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According to Moneyfacts.co.uk, growing competition within the credit card market at the end of the 1990s resulted in rates beginning to fall.  In 2006, credit card rates reportedly reached their lowest average level of 14.8 percent.  However, as the economic downturn set in, credit card rates started to steadily rise.  In fact, it has been revealed that average credit card rates now stand at 18.8 percent, which marks the highest percentage for 12 years.

Spokesperson for Moneyfacts.co.uk, Michelle Slade, said:

“The UK continues to suffer from a high level of unemployment and providers are worried about the increased risk of customers not repaying their debts.

“This increased risk continues to be passed on to both new and existing credit card customers through higher rates.

“Borrowers with £5,000 debt on the card, who just repay the minimum each month, will now repay an additional £2,289 over the life of the debt than they would have in February 2006.

“Other charges such as balance transfer, cash withdrawal and foreign transfer fees also continue to go up, leaving customers paying more across the board.

“Card companies are reassessing their existing customer base, resulting in numerous customers seeing a rise in their rate.

“Many such customers who would previously have switched to another provider are now finding it’s not so easy to do so.

“Competitive deals for balance transfers and introductory purchases remain on offer, but card providers are being extremely selective over exactly who they accept for these deals.

“If customers do receive notice of a rate increase, they should challenge their provider as to why the increase is necessary, especially if their credit status hasn’t changed.”

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Homeowners who may find multiple credit card repayments confusing, could consider tying these commitments up into one place with a secured loan.  One of many finance options available, a secured loan for debt consolidation could leave borrowers with a single monthly repayment, which could even be lower than the sum of current outgoings.  Therefore, borrowers could be left with more money each month, which could potentially be set aside in a savings account for future use.  However, if opting for a secured loan to consolidate debt, it should be remembered that consolidating your debt may increase the amount you pay back overall and extend the repayment periods of your debts.

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According to The Children’s Mutual, the cost of supporting 18 to 30 year old children is expected to go beyond £30,000.  This revelation came about following a survey which also uncovered that 93 percent of parents are funding their adult children, labelled ‘yuckies’ – an abbreviation for ‘young unwitting costly kids’.

In fact, findings show that 28 percent of parents have either remortgaged, or they are planning to remortgage, to financially support their 18 to 30 year old children.  Over half of all parents reportedly turn to borrowing in order to meet expenses.  Furthermore, it was found that two thirds of parents either have, or will, reduce their day-to-day living expenses in order to fund their ‘yuckies’.  For example, 28 percent said that they will be more economical when it comes to food shopping, 7 percent will sell their cars, and 42 percent will be careful with their heating and lighting usage at home.

Chief Executive of The Children’s Mutual, David White, commented: “These figures unveil the stark reality of the cost of being a parent.  No longer does turning 18 mean financial independence – in fact 16 per cent of parents questioned expected their child to remain financially dependent on them into their thirties and beyond.

“The families we questioned had just one message for parents whose children are still young – save, save, save!  More than half agreed that if they’d have known when their child was born what they now know about the cost of having an adult child they would have saved more through the years, with just 13 per cent having saved regularly in preparation.  These figures give us a very clear warning – children aren’t financially independent at 18 and parents need to plan for this to save their whole family’s financial future.”

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Homeowners who may have accumulated a number of credit cards or personal loans in the past due to supporting their grown up children, could consider tying these up into one place by means of a secured loan.  One of many finance options available, a secured loan for debt consolidation could leave borrowers with a single monthly repayment as opposed to juggling several.  Furthermore, this replacement monthly repayment could even be lower than the sum of current outgoings – thereby freeing up useful money each month.  This extra money could potentially be set aside in a savings account for future use.  However, if opting for a secured loan to consolidate debt, it should be remembered that consolidating your debt may increase the amount you pay back overall and extend the repayment periods of your debts.

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According to research conducted by moneysupermarket.com, one in five Brits carries in excess of three credit cards.Furthermore, the price comparison website’s research uncovered that 17 percent of credit card holders utilise their credit card at least once a day, whilst 28 percent utilise their card at least once a week.

