‘Featured’ News
Government Plan to Aid Mortgage Liquidity
Posted 2008-04-29
With the mortgage and secured loans market suffering from the fallout of a global credit crunch and finding it increasingly expensive and difficult to obtain funding from the chief money markets with the resultant greatly decreased liquidity, the government has taken unprecedented steps to launch what is possibly the largest targeted initiative made by the financial authorities in recent times.
The new initiative, approved by the Conservative Party who are keen to initiate the plan immediately, will encourage the exchange of mortgage based assets for government bonds, thereby driving the mortgage market and secured loan markets forward again by increasing liquidity.
Despite some objections, notably from Liberal Democrats who fear that the government initiative could incur greater financial liability for the taxpayer, the Conservative Party shadow chancellor indicated that it was imperative to unlock the financial system in order to relieve the difficulties being faced presently by consumers involved in the mortgage and secured loan sector.
As a result of the pandemic credit crunch, passed on initially from the United States mortgage markets last year, the UK market has experienced significant difficulties, including a sharp tightening of lending criteria, a vastly reduced number of mortgage products available, and not least an increase in the overall cost of borrowing despite the Bank of England announcing three successive cuts in the base rate since last December.
It is hoped that the implementation of the new measures will help to diffuse the growing criticism by some financial authorities, including the Treasury, over the amount of time the Bank of England has taken to seriously address the growing issue.
The government initiative comes on the back of a recent report stating that already home and mortgage markets have slumped in the region of 50% within a year. According to published figures, properties sold through estate agents have dropped by 50% in comparison to the previous March, and the number of consumers successfully securing a mortgage has consequently reduced by around 46%.
The Report from the National Association of Estate Agents, comments that its members were responsible for selling 14 properties on average in March 2007: In the same month of 2008, the average sale per member was down to just seven. Unsurprisingly, comparisons are now being made with the period during the late 1980s when the property market was its lowest ebb in recent history.
As it currently stands, the amount of actual mortgage lending has now declined to the lowest monthly figure since 1997.
According to the British Bankers’ Association (BBA), the figures are the worst since the organisation began compiling approval data, with just 35,417 new approved mortgages in March this year, down 18% on the previous month.
For many of the hardest hit consumers in the present climate, the options are no longer between taking out a new mortgage, applying for an unsecured loan or remortgaging, but have come down to a choice of filing for bankruptcy, taking up a Debt Management Plan (DMP), or an Individual Voluntary Arrangement (IVA), with the Citizens Advice Bureaux and government and corporate debt management agencies being swamped for advice by financially harassed members of the public.
However, the independent financial site Debtwatchdog has pointed out that it is not always easy for these people to get the correct advice, with many financial institutions, together with bank and credit card companies, reluctant to encourage consumers from taking up an IVA, or, in Scotland, a Protected Trust Deed (PTD), and thereby indirectly reintroducing the stigma once attached to insolvency.
The uSwitch financial comparison website appears to put some of the blame for the current financial situation on the financial institutions themselves, claiming that 70% of unsecured loans were issued last year without any proof of income.
Read Government Plan to Aid Mortgage Liquidity
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Understanding Car Insurance Discounts
Posted 2008-04-24
Trying to save money wherever you can is important to us all. Car insurance should be no different. Do not assume that your agent knows everything about you and your vehicle.
Drivers should take advantage of all discounts that many providers offer, that can significantly reduce the cost of car insurance. Understanding discounts and how they can affect auto insurance premiums can help smart shoppers make better decisions about their coverage and possibly save themselves some money in the process.
Read below to identify possible discounts that could help you save on auto insurance this year. Other than discounts, there may be some other ways for you to save on your insurance premiums. We will go over several discounts that can help with your current situation.
First, there are discounts for Auto Safety features. Certain states will give you discounts for anti-lock breaks. Make sure you know if it is two or four wheel anti-lock break vehicle. Automatic seatbelts and airbags are frequently discounted on your insurance premiums. In most states, a defensive driver class discount may apply. If the principal driver usually 55 years old or older has completed an approved defensive driving class a discount could apply. Keep in mind that most states will only approve this class if it is voluntary meaning that it was not the result of a violation or infraction.
Some insurers will give you a discount for having multiple vehicles. In some cases, this will only apply if you have two or more drivers. If you have a clean driving record, meaning you do not have any tickets, accidents or suspensions in the last three years (some companies require five years) then you could be eligible for a safe driver’s discount.
Many companies will reward you with staying with the same insurance company for many years without any accidents reported. They will offer you a renewal discount. It makes sense, you have carried insurance with a company for several years, and have not had an accident, your insurance company likes you and wants to reward and keep your business. Some companies honor you with a discount if you had prior limits on your previous policy. They discount you because they understand you are a better risk.
Conversely, if you do decided to change insurers a proof of prior insurance discount may apply. Most insurers request at least 6 months of consecutive insurance from the previous insurer. If you are a full-time student who meets certain grade requirements and are unmarried and usually under 25 years of age (some states the age is 21) you could be eligible for a good student discount. If you own a home, including condominium, town home, or mobile home, which is used as a principal residence, a discount could apply. Military personnel either currently active or retired from any branch of the US military a discount could apply. If your vehicle is equipped with an anti-theft device, a discount could apply.
You could lower the cost of your insurance in other ways.
For people who own older cars, it may not be necessary or cost-effective to protect them with collision and comprehensive coverage. By comparing the book value of your vehicle and the premium that the insurer has offered, you may find that it cost as much for the insurance as it does for the vehicle. If the car is worth less than $2,000, you will probably spend more insuring it than it is worth. The whole idea of driving an older car is to save money, so why not get what is coming to you.
In addition, keep in mind that the type of vehicle you buy could greatly affect your premium. A flashy red sports car is usually going to cost more to insure than a mid sized sedan. This is also true of vehicles that are on the list of most stolen. There are many ways that policyholders can save on their insurance. Knowing more about auto policies and premiums can help consumers take advantage of less obvious discounts while ensuring that they have the appropriate protection for their vehicles. The last way to save is to assume more risk. If you chose higher deductible on your Personal Injury Protection or Comprehensive and collision coverage will lower your premium as well. The deductible is the amount of money you have to pay before your insurance company begins paying the rest.
Understanding how discounts affect your insurance rates is important to save you money.