According to figures released by the BBA, the British Bankers Association, the number of mortgage applications that are being approved has continued the steady rise that it had shown over the last 6 months. This could be good news for consumers that are struggling with chronic debt problems, since a remortgage, or a secured loan, can offer an alternative to debt management, a Trust Deed or an IVA.
The number of mortgages that were approved in May rose to just over 31,000, which is an increase of 15.8% over the same month in 2008. The BBA was cautious about the future however, and said that the increased number of approvals did not signal the end of the housing crisis, and they expected the market to remain subdued for some time to come.
Up until the start of the credit crunch, a remortgage, or a secured loan, was a very popular way to consolidate debts. However when the economy ground to a halt, and house prices began tumbling, the banks simply stopped lending. All of a sudden borrowing, as a means to get out of debt, was no longer an option. This meant that the only debt solutions that were open to many people were non-borrowing options, such as Debt Management Plans, IVAs or Trust Deeds. For many individuals, faced with unaffordable loan repayments, and out of control credit card debt, there is now another solution available to them.
Debt advice experts are cautious when it comes to recommending remortgages and secured loans as a way of consolidating debts. When you borrow money in this way, you will be required to put your house up as security, and that means that your home could be at risk if you are not able to make the monthly payments. Furthermore, the interest rate could mean that you will be paying for your debts for many years to come.
