Nearly half (41%) of people who are facing problems with paying off their mortgage have not sought any kind of financial advice according to the Financial Services Consumer Panel. This is despite seven out of eight of the people who said they were in trouble describing their problems as serious.

Around 65% of people who did seek advice went straight to their Mortgage lender while others went to the Citizens Advice Bureau for help. Opinions of the help received varied from people who said lenders could have done more to help to people who believed that their lenders did everything in their power to sort out the situation. There?s no data on exactly which lenders were the most helpful, unfortunately.

The chairman of the Panel, Adam Phillips, has asked for mortgage lenders to try hard to encourage homeowners to seek advice before the situation spirals out of control. Mr Philips spoke at speech to the Council of Mortgage lenders last week:

?When people get into difficulty with their mortgages, they need constructive help and advice on the best way forward. Mortgage lenders have a duty under the principle of treating customers fairly both to help their customers in arrears and to tell them about independent sources of advice.?

?I am calling on all mortgage lenders to do more to encourage consumers in difficulty to get advice early, before the problem becomes a disaster for both parties.? said Phillips.

If you are one of the many people who are struggling with your mortgage the important thing is not to let it get on top of you, making the situation worse. if you don?t want to talk to your lender right away, considering talking to the National Debtline, Consumer Credit Counselling Service or the Citizens Advice Bureau for independent advice on mortgage debt.

©2012 MoneyBlog. All Rights Reserved.

During the last six months, we?ve seen house prices rising substantially for the first time since 2007, which many have heralded as a sign that the economy is beginning to recover and the housing market will eventually rise back to its former glory. However, experts are now warning that the rise in house prices is only a temporary situation and homeowners should expect prices to fall again shortly.

A report from Nationwide suggests that house prices have risen for the fourth consecutive month in August, along with other figures which all sound like signs of a recovering market:

• The average price of a house rose by 1.6% during August
• Average prices have increases a total of 3.3% between June and August
• Overall, during the first eight months of this year, prices have increased by 3.2%
• The value of a typical property is ?160,224 which 14.4% below the October 2007 peak.

Even the British Banker?s Association has reported a massive 77% rise in mortgage approvals between July 2008 and July 2009, but despite what sounds like a huge jump on paper, approvals remain at an historic low, and financial experts predict that the relative buoyancy on the market isn?t set to continue.

A key sign can be found in house builders remaining wary of the market. Bovis homes reported a ?8.6 million loss during the first quarter of the year, noting that increased mortgage lending is still far behind ?normal? levels. The company adds that the industry faces many threats, including unemployment, the increased supply of property and the future for interest rates.

Lenders are still a long way from backing any large scale increase in the level of mortgage activity as they seek to recoup their loses. Michelle Slade, spokesman for Moneyfacts stated:

?Margins continue to be increased as lenders look to repair dented balance sheets. Normal rules where lenders pass or decrease rates based on the cost of funding seem to have well and truly gone out of the window.?

The low base rate has seen a huge drop in mortgage payments for many homeowners, which has lead to less properties being made available and creating a sellers market due to demand. However, this situation can only be maintained as long as the interest rates remain at a historic low. When interest rises again and mortgage payments once again become a problem for people, we could see the rise in house prices stall completely.

?It’s not difficult to explain why the improvement in housing market conditions may only be temporary,? said Sheena Shah, property economist at Capital Economics. ?After all, not only is the economic backdrop still weak, with the rise in unemployment showing little sign of coming to an end, but lending criteria remain a significant obstacle to buyers.?

©2012 MoneyBlog. All Rights Reserved.

Adverts for personal loans that run during the day could be banned by the Advertising Standards Authority (ASA), according to the Independent newspaper.

Talking to the paper, Chairman of the ASA Lord Chris Smith said: “”I get irritated when I think consumers are being sold something in a very tempting way which is going to have huge financial and personal consequences for them. That to me is irresponsible advertising.”

It seems unlikely that a full ban will take place, but Lord Smith has said that loan advertisements which currently pass as ‘acceptable’ may not get through regulations in the future. The ASA have banned loan ads in the past with Lord Smith pointing out the example of the particularly annoying advertisement for Picture Financial Services that ran a few years ago which saw a woman getting a £25,000 loan over the phone in a matter of seconds.

