Debt Consolidation – Homeowners Coping with the Crunch

A million people are at risk of house repossession in 2008 as the credit crunch tightens its squeeze – is debt consolidation the answer? To find out more visit http://www.ourdebtblog.com/

Debt consolidation can help people struggling to juggle debts that are increasingly escalating and harder to keep a hold on. It works by consolidating all your debts into one manageable monthly payment, so you know exactly where you stand with your finances. And for homeowners struggling with debt, debt consolidation could be crucial in 2008.

Debt consolidation – is it the way forward?

Homeowners are most at risk, as many homeowners over borrowed to get on the property ladder and are now feeling the impact of increased outgoings and higher utility bills. But the biggest financial risk that is putting, according to the Financial Services Authority, over a million homeowners at risk, is the fact those homeowners are coming to the end of their fixed rate deals. As a result, unless they are able to remortgage – difficult when lenders are tightening their lending criteria – they will be faced with big hikes in their mortgage monthly payments. It only takes a matter of months to fall into mortgage arrears, before the problem escalates into a very real threat of repossession. Debt consolidation could help some homeowners get a handle on spiralling financial problems.

Debt Consolidation – Taking control of your finances

Debt consolidation works by collating your debt into a single loan to pay off numerous outstanding loans; and with the help of a dedicated financial expert, you can secure a lower interest rate bringing your monthly outgoings down. Debt consolidation then could be a good option if you have spiralling credit card debts. Credit cards often have extremely high interest rates, making it harder to get on top of. If you have a home, you can use this as collateral to secure a lower interest debt consolidation loan. However, it’s worth remembering that any loans taken out using your home as collateral could put your property at risk if you don’t maintain the loan repayments.

Mortgages – Are you at risk?

If you took out a mortgage in recent years, chances are you bought when prices peaked, without reaping the benefits of increasing property prices. Many buyers were financially pushed to their limits to get on the property ladder and may have put down less than a 10% deposit, or borrowed more than 3.5 times their salary; it’s these homeowners that are most at risk to repossession as the credit crunch tightens – debt consolidation could be one way of helping to manage your finances.