Only a few years ago, the prospect of a debt consolidation mortgage was often hailed as the way forward. And its clear to see why. Homeowners were getting in to increasing unsecured debt - in 2007, all debt in the UK (around Ł135tr) exceeded GDP for the first time (around Ł133tr) - while interest rates were temptingly low. In October 2003 for example, the base rate stood at just 3.5 per cent. As a result, many homeowners were persuaded to borrow more of this cheap money against their homes - which of course were rocketing in value - and pay off more expensive unsecured debt like credit cards. This became known as a debt consolidation mortgage.

How does a debt consolidation mortgage work?
But, really a debt consolidation mortgage is just another name for a remortgage or a further advance. The reference to debt consolidation is simply what the homeowner does with the money released. A remortgage means when you switch lenders and increase your borrowing in the process, whereas a further advance means sticking with the same lender and deal but borrowing more against your property. Either of these types of further borrowing is widely referred to as a debt consolidation mortgage.

What are the pros of a debt consolidation mortgage?
A debt consolidation mortgage is very useful in terms of the fact it keeps all of your borrowing in one place. This means there are fewer Direct Debits to organise or fewer repayments to miss as, clearly, you have fewer creditors. Another bonus of a debt consolidation mortgage is that, while mortgages rates are not as low as they once were, they are still a lot cheaper than the rates payable on credit cards, store cards, overdrafts and personal loans. This means that your debt consolidation mortgage will leave you safe in the knowledge you will not be paying eye-watering rates of up to 30 per cent APR on any borrowing.

What are the cons of a debt consolidation mortgage?
However, equally there are some downsides to a debt consolidation mortgage. The first one is that the one new loan you have secured against your home, is payable over a longer period than the five-year term of a personal loan for example, meaning that what you save in the rate of interest, you may pay anyway in the length of time the debt consolidation mortgage runs for.

The other downside to a debt consolidation mortgage is that, when you are upping the loan secured against your home, it relies on the fact that house prices are going to go up, as they have done over the last 10 years by 197 per cent, according to Halifax figures. But these days are over. Both house price indices from Halifax and Nationwide building society are predicting that house prices will stall at 0 per cent by this time next year (January 2009). So you could find your debt consolidation mortgage has upped your mortgage to a greater chunk of your homes value than you originally thought.

A debt consolidation mortgage is worse news still if house prices fall as it could put you in negative equity faster than the natural decline of house prices would have done. Being in negative equity will often prevent you from moving home as your mortgage - alongside your debt consolidation mortgage - is now larger than the value of the house.

Seeking help from an experienced broker like TMBL is therefore always a good place to start before taking on the serious borrowing that is a debt consolidation mortgage.

About Author

TheMortgageBroker.co.uk provides expert advice about mortgage introducers as well as property developers. Get answers for your lending and financial questions from an expert firm, visit us today!

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Tips for Booking Trips on All Budgets—from $1,000 to $1,000,000

“Kavin compares cruise ships and yacht charters to showcase the biggest advantage of the latter: personalized comfort.”
—Soundings

“Charter cruising comes in many flavors, from fully crewed luxury megayachts to pilot-your-own bareboats, and Kim Kavin has sampled just about all of them.”
—Offshore

Say good-bye to lengthy security lines, overpriced piña coladas, and jam-packed shore excursions. Never again will your cruise vacation include jostling with crowds, squishing into a kiddie-filled swimming pool, or rushing back from a land tour in time for a pre-assigned dinner seating on a massive, impersonal ship.

Dream Cruises introduces you to the joys of private yacht charter vacations, a fast-growing and often surprisingly affordable alternative to cruise ships. With charters, you get the whole boat for your family and friends, with a crew catering only to you, and you go wherever you choose—from Alaska to the South Pacific.

Based on first-hand experience as well as advice and information from sixty charter-industry experts worldwide, Dream Cruises explains which kinds of yachts are available, where to book them, how to find a trustworthy broker, what you can expect to pay, and much more.

Why book another cabin when you can have the whole boat for yourself?

Author: Kim Kavin
Paperback:  348 pages
Company: iUniverse Star  (2007-10-12)
ISBN: 1583489843
List Price: $18.95
Amazon Price: $13.41

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Though Spain was once something of a bargain hunters’ paradise, today’s Spanish homes are being snatched up by the highest bidder. As a result, housing in many parts of Spain has gone from a buyer’s market to a seller’s dream. Yesterday’s investors are fast becoming today’s millionaires.

There is no shortage of real estate investors in the Spanish housing market. The focus has merely changed from grabbing cheap homes to seeking quality investment opportunities.

Today’s investors look for houses that offer more than just a place to hang one’s hat. They consistently sink money into properties that come with the advantage of proximity: access to shopping, schools, recreation, beaches, and other desirable amenities.

Rather than flipping cheap homes in average areas, they focus their efforts on upgrading higher-end homes that have more to offer by way of location.

Much of this focus on quality has come about through Spain’s efforts to cater to the tourism sector. With new hotels and resorts being built at lightning speed, surrounding areas reap the benefits of rising property values. Thanks in part to events like the Mallorca Classic and the America’s Cup, tourism likely will remain a strong factor in the value of real estate.

Another factor that contributes to the housing market increase is the moratorium on building in several areas of the country. The efforts to protect the very natural resources that draw tourists to Spain means the country is more land-locked than ever before. With fewer places to build, existing properties values are rising faster than in previous years.

Investors aren’t the only ones who buy homes in this country. Holiday makers still purchase vacation homes at a steady rate. Wealthy Brits continue to invest in Spain, though their reasons for buying and the qualities they seek have changed. Villa holiday homes on the coast and the islands like Menorca remain a popular commodity with those who look for long-term gain over short-term investment. Most of these villa holiday homes are purchased by UK investors. In fact, business is so steady that many agents cater specifically to buyers from the UK looking at villa holiday homes, with Menorca holiday villas expected to sell well in 2008.

This doesn’t mean there aren’t any more economical properties left. For those who are able to venture inland and away from the cities and major resort areas, the odd bargain may still be found. Prospects for native Spaniards who want to upgrade, however, are few and far between. Those who wish to sell their homes and invest their gains into purchasing a larger residence have to leave urban areas for smaller, less populated towns.

Real estate experts predict that the housing market in Spain will get tighter. Buyers seeking vacation homes will continue to make up a large percentage of investors, especially in cities and resort areas.

These investors typically hold onto their properties for many years. So, while there is some opportunity to make money, investors (vacation home buyers or otherwise) should not bank on making a fast flip. They can, however, likely count on seeing lasting value with their purchases, particularly properties with quality perks.

About Author

More information about the Spanish island of Menorca, often known as Minorca are via YourMenorca.net

Today’s Menorca weather, Mahon airport and Minorca flights for villa holidays can also be accessed along with holiday companies who offer Menorca holidays and hotel vacations.

Source: ArticleTrader.com

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