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Consolidating bills is not an easy task, especially if you have a lot of debt.  The more debt you have the harder you may find it to obtain a debt consolidation loan at a low interest rate.  If you are not careful when selecting a consolidation loan, you could end up deeper in debt.

As you are searching for a consolidation loan, you must make it your goal to search for a loan that will lower your overall costs.  To accomplish that, you will want to find the lowest interest rate possible and have a plan to pay off your debt in three to five years.

Using credit cards to consolidate your debt is one type of loan that you can use if you do not have a large amount of debt.  Consolidating your debt on a credit card will require you to find a card with enough credit limits to cover the entire amount of the debt.  If you take out a personal loan for less than £2,000 you may find that the interest rate will be higher than if you take out a larger amount.  So if you require a loan less than £2,000, you may want to consider a credit card, because if you have a good credit rating, it will be likely that with a credit card you will be able to find a low interest rate, or a 0% introductory interest rate.

Another way to consolidate your loans is through a traditional debt consolidation loan.  A consolidation loan is sometimes an unsecured personal loan that does not require any security and is considered a risky loan to lenders and are usually more expensive and not easy to get if you have a lot of debt.  A secured personal loan will require you to provide collateral, such as your home, which can prove risky to you if you are not sure if you will be able to meet the monthly repayments.

You could also seek credit counselling or debt settlement, where you will have the assistance from agencies that will negotiate with your lenders to lower your monthly payments.  They will also help you to build a budget and come up with a financial plan to help clear your debt.  However, these services come at a cost, although there are agencies that do not charge you, you will end up paying with a bad mark on your credit rating.

The types of mortgages available in the UK have changed, forever.  Now, 8 out of 10 UK homeowner loans have terms exceeding 25 years.

Two decades ago, the longest repayment term was 25-years. According to a report published by Moneyfacts.co.uk, one in four UK mortgage lenders now offer repayment terms spread that exceed 40 years, and 8 out of 10 lenders offer maximum mortgage repayment terms that exceed the traditional 25 year limits.

Julia Harris, analysts at Moneyfacts.co.uk, said that consumers needed to give careful consideration to both the size of the mortgage and the repayment term.

Harris said: “A mortgage for most of us will represent the largest and longest financial commitment of our lives. For many years the standard term considered for a mortgage in the UK was 25 years, but as affordability becomes increasingly difficult for many of today’s first time buyers, a 25-year term is perhaps no longer considered sufficient.”

Ms. Harris stresses that many UK homeowner loan lenders have enticed the young to buy by extending the mortgage term and increasing the income multiples, which increase the amount consumers can borrow.

“It’s a frightening thought to think you could potentially be forking out for that hefty monthly mortgage payment from the moment you turn 18 until the day you retire at 70.”

Debt experts warn UK consumers that homeowner loans that exceed 40 years are dangerous.

A spokesperson for the debt charity Credit Action said: “People are left very susceptible to any sort of circumstantial change” if they agreed to long-term repayment periods.

Debt statistics are updated monthly.  Government, banks, and loan firms use these numbers to determine how they do business.  Consumers can use these numbers to differentiate between ad copy - meant to sell products - and a real look at the UK economy

The total UK personal debt exceeded £1.25 trillion.  At the end of January 2007 it stood at £1,300bn. The growth rate increased to 10.5 per cent for the previous 12 months, or an increase of £114bn.

Total secured loan lending exceeded £1 trillion (£1,000 billion) and at the end of January 2007 it stood at £1087bn, an 11.5 per cent increase over the last 12 months.

The average household debt in the UK is £8,795 (excluding mortgages) and £53,701 including mortgages.  This is far less than IVA and debt management firms are claiming.  These numbers bring the supposed ‘debt mountain’ to a more manageable ‘hill’ – and corroborates the Bank of England’s numbers.

Average owed on loans by every UK adult is £27,638 (including mortgages). This grew by £200 in February 2007.

The average interest paid by each household this year is approximately £3,425 each year.

The average unsecured consumer borrowing via credit cards, motor and retail finance deals, overdraft loans and unsecured personal loans rose to £4,526 per UK adult at the end of January 2007.

Britain’s personal debt is increasing by £1 million every 4 minutes.

This paints a strong picture of the average UK consumer’s ability to manage their debt.  While many households are struggling under debt, many analysts believe that a good debt management councillor will serve most UK consumers better than an IVA firm.

