Could your finanaces be putting you on a 'Debt Blacklist'?
It is estimated that one in six people could soon find themselves on a debt blacklist as creditors become tougher and refuse mortgages, credit cards and loans.
During 2006, over £7 million was refused by typical lenders but this figure is forecast to rocket to 8.6 million and possibly beyond by the year 2011. Thousands of Britons are already feeling the pinch as they struggle to survive financially from day to day.
Since 2006, house repossessions have risen by over 30% along with a huge increase in county court judgements and defaults. This has urged many building societies, banks and other lenders to tighten their screening process to rule out risky applicants that have the potential to become bankrupt.
This is a stark contrast to the frivolous way that finance gurus used to offer money to anyone and everyone in the past. There were very few credit checks and money was offered with little reassurance of a customer’s ability to pay. In some ways, this may be a responsible move away from the easily accessible debt traps for first time borrowers, but for people experienced in getting loans and credit cards it could make things a lot harder should they have a couple of tarnishes on their credit record. For people already close to a debt solution
Many British lenders have now removed their sub-prime mortgages. Self-certification mortgages are also being cut and many loans will increase by 2.5 percentage points. This could add an extra £150 per month to a £100,000 mortgage.
These measures are being implemented because it is becoming more and more difficult for British banks to source their funds from international markets. This is due to the US suffering huge losses in the sub-prime mortgage market where thousands of people were unable to meet repayments.
