Where To Find Credit After The Crunch

This is obviously going to be difficult! We have all been through a turbulent time and some say we are not through it yet, all sectors look battered and bruised. The private sector has been badly hit and those that have come through the other side (if we are indeed through) are risk adverse, the scar of the recession lingering on and festering like an infected wound. The public sector hasn't fared better but they have only really started to see the pain. Believe you me it's only going to get worse there!

It goes without saying it would be incredibly risky to up sticks and embark on a new career with decent jobs so scarce. For most though, it could be the only way to secure a pay rise, with wages freeze's still common, on top of jobseekers and other benefits to be slashed by the coalition. Combine this with the scarcity of credit and the comfortable situation that arose, particularly in Britain, Europe and US, of owing and being owed high amounts in a cycle of debt.

So onto the scene comes Jonathan Davis, a top wealth management advisor and a man whose expertise is regularly featured across the UK media. This man is going to know a thing or two about what is going to happen with money markets and specifically lending trends over the next 3 or 4 years. It started to become abundantly clear that serious damage like this will take long time to clear up. Deep wounds don't heal overnight, we have just been through major surgery and the surgeon is still looking for his watch. Jonathan, as incisive as ever, explains that this problem has been building up for a significantly long time, "the big picture is that for 30 years, we've had a growing debt problem". Of course it's not just us this affects all the major markets in the West. Debt in the West I suppose! It all bubbled in 2006-2007, and now we're experiencing the hangover of the debt party. I refer you to the 1930s, and the depression based upon de-leveraging effects following, by then, the biggest debt bubble in history during the 1920s." Jonathans next comment made me think, and shiver, " This time it's from the biggest debt bubble of all time."

So how do the banks figure in this mess? "The banks are, technically, insolvent themselves. You'd be hard pushed to find a bank or building society in the UK that is solvent, when real assets are taken into account." Jonathan goes onto explain how the bank's assets may not help, "It's all well and good to have property, but if that lies vacant, and there's a loan outstanding, then it's a loss." We are invited to consider the towns we live in r travel through. Try taking a look around, everywhere you see 'To Let' boards everywhere. At least 10% of shops are lying empty. Then you have to think of the supporting structures and building such as offices, factories and warehouses. "You have an enormous swathe of bad debt coming down the line. That's one of the reasons banks are reducing lending, because they know they will be cutting red ink right across the balance sheet in due course. On top of that they also have the wider G20 issue, of what's called Basel 3, which is a change in the regulations of international banking," This looks bad, actually this looks worse than that.

As we call for tighter banking regulations, it still seems as though the average British Citizen is the one bearing the brunt of the current state of affairs. Amidst the bailout controversies lays the Basel 3 agreement, which emerged from the G20, which calls for banks to have a higher level of constant cash reserves. As a result, the banks are limiting what they lend, a level that is unlikely to return to its pre-recession levels for quite some time. Davis reiterates this, "Basel 3 is to prevent a future bubble emerging, followed by a crash. We're still in one crash right now, and it will continue for years".

From this I can see we can safely assume that lending restriction are going to stay in place for some time to come. One thing I certainly would be interested in is how this all affects interest rates, in terms of are we going to see massive rates just to be able to borrow money? "People are already massively in debt. The amount of debt in society is more than there ever has been. I read surveys from big financial institutions that say if the cost of living goes up 100 per month, people couldn't afford to live- that's how bad it is,"

While the experts are always worried about people turning to the more shady elements to gain credit, the fact interest rates are up and criteria is simple according to Davis "The banks are actually discouraging folk from taking on more debt by increasing interest rates, way beyond the base rate- really it's all they can do, it's not because they want to."

"So the trend in the future will be that people will not be taking on more plastic credit, they will not be increasing consumer spending, they will not be taking on mortgages, because they simply can't." So we can't get into debt, because nobody is prepared to lend. Jonathan goes onto explain that this brings us full circle to the original hypothesis, which is that the banks have got no money. Hence they can't lend. So in the UK we have the smallest quantity of mortgages being underwritten for a decade.