In relation to the types of purchases made, it was found that 56 percent of credit card holders utilise them to buy goods online, whilst 40 percent utilise them to finance everyday expenses.  Nevertheless, moneysupermarket.com discovered that consumers are ‘savvy’ with regard to ‘making their plastic work hard for them’.  The research showed that 25 percent make use of their credit cards in order to gain reward points, and 11 percent do so for cashback and zero percent purchases.

Findings show that 26 percent of men have a minimum of three credit cards, compared to just 16 percent of women.  In fact, a third of women reportedly do not possess a single credit card, whereas this is the case for a quarter of men.  What’s more, just 49 percent of female credit card holders reportedly utilise their credit cards more than once a month, whilst 49 percent of male credit card holders make such purchases on a weekly basis.

It would seem that those over the age of 70 are likely to possess the greatest number of credit cards, with 27 percent possessing more than two cards compared to the national average of 20 percent.  However, amongst this group, it was found that one in four make credit card purchases everyday compared to 31 percent of those under the age of 20.

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Homeowners who are faced with several credit card bills each month could consider taking out a secured loan to tie these commitments up into one manageable monthly repayment.  One of many finance options, a secured loan for debt consolidation could eliminate the need to juggle multiple, confusing credit card bills – whilst potentially leaving borrowers with more money each month.  However, if opting for a secured loan to consolidate debt, it should be remembered that consolidating your debt may increase the amount you pay back overall and extend the repayment periods of your debts.

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p>There are some things you thought you’d never say. For me, “my wife’s getting jiggy with Michael Fish” is right up there, but it’s true… On Saturday night Mrs. MSE is taking part in the Sports Relief Let’s Dance programme as part of the weather girls’ team. Alongside GMTV’s Claire Nasir and ITV’s Becky [...]

According to research by Santander Cards, unnecessary foreign exchange fees to the value of £122 million were incurred by Brits who used their credit cards abroad last year.  It was found that this significant sum was generated following £1.5 billion worth of overseas credit card payments – equivalent to £600 per traveller.

Santander points out that virtually all available credit cards are subject to a foreign exchange fee in the region of 2.75 percent on overseas purchases.  However, this fee is reportedly ‘entirely avoidable’.

The research showed that 25 million Brits ventured overseas last year, with their average time spent abroad being three weeks of the year.  Furthermore, it was discovered that in excess of 7.5 million travellers – equivalent to 30 percent – spent a minimum of four weeks abroad in 2009.

In terms of methods of payment whilst abroad last year, the research showed that practically five million people primarily relied upon credit cards for making overseas purchases.  For eight million travellers, credit cards were reportedly their secondary means of payment.

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Homeowners who are currently juggling multiple credit card repayments each month could consider taking out a secured loan to tie these up into one place.  One of many finance options available, a secured loan for consolidation could allow a borrower to eliminate confusing, expensive credit card repayments by replacing them with a single monthly repayment.  This new monthly repayment could even be lower than the sum of current outgoings thus leaving the borrower with more money each month – which could potentially be set aside for that next holiday.  However, when taking out a debt consolidation loan, it must be remembered that consolidating your debt may increase the amount you pay back overall and extend the repayment periods of your debts.

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p>On Friday night in the office, we were celebrating MSE Dan’s engagement to his girlfriend, now fiancée, Laura the week before (huge congratulations to them both)… I instantly thought of my own engagement. Within three minutes everyone started asking ‘when’s the date’ and the pressure came on to sort out the wedding. Then it occurred to me, [...]

Moneysupermarket.com is advising travellers to ensure that they have a competitive deal on foreign currency.  It is believed that a competitive deal can make a significant difference to holiday spending – particularly whilst the pound is weak.  Therefore, travellers are being urged to carry the right card with them whilst abroad.

Furthermore, the price comparison site has recommended avoiding the bureau de change at the airport.  Instead, it is reportedly possible to make a £68 saving by utilising a leading debit card for cash withdrawals whilst holidaying in Europe.  However, it has been pointed out that although paying for purchases via credit or debit card may be convenient and cost efficient whilst abroad, different providers charge users in varying ways.  Furthermore, using an inappropriate product could result in mounting costs.