However, past bans have revolved around adverts that were misleading. This move would see the ASA banning adverts based on their ’social responsibility’ under a new rule from the Broadcasting Committee in Advertising Practice. This brings up all sorts of concerns about how far social responsibility clause will be used to impede free speech.

Those worried should also be aware that the ASA rarely remove adverts and didn’t ban any of the adverts which had the top ten number of complaints last year.

The move could be a serious blow to companies like Ocean Finance who have long since been known for their adverts which suggest ‘easy money’ for those who are willing to put their house down as collateral. The companies take advantage of the non-working audience and cheaper advertising slots.

Lord Smith has stated that companies will be briefed on how they can target campaigns in the future to avoid being banned under the social responsibility clause. This will likely see a greater emphasis put on the idea that you could lose your home if you default on payments and put an end to advertising the deals based on the idea of consolidating existing debt.

©2012 MoneyBlog. All Rights Reserved.

The credit crunch has made finding cheap loans considerably harder for many people. Although loans themselves are still readily available, finding an APR even in single digits has been incredibly difficult for many over the past year.

Building Societies, Banks and other financial institutions have become much more wary about lending money to people. To make matters worse, some have pulled out of the market completely reducing competition and paving the way for more expensive rates. Payment Protection Insurance has also been restricted leading many lenders to recoup loses into the actual interest rate itself.

Luckily there are some signs of light on the horizon for people who have a good credit rating but have struggled to find a loan to match. Several well known companies are offering very promising ‘typical rates’. A typical rate must be offered to two thirds (66%) of all successful applicants.

Amongst the companies offering these rates are popular supermarket retailer Sainsburys. The finance division of the company are offering loans at a rate of 7.9% APR providing you sign up to the Nectar loyalty scheme. This isn’t much of a catch however – the scheme is free, easy to sign up for and can actually save you money on various services such as electricity and telephone bills. The minimum loan amount to receive the low APR is £5,000.

Similarly the AA are offering an 8.0% APR loan providing you sign up through Moneysupermarket.com and apply for a minimum loan of £7,000. If you’re looking at borrowing far less than this, the Post Office has filled the gap, offering an appealing 13.9% on loans as low as £2,000. Abby Personal Loans offer an even better 8.9% for the same minimum amount, but you do need to be an Abby customer to take advantage of their offer.

As with any loan, it’s your credit rating that will finally decide your rate. These rates are given to the majority but not all successful applications. If you’ve affected your credit score in the past there’s a good chance you’ll either be rejected or offered a much higher rate.

It’s also important to watch out for the small print and make sure you aren’t paying hidden charges for administration or setup costs.

©2012 MoneyBlog. All Rights Reserved.

Sainsbury’s Finance has unveiled a deal this week on low interest personal laws – providing you own the companies nectar loyalty card. Rates for customers who already own the card and apply online are 7.9% APR for loans ranging between £5,000 and £15,000.

The supermarket giant previously offered loans at a rate of 8.1% which it still offers to customers who do not have a nectar card. However, it seems like this will now be a unnecessary rate for most people as there is no ‘limit’ in terms of applying for the nectar card scheme. Many customers have applied for the card and then applied for the loan, dramatically increasing interest in the stores loyalty system.

The nectar card can also save you money outside of Sainsburys, especially if you have any home utilities supplied by companies like EDF Energy and TalkTalk who use the nectar scheme in their billing system.

Head of loans at Sainsbury’s Finance, Steven Baillie commented on the logic behind the decision: “We’re constantly looking for ways to reward our customers and with this offer, we’re giving the Sainsbury’s shopper a preferential rate, enabling even more people to enjoy the benefit of banking, as well as shopping with us.”

Sainsbury’s finance was also quick to point out that it is currently one of only four financial service providers offering a typical APR of less than 8% for similar sized loans. How long this will remain the case is unknown.

Offering preferential rates for customer loyalty is quite a common theme with many institutions offering better deals for long term and financially active customers. Optimists are predicting that the move from Sainsbury’s, combined with larger reaching effects such as improvements in mortgage rates, are signs of a slowly recovering economy.

©2012 MoneyBlog. All Rights Reserved.