Who would have thought it? Certainly noone in the offices here would have. Do you remember those credit card companies who were so keen to throw money and endless supplies of plastic cards at you? Well now they want it all back! If you have then you’ll no doubt be aware that there’s no longer such a thing as a friendly loan. All those lenders that just a few years ago were so keen to throw funds at you now are insisting on conclusive proof that you have the means to pay them back. Some people are even finding that with a good credit rating, money in the bank and a healthy property they are having trouble getting a loan or credit card.
Is it the same for mortgages?
You betcha. Lenders are now nit picking at documentation and are even harder on appraisals with the chances of offering a 100% finance deal being less than slim. With the rise in rates it seems it is impossible or at best extremely hard to get a 100% equity loan any more. Worse still, should you decide to, with the possibility of falling house prices, borrowing against your ever shrinking equity isn’t the best thing to do. We saw all this in the 80’s and some people still aren’t learning their lesson.
And credit cards?
Same old story, banks are looking to sure up their footing and it’s the punter that pays the price to fund their revenue hike. So there’s no coincidence that credit card terms are on the up too. So, if you take on board one thing from this article, then let it be this – pay your bills on time and check your bill to see that your APR hasn’t suddenly shot up while you weren’t looking. You’ll probably be surprised at just how many people don’t check their statements or online account.
OK, but what about that new car?
So I’m sounding like a stuck record now, but a quick look through the finance deals on offer reveals the same growth in lending rates, take a look at only twelve months ago and compare the rates.
Simple answer is get a fixed rate payback scheme and stick with it. Loading yourself with a rate which could or more likely ‘will’ go up over the next five years could end up crippling any free cash you have in your monthly pay packet, worse still you could end up wallowing in negative equity. It still pays to shop around whatever type of finance deal you are looking for and a lot of web sites have a friendly loan form to fill in which gives you a comparison snapshot of current deals.
With Christmas round the corner we’re all going to need all the cash we can get to buy presents and so on, but the important thing to remember, and this may be cliche, but a loan is most probably not just for Christmas and you could well end up with it for life (or perhaps the rest of your mortgage’s life).