However, "If you're talking about over-priced, bad loans, they will always be advertised on TV, and they will pick up market share." Unfortunately these companies do exist and anybody considering dealing with this type of organisation first really need to take professional advice, as Jonathan say "really once you start dealing with those types of businesses, you're on a hiding to nothing- they'll just take your house off you for the sake of a few thousand pounds." So be careful and take advice, probably debt advice.

We all know that crystal balls don't work but Jonathan Davis makes sense, real sense. We have just run out of petrol and now we are walking in the rain. It is going to take time to get use to it but we are going to have to. So what about credit after the crunch? Probably not advisable unless under professional advice. Like a lot of things in life!

James writes for Just Remortgages one of the UK's top sites for the latest remortgage rates and best remortgage deals

categories: economy,economics,jobs,unemployment,mortgage,refinance,debt

A Guide To Selling Your House And Renting It Back

Overstretched homeowners are anything but a new phenomenon, but recently the number of people who fit this category has grown exponentially due to the continuing global economic hardships. As a result, many sell and rent back companies have begun to surface recently in an attempt to take full financial advantage of the situation. The truth is that overstretched homeowners are being targeted by these companies and there is no end in sight to this trend. In this brief article we will examine the role of a sell and rent back company, and take a closer look at who should and should not enlist the services of one of these companies.

A sell and rent back company, as the name implies, is a company that will buy your home quickly, usually well below the market rate, and rent it back to you based on the current rental market rate. Sell and rent back companies typically pay no more than 60-70 percent of what your home is worth at the time, sometimes less, and many will provide you with the option to buy your house back at a later date based on the current market rate.

Using a sell and rent back company certainly has a few benefits. If you are buried in personal debt, in arrears on your mortgage loan and you fear you may lose your house anyway, a sell and rent back company can at least help you recoup some of your money from the purchase of the home, and in addition, you'll get to stay in your home as long as you make your rental payments to the sell and rent back company.

If you're thinking about using a sell and rent back company you should first and always do some research, looking into not only the advantages of this type of arrangement, but the possible pitfalls, too. When you do business with a sell and rent back company, don't be fooled into thinking this is anything but a business transaction-one that the buyer will profit from and not you. Sell and rent back companies target people who are struggling with debt and they profit from their misfortune.

Nobody wants to completely lose their house if they can avoid it, but avoiding this may be difficult for those people who have lost their jobs or become muddied in debt. In these instances, a sell and rent back company might be just the option they need to stay in their home forever-only this time as a renter.

To read more articles, try www.magazine-articles.com or www.thinktankconsortium.com

Learn About Sell And Rent Back Companies

Over the last few years of economic depression, many people are finding it hard to cope with financially balancing their family, lifestyle and a mortgage. Disposable income may seem like a myth, only available to the super rich as you continue to struggle with your debts and try to have a decent lifestyle. Though it doesn't need to be like this, there is a way out.

One way that could help you to a massive extent in the short term is selling your property to rent back. To summarize this concept, the answer is in the title; certain organizations will offer to purchase your property at a particular rate, usually between 60 and 70 per cent, and a contract enables you to continue living in the property, paying monthly rent. This will free up capital that you have invested in the property over the course of your mortgage.

If you have been experiencing crippling personal debt and you are struggling to find money to pay for all your monthly expenses, then this is a great way to release the equity that has built up in your property. Sell to rent back is one of the quickest ways to gain a large sum of money in a very short space of time, and can solve your short term debt problems.

If you sell your home and rent if back, then, to put it simply, you will not have to relocate. If you have family or work commitments near to your current residence then it is probably quite important that you don't have to move house. With this service, you are able to continue living in the same property after you sell.

Because there is so much you could lose; you always need to make sure that you research all your options before you commit to any one company. An internet search will bring up all the companies that offer this service, and will also help you with finding customer reviews of their service. There are internet forums that specialize in money matters and there should be your first port of call when looking for reviews. Remember to also check if the company you have chosen in regulated by an appropriate financial authority.

Once you decide on a company, you still need to be involved in the selling and renting process by reviewing contracts, terms and conditions and other documents. Make sure that the company is being completely transparent in their actions and if there is something that you don't agree with in the contract, confront them and be prepared to walk away as there is a large amount of money at stake.

Next : www.rentmyhouseback.com