If you are looking to get a loan, your credit history can have a big effect on the outcome of the loan.  If you have bad credit you will have to expect a higher interest rate, or you may be required to take out a secured loan.  That is why many people strive to build a good credit history.  Although building a good credit history may be hard for some, with time, discipline and hard work you will be able to build a good credit history.

To start rebuilding your credit history you will need to develop a budget and live by it.  Through a budget you will be able to know how much money is coming in every month and how much you are spending.  By listing all your income sources against your expenses you will be able to know how much you will be able to afford should you take out a loan.  You should never take on a loan that you are unable to comfortably afford.

Budgeting will help you keep track of your expenses and allow you to maintain better control on your finances.  Other things to consider to ensure your credit report will reflect a good credit history is to pay your bills on time and to pay them in full.  This includes your credit cards, store cards, or utility bills.  You will also want to review your credit report annually to ensure that there are no errors or suspicious activity.  If you find that there are errors on your report then you will want to take the necessary steps to remove them from your report.

The number of homeowner loans, mortgages, that were approved in December 2006, was down to 113,000 approvals from 129,000 in November.

Alone, these figures may be interpreted as evidence that the property market is about to slow, except for the fact that demand still outstrips supply, especially in the area of buy-to-let, and eco-friendly homes.

The Nationwide building society said that house price growth slowed in January, following recent interest rate rises. However, it still grew 1.8 per cent, maintaining an annual 10 per cent increase.

However, people who are anticipating putting their home on the market are still enjoying a ‘seller’s market.’  December is traditionally a quiet month for house buying..

However, approvals are regarded as an important indicator of short-term trends in the housing market. The market expected a short term drop after the Bank of England increased interest rates four times in approximately six months.

Investors are not worried. They still point to the fact that interest rates are still far below historical numbers, and that they are still below the ‘wealth building’ break-off point of six percent.

At £10.6bn the money lent in the form of homeowner loans during December was another record, even though the banks approved less loans, reflecting the strong rise in house prices in the past few months.

The investors are not worried. There is still plenty of room to take out a secured loan to improve a home, or prepare it for the buy-to-let market, and make a substantial profit, especially in the London areas.

If you are searching for a mortgage that is suitable for you and your needs, there is one type of mortgage that you may want to consider, a discount mortgage.  A discount mortgage is a mortgage with an interest rate where a discount is applied to the rate on the loan.  The discount is applied to the lender’s standard variable rate for a set length of time.  The length of time can vary from three months to several years.  Because it is a variable rate, the interest will rise and fall with the Bank of England’s base rate.  As the standard variable rate fluctuates up and down, so will the discounted rate.  A lender will offer you various discounts on the interest rate of the mortgage.

A discount mortgage can be beneficial if you are purchasing a home for the first time, as you can use the money that you are saving with the discounted interest rate to purchase new furniture or to help you redecorate your home.  The longer the discounted rate period is, the more you will benefit, so it would be wise to ask around to ensure you receive the best rate as well as the best discount on the mortgage.

With discount mortgages, early redemption penalties almost always apply and could extend beyond the discounted period.  This means that you could end up tied into a mortgage with uncompetitive rates once the discount on the interest rate expires and it reverts back to the lender’s standard variable rate.  If you change your mortgage during the early redemption penalty period, you will have to pay a fee that can be as much as six months repayments on the mortgage.  It will pay off to search around and compare offers from various lenders.

There are certain mortgages that are aimed to first time buyers.  These mortgages offer deals to first time buyers that they can benefit from.  However, anyone looking into a mortgage for the first time should look over the terms of what is being offered to ensure they are receiving the best value and a mortgage that is right for them.

One type of mortgage that is typically offered to first time buyers is a cashback mortgage.  A cashback mortgage is a mortgage where the lender will give the applicant a sum of money upon the completion of the mortgage.  This sum of money can be used by the applicant for various things, such as solicitor fees, furnishing for the new home, or other expenses involved in a new purchase.  A cashback mortgage can be extremely useful for first time buyers, as they may not have the mean to pay for these additional expenses.  However, with a cashback mortgage there are prepayment penalties that are charged by the lender should the borrower pay off the mortgage early.  These prepayment penalties can be as much as six months repayments on the loan.  Because of the prepayment penalties, a cashback mortgage will mean that the borrower will be locked in to a mortgage for a set number of years with an uncompetitive rate.

