home loan finance blog
In recent weeks billions of dollars have been wiped off the value of stocks and shares around the world due to a lack of confidence in the money markets. But whilst their fortunes may be on the wane, house prices in the UK are increasing relentlessly. In fact, in the 10 years since Labour came to power house prices have surged by an incredible156%*.
But house prices aren’t the only national statistic to have risen dramatically over the last decade. Household debt (excluding mortgages) has doubled since Labour came to power and currently stands at 8,841 per household** and UK personal debt has exceeded a colossal 1 trillion pounds.
So how come there is so much debt in each of our homes and what are we spending money we don’t own on? A long spate of low interest rates has made it very cheap to borrow money. And when money is cheap to borrow then it becomes far easier for us to treat ourselves to expensive holidays, fairytale weddings, dream cars and necessary home improvements. And why not too we’re a nation of hard-working individuals that enjoy making the most of the fruits of our labour.
It’s not until interest rates start rising and the world’s financial markets start getting jittery that we all start to take stock of all the over-spending and begin to ask how we’re going to find the extra cash to keep up with our debt repayments, household bills and our mortgage payments.
If you’re finding yourself increasingly unable to find the money to pay all of your debts, you’re beginning to get red demand letters through the letter box or even worse, the bailiffs or the bank are knocking at your door to repossess your house then you need a simple and easy way to generate cash. Quickly!
Releasing cash from your home (or releasing equity as it is more commonly known) works quite simply. Since house prices are soaring so considerably there is every chance your house is worth far more now on the housing market than when you first bought it. For example, say you bought your house for 170,000 two or three years ago, and you had it valued for 200,000, that means there is 30,000 of equity that you could easily use to pay off all your debts and put towards home improvements.
At the moment mortgage interest rates are currently significantly lower than credit card or loan interest rates you’ll be paying less every month to one lender, albeit over a longer period of time.
* BBC News
** Credit Action