The Debt Test: Are You Making Out a Mountain Out of Your Mortgage?

According to the Council of Mortgage Lenders, first-time buyers are the most susceptible group of homeowners to debt, as they are more likely to have higher loan-to-value ratios and commit a higher proportion of their income to mortgage repayments. Despite their susceptibility to debt, there is evidence which indicates that insurance take-up and employee benefits provide recent first-time buyers with a safer foundation than the general population of mortgage borrowers.

The Council of Mortgage Lenders (CML) has become increasingly concerned about the ability of current and future home-buyers to pay back mortgages in the event of changing circumstances. Over the past five years, the CML and its partners within the Sustainable Home-ownership Initiative, have sought to improve this issue. Contributing factors to the problem include increasing personal debt levels and a less certain economic environment. This has provoked concern about the sustainability of home-ownership and consumer understanding of financial products, ensuring that the issue of mortgage risk is at the top of the agenda for the UK Government, industry regulators and public as a whole.

Over the last year, the Sustainable Home-ownership Initiative has debated the most effective move forward to increase home-buyers' awareness of potential debt and protection from unforeseen events with insurance products, specifically Mortgage Payment Protection Insurance (MPPI). The Financial Service Authority is leading the way to help raise awareness of debt prevention with the "Debt Test" initiative.

According to research carried out by the Council of Mortgage Lenders, two thirds of recent first-time buyers say that an online debt test designed to help them assess potential triggers of debt and highlight future borrowing risk would be useful.

The mortgage market is also watched very closely by the consumer research website, moneynet. In addition to tracking market behaviour, property values and homeowner incomes, moneynet have endeavoured to become increasingly proactive about educating their visitors, so they fully understand the complexity of the relevant financial products. In addition to their mortgage comparison service and mortgage protection options, moneynet published a comprehensive mortgage guide earlier this year, as part of its series of consumer product guides. Moneynet isn't the only site to offer enhanced information services; Which? also offers a detailed mortgage guide and mortgage search tool powered by Moneyfacts. Both "Switch with Which?" and moneynet take the consumer through the types of deal available, detailing the different interest rate structures including fixed rates, capped rates, discounted rates, stepped rates and standard variable rates.

The CML state that there is much evidence to show that first-time buyers appreciate this information, including the "debt test", more so than older households. This is perhaps due to the fact that many first-time buyers have to borrow much more for their initial property, due to high prices, and that they have generated more personal debt than their parents' generation. Whilst personal debt remains a major concern for the finance industry, the government and the public, financial stability remains possible with education.

* * * * * * * * * * * *

Resources:

http://www.moneynet.co.uk/mortgage-guide /index.shtml

http://www.switchwithwhich.co.uk/mortgage/index.html

http://www.cml.org .uk/

Rachel writes for the personal finance blog Cashzilla:

http://www.cashzilla.co.uk/

---

Google News Updated : Tue, 07 Oct 2008 20:50:00 GMT Bernanke hints at possible interest rate cut - MarketWatch The Associated Press Bernanke hints at possible interest rate cut MarketWatch - 31 minutes ago By Greg Robb, MarketWatch WASHINGTON (MarketWatch) - Federal Reserve Chairman Ben Bernanke opened the door on Tuesday for a possible interest rate cut to help rescue the economy from a severe downturn, admitting that the global panic in the financial ... Video: Bernanke signals possible rate cut ReutersVideo Bernanke: Economic outlook weaker CNNMoney.com New York Times - Forbes - Reuters - MSN Money all 988 news articles Publ.Date : Tue, 07 Oct 2008 20:18:10 GMT Thai Army Sends Troops to Help Police Keep Peace - Washington Post Voice of America Thai Army Sends Troops to Help Police Keep Peace Washington Post - 4 hours ago Thailand's military agreed Tuesday to deploy hundreds of unarmed soldiers to the streets of Bangkok to help police restore order after violent clashes between police and protesters that left at least 1 person dead. Video: Raw Video: Tear Gas Fired at Thai Protestors AssociatedPress Troops deployed as one dead, hundreds hurt in Thai protests AFP Reuters UK - Hindu - eTaiwan News - The Standard all 1,327 news articles Publ.Date : Tue, 07 Oct 2008 16:12:03 GMT Qantas Involved in Another Air Incident - New York Times NEWS.com.au Qantas Involved in Another Air Incident New York Times - 25 minutes ago By Liz Robbins It has been 20 years since Dustin Hoffman’s character Raymond Babbitt in “Rain Man” made Qantas synonymous with air safety, claiming he would only fly the Australian airline because it had never crashed. Qantas passengers arrive in Perth after mid-air ordeal ABC Online Fifteen badly hurt as Qantas jet drops Sydney Morning Herald The Standard - Taipei Times - United Press International - NEWS.com.au all 366 news articles Publ.Date : Tue, 07 Oct 2008 20:24:06 GMT AIG's ex-CEOs blamed for crisis - CNNMoney.com Los Angeles Times AIG's ex-CEOs blamed for crisis CNNMoney.com - 1 hour ago House panel chairman says executives got undeserved riches, while ex-CEOs blame accounting rules and market conditions for leading to $85B bailout. Joe Cassano: The Man Who Brought Down AIG? Washington Post AIG CEOs Blame Each Other, Accounting for Insurer's Downfall Bloomberg Wall Street Journal - Financial Times - New York Times - Forbes all 768 news articles Publ.Date : Tue, 07 Oct 2008 19:11:18 GMT Cough, Cold Drugs Not for Kids Under 4 - WebMD CBS News Cough, Cold Drugs Not for Kids Under 4 WebMD - 2 hours ago By Miranda Hitti Oct. 7, 2008 -- Don't use over-the-counter pediatric cough and cold drugs in kids younger than 4. Leading makers of over-the-counter pediatric cough and cold drugs are putting that message on the products' labels, according to the ... Cold, Cough Medicines for Children Get Added Warnings (Update3) Bloomberg Drug Companies Say No Cold Meds for Kids Under 4 Washington Post Chicago Tribune - New York Times - Bizjournals.com - The Associated Press all 1,485 news articles Publ.Date : Tue, 07 Oct 2008 18:48:20 GMT Wells Fargo may get lion's share of Wachovia deposits: report - MarketWatch Sify Wells Fargo may get lion's share of Wachovia deposits: report MarketWatch - 32 minutes ago By John Spence, MarketWatch BOSTON (MarketWatch) -- Wells Fargo & Co. may get as much as 80% of Wachovia Corp.'s deposits, with the remainder likely going to Citigroup Inc., according to a published report Tuesday. Citi, Wachovia, Wells temporarily halt litigation Bizjournals.com Wachovia shares waver as Citi, Wells Fargo wrangle Forbes BloggingStocks - Washington Post - New York Times - CNNMoney.com all 7,781 news articles Publ.Date : Tue, 07 Oct 2008 20:17:51 GMT Sleuth's Presidential Debate Watch Game - Washington Post Sleuth's Presidential Debate Watch Game Washington Post - 41 minutes ago Tonight's debate watch games probably won't be as much fun as last week's Palin Bingo. But don't fret, there are still games to be played during this second presidential debate between John McCain and Barack Obama. 'Aggressive' debate expected between McCain, Obama CNN * McCain looks for way to stop Obama's momentum Reuters The Associated Press - MSNBC - U.S. News & World Report - TIME all 1,199 news articles Publ.Date : Tue, 07 Oct 2008 20:08:21 GMT RSS Feed Reader Increase Traffic