The other type of mortgage that lenders offer first time buyers is an introductory discounted rate offer.  This type of mortgage has a low fixed interest rate for a specified amount of time.  This can be beneficial for first time buyers, as the low fixed rate will ensure that the monthly repayments are constant as well as easy to manage during the start of the mortgage.  However, if you do not take advantage of the low interest rate by saving up the additional savings, you may find it difficult to meet the payments once the higher interest rate kicks in.  Be aware of what rate you will be charged once the introductory period is over, and also know when you will have to start making higher payments.  This way you can prepare yourself for when the time comes.

The Bank of England is not expected to increase the interest rate after increasing it to 5.25 per cent.

“The index seems to be showing that consumers are responding to the three increases in interest rates. All of the indices are well below the levels recorded before the first rise in rates,” said Nationwide chief economist Fionnuala Earley, reports Reuters.

“Consumer sentiment remains fairly downbeat, but underlying feelings about jobs and income have not collapsed which suggest a fairly stable economic background,” she added.

Chief economist at Nationwide Fionnuala Earley said the consumer confidence index seems to show that consumers are starting to respond to recent increases in interest rates. Consumer confidents remain downbeat, but feelings about jobs has not collapsed, which suggest a stable economic background, she added.

Nationwide believes that the Bank of England’s increase in interest rates could be the main reason for the fall.  It continues to claim that few consumers feel that “now is a bad time” to make major purchases.

Economic analysts feel that the central bank will hold the interest rates at 5.25 per cent as it takes a decision this Thursday.  While the UK consumer still maintains confidence in the economy, if the Bank of England increases their interest rates again, and consumers lose confidence, the ripple effect will be felt throughout all sectors of the economy.

However, there is no indication that the Bank will increase interest rates beyond the benchmark 6 per cent.  A 6 per cent interest rate is still manageable by most consumers, while allowing them the freedom to borrow a loan for wealth building purposes, and maintaining a reasonable expectation of profiting.

If you are planning on purchasing a property with the idea of renting it out to tenants, then there are a few things you will need to consider.  You will first need the financing to purchase the property, and then you will additional financing for the upkeep of the property.

When you look into financing for the property, one option to consider is buy to let mortgages.  These mortgages are available to those who wish to purchase a property with the intention of letting the property out to tenants.  Because of the increase in property value and the low interest rates that are being offered, many people are starting to invest in property, and buy to let is one form of investing.  A buy to let mortgage differs from a residential mortgage in the sense that lenders require a larger deposit on the loan, typically a minimum of 20-25% on the property value.  The lender will also look at the rent potential of the property, deciding whether or not they will offer you a mortgage based on the potential of being able to rent out the property for a reasonable price.  The interest rate on a buy to let mortgage is also slightly higher than residential mortgages.

If you are able to provide the financing for the purchase of the property, you will then need to consider if you will have enough to cover the upkeep of the property.  Although you automatically expect the rent to cover all the expenses, you will need to make sure that you will break even or profit from your property.  Additional costs you will need to consider when letting out your property include, letting agency fees, service charges, insurance, gas and electrical appliances, furnishing, decorating costs, and legal insurance.  All these costs can add up.  Owning a property and letting it to tenants, can be a big task and a financial risk if you are not careful and outweigh all your options.

If anyone is wondering whether they should borrow money to improve the cost of their home, they need to spend a little time looking at the ‘bottom figures’ of the current housing market.

More than 1,352 streets in England have an average house price of £1m-plus.  In 2000, only 322 streets had an average house or flat value in the seven-figure levels.

According to property information firm Mouseprice.com, this estimate is conservative.  It excludes streets where there have been too few sales to create an accurate average, or there are too few houses to provide an accurate record.

Every day, 15 homes in England and Wales are sold for £1m or more, according to the Land Registry. This includes three sold for more than £2m, a price with monthly mortgage repayments of £14,500.

What does this mean? Millions of people who purchased before the boom, before 2003, are sitting on a fortune.  Many people have seen their personal wealth grow be several hundred thousand pounds within less than five years.

Last year the average house price made the news when it reached £200,000.  Those homeowners who took out 40 year mortgages, and interest only homeowner loans were criticised. However, many of these people have watched their home prices grow to £300,000 in less than a year.

The most expensive place to live in London is Kensington Square. The average value of a home is £5.5m.  However, this is not the top.  Four flats are currently being sold in Hyde park for £85m each.