The Debt Test: Are You Making Out A Mountain Out Of Your Mortgage? By: Rachel Lane According to the Council of Mortgage Lenders, first-time buyers are the most susceptible group of homeowners to debt, as they are more likely to have higher loan-to-value ratios and commit a higher proportion of their income to mortgage repayments. Despite their susceptibility to debt, there is evidence which indicates that insurance take-up and employee benefits provide recent first-time buyers with a safer foundation than the general population of mortgage borrowers. The Council of Mortgage Lenders (CML) has become increasingly concerned about the ability of current and future home-buyers to pay back mortgages in the event of changing circumstances. Over the past five years, the CML and its partners within the Sustainable Home-ownership Initiative, have sought to improve this issue. Contributing factors to the problem include increasing personal debt levels and a less certain economic environment. This has provoked concern about the sustainability of home-ownership and consumer understanding of financial products, ensuring that the issue of mortgage risk is at the top of the agenda for the UK Government, industry regulators and public as a whole. Over the last year, the Sustainable Home-ownership Initiative has debated the most effective move forward to increase home-buyers’ awareness of potential debt and protection from unforeseen events with insurance products, specifically Mortgage Payment Protection Insurance (MPPI). The Financial Service Authority is leading the way to help raise awareness of debt prevention with the “Debt Test” initiative. According to research carried out by the Council of Mortgage Lenders, two thirds of recent first-time buyers say that an online debt test designed to help them assess potential triggers of debt and highlight future borrowing risk would be useful. The mortgage market is also watched very closely by the consumer research website, moneynet. In addition to tracking market behaviour, property values and homeowner incomes, moneynet have endeavoured to become increasingly proactive about educating their visitors, so they fully understand the complexity of the relevant financial products. In addition to their mortgage comparison service and mortgage protection options, moneynet published a comprehensive mortgage guide earlier this year, as part of its series of consumer product guides. Moneynet isn’t the only site to offer enhanced information services; Which? also offers a detailed mortgage guide and mortgage search tool powered by Moneyfacts. Both “Switch with Which?” and moneynet take the consumer through the types of deal available, detailing the different interest rate structures including fixed rates, capped rates, discounted rates, stepped rates and standard variable rates. The CML state that there is much evidence to show that first-time buyers appreciate this information, including the “debt test”, more so than older households. This is perhaps due to the fact that many first-time buyers have to borrow much more for their initial property, due to high prices, and that they have generated more personal debt than their parents’ generation. Whilst personal debt remains a major concern for the finance industry, the government and the public, financial stability remains possible with education. * * * * * * * * * * * * Resources: http://www.moneynet.co.uk/mortgage-guide/index.shtml http://www.switchwithwhich.co.uk/mortgage/index.html http://www.cml.org.uk/ About the Author: Rachel writes for the personal finance blog Cashzilla: http://www.cashzilla.co.uk/ Rachel can ask for five beers and black coffees in Turkish.

Inside Finance Use Child Tax Credit   We can use child tax credit for tax savings. But like everything else in this world, there are exceptions. If you qualify under both these exceptions, you receive the greater of the two amounts, up to the difference between your federal tax liability and your regular Child Tax Credit. Reporting The Financial Health   Reporting the credit score in the financial health is an important process. Credit score is one of the most basic, determining factor while loan borrowing. Credit score is the criterion for the creditor to ascertain whether to give you credit or not. Benefits Of Re-Mortgage   There are many benefits of re-mortgaging system. Banks are reporting that the numbers of customers re-mortgaging their properties is at its highest ever. Most of these customers are seeking to take advantage of two important trends in the economy. Benefits: Home Improvement Loan   The benefits of home improvement loan is been discussed in this article. A Home Improvement Loan is great if you want to raise a large amount; are having problems getting an unsecured loan; or have a bad credit history – you may be able to get a Home Improvement Loan even when you have been turned down for an unsecured loan. Auto Insurance   Auto insurance is used to buy vehicles. It provides protection against losses incurred as a result of vehicle accidents. While ‘Liability insurance’ covers only legal liability, ‘comprehensive insurance’ covers PIP, MP, as well as legal liability.