PARLOT::Ebooks, Scripts, Websites, and more...

Adsense websites

Mortgage Debt Elimination in 5 to 7 years!

Mortgage Debt Elimination shows that most home loan debts will... Read More

Gearing Up for Bad Credit Mortgages

Mortgage would have never happened, had mortgages been a no... Read More

Flexible Mortgages - Offering Relief from the Fixed Mortgage

A pension mortgage may seem lucrative at the first sight.... Read More

What to Really Expect for Closing Costs

Closing on a property is a very challenging time for... Read More

Home Mortgage Lenders - How to Find A Good Mortgage Broker Online

Mortgage lenders have set up shop online, but they aren't... Read More

Stock Market, Bonds, Deposit Account, Cash, Equities, Unit Trusts - Few, Just Few of the Ways of Sav

Man has been known for continually simplifying things in his... Read More

A Guide to Getting a Home Improvement Loan

If you've got a few things around the house that... Read More

5 Steps to Getting on Top of your Mortgage

Getting on top of your mortgage so you can pay... Read More

Fees Paid To Brokers By Mortgage Lenders Are Far Too High

Procuration fees paid by some sub-prime lenders are too high.Fact.There... Read More

Look For a Great Mortgage Online

People who are looking for a mortgage today have many... Read More

Mortgage Loan Most Bankers Wont Give May Be Exactly What You Need to Buy or Refinance Your Home

A few years ago, a loan officer who worked for... Read More

Bridging Finance Basics

Bridging finance is a short-term loan that is used as... Read More

Making Sense of Mortgage Speak

Applying for a home loan can be overwhelming. You will... Read More

Mortgage Advice

In the US today more households have mortgages than ever... Read More

Home Mortgage Quotes Online - How Do They Compare To a Quote From a Broker in The Real World?

Online home mortgage quotes are very similar to the quotes... Read More

What You Dont Know About The Real Estate Process, Some Inside Secrets

Some people in the real estate industry have a terrible... Read More

Refinance Your House

If you have seen all the advertisements regarding refinancing your... Read More

Where To Find The Best Rates For Your Mortgage?

As with all of my articles this will be based... Read More

Applying for a Home Loan

Applying for a home loan may not be the most... Read More

New Home Loan - 3 Tips To Speed Up The Mortgage Loan Approval Process

Imagine this: you've found the perfect house, and feel lucky... Read More

Buying a Home With Bad Credit - Why a Recent Bankruptcy Will Not Stop You From Getting Approved

Buying a home with bad credit is possible with the... Read More

A Home Equity Loan ? Is It For You?

Home equity loans are often touted as being the solution... Read More

Real Estate Tip: Escrow Accounts -- Do You Really Need Them?

If you have a mortgage on your property, whether it's... Read More

Finding the Best Home Improvement Loan Rate

If you're looking for a good home improvement loan rate,... Read More

Follow A Few Simple Steps To Make Shopping For Your New Home Loan A Little Easier

It is likely to be one of the largest purchases... Read More