According to Moneysupermarket.com, prepaid cards are becoming increasingly popular amongst travellers.  Prepaid cards can be topped up with currency prior to venturing overseas and can be used as per debit or credit cards, which can be particularly useful for those wanting to stick to a budget whilst away.  It is thought that the majority of prepaid cards offer an ‘excellent rate of exchange’ though they will vary, with some being better than others.  Therefore, consumers are urged to shop around to be sure of the best deal.

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Homeowners who are looking to re-organise their finances – perhaps as a result of accumulating several credit cards in the past – could consider taking out a secured loan.  One of many finance options available, a secured loan for debt consolidation could allow borrowers to tie their existing debts up into one management monthly repayment.  Furthermore, this single monthly repayment could even be lower than the sum of current outgoings.  However, when taking out a secured loan for debt consolidation, it must be remembered that consolidating your debt may increase the amount you pay back overall and extend the repayment periods of your debts.

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Cross post.

Los Angeles Feb 24th (Freerateupdate.com)

Warning: A little technical.This is the Whole Wheat 8 Grain Variety of our ongoing commentary on the jumbo mortgage market.







As the top chart shows, 30-year fixed rate jumbo mortgage rates are going for a post-crisis low, a rate not seen since 2005. With a few scattered exceptions, the rate you get today is about as low as it has ever been in history. Conforming rates are still very close to all-time lows.

As the second chart shows, the Federal Reserve has put on the books about $1.25T of mortgage securities(tan section) which completes the program as announced. Anything could change as the conforming mortgage market tries to stand on its own. If rates skyrocket(unlikely) expect FED action as a stable housing market is a distinct policy of the Obama Administration and the too big to fail banks. The TBTF are sitting on north of 4m homes that they will need to short sale or foreclose on this year per various estimates being thrown around the industry.



The fundamentals driving the jumbo mortgage rates (i.e., 10-year Treasury yields and the spread between MBS and Treasury yields that investors demand in order to compensate them for the prepayment risk of mortgage-backed securities) suggest that we are very unlikely to see rates go lower than they are now. Treasury yields are quite low from a historical perspective, and spreads are about as tight as they have ever been.

One other interesting fact that shows up in the first chart is that the difference between jumbo and conforming mortgage rates is still quite large given that a conforming 30Y fixed is at 4.75% currently. That means that even if conforming rates move higher, it will likely take awhile before jumbo rates move much higher; the spread between them could compress by another 25-50 bps for the absolute Super Prime Credits with 30-40% equity and substantial investment assets. aka Money Good Credits.

However, I should also point out that the declining spread between jumbo and conforming loan rates is a very good sign that private capital is returning to the jumbo mortgage market in general. The Fed is only buying conforming mortgages, not jumbos, so jumbos have been outperforming conforming MBS, which in turn suggests that private capital has been actively seeking out the higher yields on jumbos. That is also an indication that when the Fed stops buying MBS at the end of March, there is no reason to expect jumbo mortgage rates to move significantly higher. A lot of pressure is building because of the RECORD default rate of 9.6% which prevents investors such as pension funds, insurance companies and mutual funds from aggressively buying jumbo mortgage bonds. These twin forces lead us to believe we will see rates in the 5.75-6.50% range on the 30Y Fixed Jumbo Loan throughout the year.

We continue to believe that prospective homebuyers and most long term homeowners would be well-served to choose a 30-year fixed jumbo mortgage instead of an adjustable rate. But, one size fits all advice never works as you well know.  Fixed rates are very low from a historical perspective, while the short-term rates that drive ARMs are very likely to rise significantly in coming years. With the fixed rate you get the certainty of locking in a historically low jumbo loan rate, but with adjustable rates you are exposed to considerable uncertainty down the road, because no one knows today how high short-term rates will be in the future. We always advise matching the loan term with personal and financial plans.

Have a prosperous day.

