Archive for March, 2008

Here’s 6 of 10 things you could do to start saving money.
The rest are at the finance blog website:

If you had a hole in your trouser pocket, you wouldn’t keep putting money there. Instead you would look to first mend the hole. It is the same with our finances. We work very hard to earn money and then due to bad habits and mistakes we can easily lose our money almost as soon as it enters our bank account.

If we can stop doing these things we will make a huge improvement in our personal finances, for relatively little effort.

1. Eating out every Day

Eating out is an expensive way to live. It can be buying breakfast on the way to work or ordering a takeaway in the evening, you will find both take a high % of your disposable income. Even if we just get a takeaway coffee with pastry in the morning it can become very expensive if we make a regular habit of it. It takes a little more preparation, but eating at home will save us considerable money and it is also easier to eat what we want, rather than what restaurants are serving

2. Burying Your Head in the Sand.

I know many people who have problems with their personal finances and rather than trying to solve them they just try to ignore them. Unfortunately, trying to ignore issues of debt does not make them go away in any way. Instead what happens is that we end up with avoidable charges and interest payments. This is definitely a case where ignorance is not bliss. If necessary take the advice of others and find a way out of the debt.

3. Keeping up with the Joneses

If we are committed to keeping up appearances we can end up spending an awful lot of money on expensive brands. If you feel obliged to buy clothes from certain designer labels try changing your expectations. Maintain shows of wealth and fortune are not a reliable way to bring happiness and peace of mind; there will always be someone with more luxury goods than yourself. Change your mindset and look to buy something which offers good value.

4. Always Buying Brand New

There are many items where you can save considerable money through buying second hand. In particular this applies to cars, TVs and videos. Here you can make considerable savings with no loss of utility. This is not just making small savings, it involves making big savings.

5. Holding debt on Your Credit Card.

If you have a credit card debt and are paying interest at 17% your finances will inevitably continue to deteriorate. It is difficult to pay off the interest charges and reduce the credit card balance. Therefore, you can be paying a minimum payment for years and yet the debt will continue to grow. This is an example of how poor financial planning can make things worse. With a little planning and rearranging of your finances you can try to pay off the credit card debt saving yourself interest payments.

6. Feel Sorry For Yourself

If the idea of money just makes you depressed; if you always feel miserable because you don’t have enough money, then it will be difficult to do anything about it. When we just feel miserable at our state of personal finances we are not doing anything to improve it. With a negative mindset it becomes difficult to turn our fortunes around. We need to try and adopt a positive attitude, or at least an attitude where we think of steps we can take to alleviate the problem

Tags: finances, mortgage

Further tightenings n the borrowing market, point to a general slowdown.
This from the Thrifty Scot

March 7, 2008

According to recent reports an increasing number of lenders have decided to stop offering 125% mortgages, which have proven popular amongst cash strapped buyers and first time buyers in the past.

These mortgages are made up of a 95% mortgage loan and a 30% unsecured loan, which the borrower often uses to renovate the property, pay fees and stamp duty, and cover other related costs.

Over the past couple of weeks a number of major lenders including Abbey, the Alliance and Leicester, and the newly nationalised Northern Rock, have announced the withdrawal of these mega-mortgages.

It is thought that consumers on special deals who may need to remortgage in the near future could face difficulties, as many will only be able to remortgage on 95% of the loan, and will also be penalised for having a large unsecured loan.

One industry official stated: “With so many prominent lenders exiting the 100%-plus mortgage market this week, consumer confidence is going to be knocked again. First-time buyers will be hit hardest, with repayments likely to shoot up when they come to remortgage. At a time when consumer confidence is so low, it is disappointing that lenders are adding to the panic.”

Tags: lending, 125% mortgages

Here’s an overview of the spillover effect the American sub prime crisis is having in the uk, as explained by mortgageguide.co.uk

The recent news that HSBC lost £8.7bn as a result of the American credit crunch shows the extent of the problem. Not only have the banks lost money on buying secured subprime loans, but they are also finding it very difficult to secure the securitisation of new mortgage loans. Therefore, they are having to raise finance from elsewhere. This helps to explain why:

• Mortgage companies are increasing the cost of mortgages. (My mortgage lender didn’t pass on the recent interest rate cut)
• Ending 125% and 100% mortgage. Firms are increasingly wanting 10% and 25% deposits, making it very difficult for first time buyers to get on the property ladder
• Weakness in house prices. The increased difficulty of getting a mortgage means there are less first time buyers coming onto the market. Therefore, house prices are likely to continue their downward trend. However, there is also a trend for the housing sector to be dominated by property and buy to let investors. i.e. there is a change in the composition of the housing market - increasing the likelyhood of an increase in the size of the renting sector.

• Why Subprime crisis happened
•  Losses of HSBC at BBC

Tags: subprime, mortgage