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According to Moneynet.co.uk, the average authorised overdraft interest rate has risen from 13.85 percent in February 2008 to 15.32 percent in February of this year.

It has been reported that somebody who became overdrawn by £1,000 in February 2008, for six months of the year, would have been faced with interest charges of £69.25.  In contrast, a person in the same situation today would be looking at interest charges to the value of £76.63 – an increase in excess of 10 percent.

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Homeowners who have built up multiple credit including overdrafts, credit cards and store cards, could consider consolidating it with a secured loan.  One of many finance options available, a secured loan for consolidation could leave borrowers with a single monthly repayment as opposed to juggling several.  By tying up existing credit, such as credit cards, into one place, borrowers could even be left with more money each month as a result of lower monthly outgoings.  However, if opting for a secured loan to consolidate existing credit, 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 LV=, the results of their seventh annual survey have shown that the cost of raising a child to the age of 21 is likely to cost parents in excess of £201,000 – equivalent to £26 per day.  These costs were found to have increased by 4 percent since the previous survey in January 2009, with childcare and education amounting to the greatest expenses.

In fact, the survey revealed that a typical household where both parents are working could be faced with childcare costs up to £54,696 for each six month to 16 year old.  This figure includes nursery fees, after school clubs and holiday clubs.  Furthermore, the cost of education reportedly amounts to £52,881 throughout a child’s lifetime.

Findings have shown that 77 percent of parents have admitted to cutting back on family expenditure due to the ‘ongoing economic situation’, with this figure coming in lower than the 81 percent recorded last year.  It would seem that 36 percent of parents are also cutting back on the amount of money that they regularly save.  In addition, it was found that 19 percent of respondents have been forced to cancel or review their insurance products and income protection cover in order to assist with budgeting for the family.

With regard to pocket money, LV= discovered that the sum that a child receives has increased by virtually 5 percent this year.  The value now stands at £4,338, which reportedly marks a reduction from £5,469 in 2007.  It has been highlighted that 13 percent of parents have actually been asked for less pocket money, which is thought to be a sign that ‘the need to maximise the family’s finances is being felt by more than just mum and dad’.

The survey has revealed that the cost of raising a child is highest during the ‘university years’ when parents could potentially be faced with annual costs of £13,677.  However, findings also show that parents with toddlers between the one and four years of age could be looking at a cost of £13,014 per annum.

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Homeowners who have found themselves using credit and store cards to cover the cost of their families, could consider consolidating this with a secured loan.  One of many finance options available, a secured loan for consolidation could be used to tie up any existing debts such as credit cards and personal loans.  What’s more, in taking this approach, borrowers could be left with lower monthly outgoings and more money each month, which could potentially be set aside in a savings account.  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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Cross-Posted with www.freerateupdate.com

Over the years, I have had countless conversations with home buyers about their jumbo mortgages. From 2003 to 2008, a typical a cocktail party or a BBQ invariably went something like this:

Home-Buyer: We got a great deal on our new mortgage.
Me: Did you do a 30 year fixed jumbo loan or something more exotic?
HB: 30 year fixed jumbo mortgage— at 4.5% !
Me:  Sorry, but that’s not 30 year fixed — rates are 6.5% today. That’s probably a 2/28, with a reset in 200X.
HB: No, we definitely asked for a 30 year fixed.
Me:  Well, that’s not what you got — its impossible to get that loan at that rate today.
HB: We’re good negotiators.
Me: Jumbo Mortgage rates are set by the bond market. Banks charge a mark up ABOVE the rates that they can borrow money. They can’t get 30 year money at 4.5%, so you can’t get 4.5%.  There is only so much negotiating you can do with the bond market.
HB: Well, its definitely a 30 year fixed.
Me: Please make the pain stop . . .

And so on.

Huge swaths of people, did not understand what they were buying, what it cost them, what their other options were, whether they could afford it or not.

I am not saying this to exonerate their ignorance — it is inexcusable in my opinion. Adults must take responsibility for their decision making, regardless of how foolish it may have been. That home buyers cannot figure out a basic financing document is beyond my comprehension. However, that is the way it is. We must acknowledge the simple reality, if we wish to avoid this problem in the future. That’s why we need to insure consumers understand what they are purchasing.

