Borrowing Should Be ‘Structured In Best Way Possible’
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UK residents need to take time to ensure their mortgage deal is the right one for them, an industry expert has claimed.
Julia Dallimore, marketing director for Picture Financial, claimed that as interest rates continue to increase and a greater proportion of money is spent on servicing loans costs, consumers need to make sure that "borrowing is structured in the best way for them". As a result, she claimed that those who already have "high levels of existing credit" are set to find further pressure placed on their day-to-day finances should the Bank of England's monetary policy committee (MPC) decide to increase the base rate even further. Ms Dallimore also pointed to recent research from the financial services firm which revealed that 15 million Britons (42 per cent) are concerned that they are not getting the best deal possible for interest rates and charges for various monetary products.
She said: "These growing levels of borrowing alongside the increasing interest rates mean that it's more important than ever that people review their finances to make sure they are getting a good deal and that their borrowing is structured in the best way for them. By consolidating existing credit into a secured loan people can often reduce their monthly credit repayments by more than half."
Consumers were also advised to ensure that they borrow credit from a "responsible lender". The director added that as a result such providers are likely to consider a borrowers' full financial stature and ensure that they will be able to make repayments. Meanwhile, those looking to take out a loan should also take the time to make sure that they aware of the level of commitment required by them when taking out credit.
For those running into repayment difficulties on multiple areas of borrowing, Ms Dallimore suggested that by consolidating existing debts into a secured loan Britons "can often reduce their monthly credit repayments by more than half". Despite secured loans often reported as cheaper than credit cards, she claimed that consumers may find themselves paying out more money if they choose to spread out their monthly repayments over a longer period of time. "If you choose to spread your repayments over a longer period you may end up paying more interest so it's important that you fully understand the choices you are making," she commented.
Since the MPC voted to increase the base rate to 5.75 per cent, Peter Griffiths, chief executive of Principality Building Society, claimed that homeowners in Wales are among those set to be the most adversely affected. "However, we are advising people not to panic but to look at how it will affect their finances. They can seek advice from a mortgage advisor who will help them to consider their options and possibly reduce their mortgage repayments," he said. Figures from the financial services provider revealed that following five interest rate rises in the space of the past 12 months, consumers in the principality have seen their monthly mortgage repayments increase by about £100.
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Abbi Rouse writes for AllAboutLoans.co.uk
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