Research conducted by Clydesdale Bank has revealed that couples could have expected to spend a substantial sum of £550 on Valentine’s Day, which equates to £4.9 billion.

In relation to the gender divide, it was estimated that women would spend £338 on Valentine’s Day – a third more than men.  Despite the fact that it is traditionally the man in the relationship who ‘picks up the bill for dinner, wine and flowers’,on average women spend £100 more in order to ensure a successful ‘seductive evening’.  The research has shown that the most significant proportion of a woman’s outlay is spent on their appearance, with £100 being shelled out for a new high street outfit.  In excess of £50 is also reportedly also spent on a ‘stylish cut and blow-dry’, whilst £130 is spent on beauty treatments such as tanning and manicures. In contrast, it was found that the average male will make purchases ranging from a ‘DVD and takeaway’ to an ‘extravagant evening of dining out at an exclusive restaurant’.

Retail Director at Clydesdale Bank, Steve Reid, commented: “On Valentine’s Day people not only like to treat their partner but themselves too.

“Our research looked at the different spending habits of men and women, expecting to see men bare the largest cost.  But while men go for the gestures like, flowers and dinner, women splash out much more in ensuring they look and feel their best for their partner.”

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Homeowners who have relied on credit to fund purchases, and who would like to consolidate their existing credit could consider completely re-organising their finances with a secured loan.  One of many finance options available, a secured loan for debt consolidation could allow borrowers to tie up any existing debts into one place.  In taking this approach, monthly outgoings could be reduced – thereby freeing up useful money each month, which could potentially be set aside in a savings account.  However, when taking out a debt consolidation loan, it must be remembered that consolidating your debt may increase the amount you pay back overall and extend the repayment periods of your debts.

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According to the RICS UK Housing Market survey, 32 percent more chartered surveyors reported an increase rather than a reduction in property prices.  This figure stood at 30 percent a month earlier. However, the survey also highlighted that the net balance of surveyors reported that the number of buyer enquiries dropped for the first time in 14 months.  In addition, it was reported that the number of new instructions fell for the first time in seven months.

It was found that 20 percent more chartered surveyors reported a reduction rather than an increase in new buyer enquiries, down from the ‘positive reading’ of 18 percent.  With regard to the decline in new instructions, it was found that a balance of five percent of surveyors reported this compared to a ‘positive balance’ of 15 percent in December.  The survey also showed a drop in newly agreed sales for the first time in ten months, leading to the conclusion that the poor weather adversely affected business.

In fact, surveyors are deemed to be ‘optimistic that these negative signs are a reflection of extreme weather conditions experienced in the early part of the month’.  Furthermore, it was revealed that the number of surveyors who are anticipating an increase in property prices has risen from 12 percent to 24 percent.  It has also been reported that there has been a rise in the number of surveyors who are expecting sales to ‘pick up’ during the next three months – from seven percent to 24 percent in January.

The survey showed a slight drop in transaction levels in January, with the number of sales per surveying firm falling from 19 to 18.  It was also uncovered that the sales to stock ratio fell for the second consecutive month, which is a measure of ‘market slack’ and a ‘lead indicator of future prices’.

RICS spokesperson, Ian Perry, commented: “The cold snap in January clearly has a huge impact upon both supply and demand in the housing market with activity coming to a halt amidst the seasonal chaos.  Activity and interest is likely to pick up in the coming months as the market experiences a spring bounce.

“House prices are likely to rise in the short term but if more supply continues to come onto the market, it is possible that the market will run out of steam in the latter part of the year.”

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Homeowners who have toyed with the idea of moving house, but have since decided to sit tight as a result of market conditions, could consider taking out a secured loan to transform their current property into their dream home.  One of many finance options available, a secured loan for home improvements could allow borrowers to embark upon a range of projects in and around the home.  For example, any necessary repairs could initially be made before redecorating and refurbishing the property to fit in with personal tastes and lifestyles.  Homeowners who could do with more living space may even decide to extend their property, whilst those who enjoy spending time outdoors may also choose to have their garden landscaped.

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