We are happy to see clients take a serious look at their current loan and the pros/cons of their various jumbo loan ARM refinance options vs the certainty of a refinance into a fixed jumbo mortgage. I think this a great change from the days of simply selecting the “cheapest” option of “no-points, no fees” on a jumbo 5/1 Interest Only ARM. Home owners realize their risks and are trying to make the most informed decision possible.  The prudent behavior by lenders and borrowers will result in much better jumbo loan performance and better lending standards in the future.

Now for the meat and potatos of jumbo mortgage rates this week. The trend was largely sideways action for products that aren’t deposit based. Our portfolio products dropped by .125-.25% across the product spectrum  for money good credits. Here is a sampling

30Y Fixed Jumbo Mortgage 5.625% paying 1 discount point

7Y ARM Jumbo Loan 4.50% paying 1 discount point

*In order to help customers compare similar jumbo loans, we use the following parameters in conducting our rate survey: A jumbo loan amount of $1m, sales price $1.3m. Each loan is a purchase transaction, 720 credit score, 30 day rate lock, taxes and insurance being escrowed, single family primary residence with fully documented income and verified assets(savings/investments).

p>Pocket money is under-rated as a way to teach kids core money lessons. The idea of them having their own cash is beneficial… It teaches them about regular income. By having a regular amount of money you start to learn the concept of saving versus spending. It incorporates ‘opportunity cost’. While each of my two money mantras [...]

According to the Finance & Leasing Association, consumers spent 17 percent more on instalment credit during the lead up to Christmas compared to the same period a year before.  It is believed that a proportion of this increase was related to the rate of VAT returning to 17.5 percent, which reportedly prompted people to make money-saving purchases beforehand.

Compared to 2008, it has been revealed that the sum of new consumer lending provided by members of the FLA fell by 15 percent in 2009.  However, an analysis of the actual products has shown that credit card, store card and store instalment credit spending have ‘held up, relative to longer-term credit products’.  It was found that consumers are making smaller purchases on instalment credit, such as white goods and home electronics, which typically cost up to £700.

Fiona Hoyle, the FLA’s Head of Consumer Finance, said: “Our figures tell a wider story of the recession.  Overall, new consumer lending is down by 15%.  But the breakdown between different credit products tells us that customers are looking at the financial products available to them, and using credit products to meet specific needs.

“The High Street has benefited from FLA members providing credit to customers, whether through credit cards, store cards or store instalment credit.  Customers are using these products because they are flexible and allow consumers to spread payments for essential goods and keep them at levels that are within their budgets.

“The same principle applies to store cards.  But store cards are endangered by current proposals from the Conservatives, which would gold-plate new EU regulations and remove this convenient option for customers.  We hope the Conservatives will think again.”

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Homeowners who find themselves with multiple credit card or store card repayments each month could consider taking out a secured loan to tie these commitments up into one manageable monthly repayment.  One of many finance options available, a secured loan for consolidation could leave borrowers with just one monthly repayment as opposed to juggling several.  Furthermore, this single monthly repayment could even be lower than the sum of current outgoings.  However, if opting for a secured loan to consolidate existing credit, 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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A study conducted on behalf of F&C Investments, which involved questioning 3,000 Britons between 35 and 45 years of age, has revealed that over half ‘do not feel fully in control of their finances’.  A further 36 were found to feel ‘a degree of control’ whilst 14 percent admitted that they ‘did not feel at all in control’. 

With regard to the gender divide, the study uncovered that 61 percent of men felt in control of their finances, whereas this was the case for 43 percent of women.  Furthermore, of the respondents with debts, a third were reportedly either ‘a little worried’ about their level of borrowing or were ‘finding it hard to keep up with repayments’

Findings also showed that virtually a third of those questioned have ‘enough rainy day cash on deposit to fund several months’ outgoings’.  This was found to be the case for 40 percent of men and 27 percent of women; however 34 percent of women and a quarter of men do not possess any savings at all.  In relation to investments, the study revealed that three quarters of women, and 58 percent of men, do not have any aside from cash on deposit and any pension arrangements.

