Money Week Article

What does the credit crunch mean for you, the potential (or current) home owner? Money Week has a great article about how you will be affected by the credit crunch that is due to hit the UK.

Here are a few highlights if you don’t have the time to read everything (though you really should make the time to read the article, it is very interesting):

The number of bankruptcies in the UK is higher than it has ever been. Usually bankruptcy is declared by life changing events like business failures, divorce or surprise bills but this year the majority of bankruptcies have been declared by people who have taken on more credit than they should have, meaning that too much money has been spent on things that the borrower probably did not need. Eighty Three percent of people who declared bankruptcy did it because they spent more money than they earned.

“Loose credit lending” is slowly becoming less and less loose. This means that the people who supply others with credit and loans will probably start to leave the money lending/credit offering market which means that, should you want to take out a line of credit, you will most likely need to do so through a bank instead of an independent company.

The article gives a number of reasons for these situations and talks about the financial history of the UK to give our current situation some perspective. The truth is, finances are getting tighter in the UK and you need to make sure your personal finances are under control.

If you have a lot of outstanding debts, you might consider taking out a secured loan, using your home as collateral, to pay off the smaller debts that are under your name. This will save you money and, probably time, later on. This way you can pay off your debts now instead of hoping that a debt consolidation loan will be readily available in a few months.

Obviously, the credit lending companies are not all going to close down over night, but if there was ever a time to get your finances under control, this would be it. Don’t wait to pay off your debts. Do it now, so you will not have to worry about whether or not you can do it later!

The article on Money Week is informative and insightful and is definitely worth the read.