Watch Out for Unexpected Bills

By: James Quinton

In the last year Brits have been landed with almost ?49 billion of bills they weren't expecting, costs that could be covered with secured loans.

Four in five of us were hit by a bill we didn't see coming, according to Abbey, with half of us covering the cost of this through an expensive overdraft or credit card, both of which often charge much more interest than homeowner loans.

The average cost of these unwelcome surprises - which included home repairs, taxes, travel costs and forgetting birthdays - ranged from ?63 for a parking ticket right up to ?1,206 for home repairs.

"You never know what life is going to throw at you. However, you can prepare for the unexpected through building up a buffer savings fund to help deal with these shock events," said Reza Attar-Zadeh from Abbey.

However, those without any savings who are forced to borrow the money for repairs or medical bills can cut their costs by taking a secured home loan.

Consumers feeling the pinch as interest rates continue to rise could use a homeowner loan to consolidate their most expensive debts, such as credit cards.

New figures from the Council of Mortgage Lenders (CML) show that the interest costs being faced by first-time buyers are at their highest for 15 years, making meeting other monthly payments difficult for many.

Secured loans are one way that borrowers can put themselves back in control, cutting their monthly outgoings by moving debts such as overdrafts, unsecured loans and credit cards onto a lower interest rate.

Taking sensible debt consolidation steps can then leave you the extra cash to comfortably meet your mortgage costs each month, as well as giving you a crucial buffer in case of any unforeseen bills.

"Month on month we see affordability constraints for first-time buyers worsening. And with the impact of May's interest rate rise still to be felt, many borrowers face higher costs in the coming months," said CML director general Michael Coogan.

"The vast majority of borrowers will be able to absorb higher mortgage payments. But with two million fixed-rate loans coming to an end over the next year and a half, many borrowers should anticipate that their mortgage costs are likely to rise and should be planning ahead," he added.

Money Management
 • 
 • 
 • 
 • 
 • 
 • 
 • 
 • 
 • 
 • 
 • 
 • 
 • 
 • 
 • 
 • 
 • 
 • 
 • 
 • 

» More on Money Management
 



Share this article :
Click to see more related articles