When respondents were asked about their intentions for the coming year, 41 percent reportedly explained that they were not intending to increase their savings or investments.  Nevertheless, the study showed that 35 percent of men and 26 percent of women would open a savings account or increase the amount that they save.  Additionally, it was found that 17 percent of men and 3 percent of women would ‘put more in unit trusts / OEICs, investment trusts or shares’.

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Homeowners who are looking to re-organise their finances, particularly any existing credit, could consider taking out a secured loan.  One of many finance options available, a secured loan for consolidation could allow borrowers to replace multiple monthly repayments with just one.  What’s more, this single monthly repayment could even be lower than the sum of current outgoings – thus lowering monthly outgoings.  However, if opting for a secured loan to consolidate credit, 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>Normally Tuesdays are sacrosanct, it’s the day we send the weekly money tips email, so from the moment I get up (which is early as it’s a GMTV day), barring a few appearances, it’s all guns a blazin’ until we finish sometime before 10pm (on a good day)… My diary is permanently blocked out on [...]

According to Caxton FX, credit card interest rates are at their highest level for twelve years.  Therefore, the foreign exchange company is highlighting the importance of planning that Easter holiday money.

It has been revealed that despite the Bank of England rate being the lowest it has ever been at 0.5 percent, the recent recession saw a rise in defaults – a cost that credit providers are factoring into their APRs.  It would seem that even existing credit customers who pay the minimum each month, whilst never exceeding their credit limits or missing a payment, are being affected.

Findings from a recent survey showed that last year one in five Brits utilised a credit card whilst abroad, with the approximate spend per traveller coming in at £600.  Caxton FX views these figures as ‘worrying’ due to increasing interest rates combined with fees for overseas credit card use.  It is believed that Easter holidaymakers could ‘be stung for thousands’.

The majority of cards reportedly levy a fee in the region of 2.75% on the foreign exchange mark-up, in addition to charging commission.  Furthermore, foreign ATM withdrawal fees are thought to be widespread.

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Homeowners who are currently juggling several credit card bills each month could consider tying these debts up into one place with a secured loan.  One of many finance options available, a secured loan for debt consolidation could leave borrowers with just one monthly repayment.  What’s more, this single monthly repayment could even be lower than the sum of current outgoings.  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 a survey conducted by Confused.com, 76 percent of Brits claim that the freezing weather conditions have increased their awareness of energy usage.  However, it has been revealed that a significant number of people are ‘still falling foul of bad habits what will send their bills through the roof’.

Findings show that 22 percent of pet owners are leaving their central heating on when they are not at home for the benefit of their animals, whilst one in ten vacant homes are preheated all day in preparation for a warm entrance after work.  Furthermore, it was found that 37 percent of homeowners will turn the thermostat up rather than putting on a jumper.  The survey also revealed that just one third are thinking about switching tariffs, despite concerns surrounding bills.

Confused.com points out that although the nation is now ‘savvier than they’ve ever been’ in relation to their energy consumption, central heating is still being relied upon as the primary means of keeping warm at home.  In fact, it has been reported that the average homeowner is living in a temperatures that surpass those recorded in Miami during January – 22 degrees Celsius.

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Homeowners who would like to reduce their long-term energy bills could consider taking out a secured loan to fund any household projects required to insulate the property.  One of many finance options available, a secured loan for home improvements could allow borrowers to set about replacing a roof that is in a state of repair for example.  In addition to enhancing the water-tightness of a property, this should also increase heat retention – particularly when fully insulated.  Borrowers may also wish to replace any draughty doors or windows for even greater heat retention.  There are a range of options available to borrowers who are looking to transform a chilly house into a cosy home, whilst keeping energy bills down.

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p>This Sunday Time’s money section back page ‘Fame and Fortune’ profile was on comedian Omid Djalili, who’s referred to as the “Star of the Moneysupermarket adverts”… Initially I found it tough not to picture the press office at the big comparison site, heads in hands, while reading the paper. Then again maybe it’s just part of [...]