on unhealthy habits though – 13 million people are saying they have replaced the junk food with healthy alternatives like fresh food and home-grown vegetables.

People who were previously struggling with debt are reassessing where their money is going and have realised that their lives are simpler and healthier when they spend less.

The recession has meant our whole approach to food seems to be changing – when it comes to drinking, almost 10% of people are cutting out the booze to save money. Overall, there has been a 17% drop in those who regularly drink more alcohol than the recommended limit. Looking forward, a further 12% of respondents would like to cut their alcohol intake even more.

An encouraging 55% of respondents frequently exercise for 30 minutes, 5 days a week. The recession seems to have changed the type of exercise that people are doing, with 19% of people taking part in more free methods of exercise, such as running, or following home exercise videos.

Mark Jones, head of protection at Friends Provident, says: “Even though the recession has had an impact on a lot of the UK’s population, it’s encouraging to see that some of this impact has been positive. The financial pressures combined with personal motivation have led people to take a fresh look at their lifestyle and priorities. As a result, it looks like many have changed for the better.

“Changing habits to lead a more healthy lifestyle today may motivate them to continue this trend in the future and contribute to securing a longer healthier life even if we can’t guarantee long term wealth.”

SOURCE: Friends Provident, 30/09/09

To Keep up with news and comments on the current adverse credit market please visit the Adverse Mortgage Blog.

If you want to move out of adverse mortgage debt, the first thing you should do is look for ways to reduce your monthly outgoings and begin working towards saving, not spending.

Take a look at what you spend each month – credit card bills, loan repayments, utility bills, food shopping bills, phone contracts, internet and TV bills, petrol – it might seem like it never ends, and it certainly feels like you do not have a penny to spare for savings. This is a problem if you have adverse mortgage debts, because the only way to get yourself out of mortgage debt is to save and work off your debt.

So look to reduce your outgoings. Go through each direct debit and monthly responsibility and see where you can save yourself money. Talk to your credit card firm, go to a new energy provider and shop around for new TV, phone and internet providers. You might be amazed at how much you could save.

Yes, it can be a protracted process to change your bills, but the savings made could be just what you need to begin saving your way out of mortgage debt. By putting away money each month you can begin to pay off your adverse mortgage debt and move towards being a better borrower – the more you save, and the more you pay towards your debt, the better your credit score becomes. This means you become a better bet for lenders and gives you more chance to get hold of better credit in the future.

So reduce your outgoings and then go to a mortgage adviser. They will be able to tell you how much you should be saving, where you should be saving it and when you should be paying back your debt.

To Keep up with news and comments on the current adverse credit market please visit the Adverse Mortgage Blog.

When selecting a bad credit mortgage company there are two main issues to consider. The first of these is the interest rate, which will be loaded according to how adverse your credit really is. The second is early redemption penalties that might be imposed by the bad credit mortgage company. These are the main issues that will affect your mortgage and your ability to move from an adverse credit product to a standard product. Even if you end up with a bad credit history because of arrears and defaults, a bad credit mortgage company can be the first step to financial recovery.

Find out more about choosing the right Bad Credit Mortgage Company

A bad debt remortgage is a good option for people who are looking to repair their credit, but it’s not something people should rush into. There are several issues to consider before taking on a bad debt remortgage. If your credit file will soon be clear, you might prefer to wait. Even if it isn’t you will need to shop around for the best deals on interest rates and early redemption charges. Flexibility is now the name of the game in the UK mortgage market and this applies to bad debt remortgage deals as well, so it’s worth seeing what’s available.

Learn more about the Bad Debt Remortgage