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UK Payday Loans Company Investigates The Implications Of Rising Interest Rates
UK Payday Loans Company Investigates The Implications Of Rising Interest Rates
Cash Choice, a UK payday loans company investigates the implications of further rises in interest rates. One revelation is that if the mortgage rate increases by a further two percent points, around 2.9m homeowners will be dealing with home loans
Victoria,
London,
United Kingdom
(sardnews.org)
10/06/2011
In February 2012 there will be a window of opportunity in the United Kingdom for the Bank of England to raise the interest rates. If the rate of interest rises, it is possible that 3m home owners won’t be able to pay their mortgages. This is calculated by a rise of two per cent.
About 3m home owners will be struggling to pay their mortgage, if the rate of interest rises by just two percent points. This is equal to more than one-in-three (37pc) of all people holding a mortgage.
According to guidelines of the Financial Services Authority, it is estimated that around 1.6m mortgage will be considered unaffordable even if the rate of interest increases by less than two percent points. People are worried that the rate of interest may increase by Thursday despite last month's GDP figures which reveal that the growth of the UK economy in the first quarter of 2011 was only 0.5p c. This may invite serious problems in terms of financial emergencies for the families who are already bearing tax raise, unexpected high inflation and serious widespread job losses especially in the public sector.
If the rate of mortgage increases by two percent points, around 2.9m homeowners will be having home loans that breach the guidelines of regulator's affordability, according to the figures released by the Council of Mortgage Lenders (CML). According to FSA, a mortgage is considered to be affordable if the level and terms of mortgage enable the consumer to fulfill the current and future payment responsibility fully, without resorting to rescheduling debt payment or further debt relief, averting arrears accumulation while allowing an acceptable consumption level.
It is recommended for families whose financial conditions are shaky to take a fixed mortgage rate. This type of mortgage may be a bit costly in the short run but it helps to protect the income of these families against any kind of after-shocks due to rising interest rates. During the beginning of the year, the cost of a five-year, fixed-rate mortgage has increased by 2,500 pounds on fears of hike in interest rates by the bank of England. Due to this, substantial number of borrowers is not in a position to afford a fixed rate mortgage deal.
Moreover, the falling prices of the houses and strict lending conditions have made it almost impossible for the homeowners to remortgage their homes elsewhere and hence they have to stick to their current deal on their mortgages.
About Cash Choice
Cash Choice is pleased to provide customers payday loans ( http://www.cashchoiceuk.co.uk ) when needed to handle their short-term cash-flow needs; and offer a quick and easy loan approval process.
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About Cash Choice UK
Cash Choice is a business set up to help you with any financial emergency by offering you a cash advance. We realise that as organised as a person might be, there are situations that can take you by surprise.
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