Those consumers who are concerned about managing their money in a time of increased economic strain should consider investigating ways in which they can lessen the burden they are under, it has been suggested.
In research released by MoneyExpert it was revealed that mortgage payment breaks - in which homeowners can stop repaying this area of financial demand for an agreed period of time - may become more sought-after by homeowners. Furthermore, it was indicated that products with this facility have become more popular over recent years. At present it was revealed that 58 per cent of the fixed-rate and discounted mortgages provide a payment break option. However, in September 2006 this stood at just 44 per cent. The rise in mortgage payment break facilities was partially attributed to calls by Alistair Darling, the chancellor of the exchequer, for money lenders to help consumers manage their finances during the credit crunch.
Following on from taking some time out from making mortgage repayments, it may be possible that consumers can manage other demands on their finances with greater ease. Such areas could well include personal loans, store and credit cards, household bills and council tax.
It was indicated that payment holidays are often taken if homeowners lose a source of income or choose to start a family. Opting to delay mortgage repayments was also revealed to be popular for those who decide to take a career break or become unemployed.
Sean Gardner, chief executive of MoneyExpert, said: "With around six in ten mortgage products coming with a potential payment holiday written into the terms and conditions, cash-strapped homeowners can at least enquire about taking a break. Taking a payment holiday will need to be agreed with your lender and just because there's a facility for it doesn't mean your bank will let you off repayments easily. In fact while lenders are struggling your argument will need to be watertight - but banks would rather know you're under the cosh now and intend to do something than wait until you're defaulting because you can't afford the repayments."
He went on to report that selecting a deal which provides the opportunity to take a break from repayments could be an attractive move for those looking to secure a competitive offer in a time of "the new tougher mortgage marketplace". However, Mr Gardner reminded those homeowners who put off making their monthly payments for a period of time that they still will be charged interest, which will continue to be added on to until they complete repaying the source of debt.
For those consumers who are looking to further reduce pressures on their spending, taking out a secured loan might be of assistance. In opting for this type of loan as a means of debt consolidation, borrowers may be able to meet various financial demands - whether it is mortgage payments or credit card bills - at once, leaving them with a single affordable repayment to make each month. This might be of particular assistance as earlier this month, moneysupermarket stated that those homeowners who do not have a mortgage protection insurance policy might find themselves falling behind with repayments as redundancy and property repossession levels rise.
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