Wednesday, February 18, 2009
Category:
Personal Finance Tips
According to Moneyextra.com, homeowners could save in excess of £330 million a month by downsizing their home.
In fact, research conducted by the financial advice website clearly depicts that 595,000 people are looking to do just that within the next six months.
In addition, over one million Brits that currently do not own a property are now intending to take advantage of falling house prices by making a purchase. The average house price for a first time buyer sits at £130,000, which means monthly repayments can be as low as £592.92. For many people that are renting, this figure may be an affordable alternative.
For those that are downsizing, Moneyextra.com discovered that extending their mortgage term and downsizing from a £200,000 mortgage on a £250,000 property to a £144,000 mortgage on a £180,000 property could reduce their monthly repayments by £555.33 per month whilst also freeing up extra capital.
Richard Mason, MD at Moneyextra.com commented: "Our research shows that while 4% of homeowners are considering a move to a smaller property, a staggering 8% of homeowners are ignorant to the current economic conditions and still don't know what to do. The UK needs a wake-up call. Homeowners who are struggling with mortgage payments need to take their heads out of the sand or potentially face repossession.
"We're urging people not to close their eyes to the opportunities and risks out there. There are still plenty of deals to choose from and significant savings can be made from downsizing. Our analysis shows that people who are struggling with their outgoings need to act fast - if they do so then collectively they could save nearly a third of a billion pounds every month - more than £550 each. Those looking to downsize now are making the right decision - move before you get into any serious difficulty to avoid the danger of repossession."
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First time buyers, and indeed those that are downsizing, could consider a secured loan if they are looking for the funds required to put their personal stamp on their new home. A
secured loan could be used to create the ideal living space, and can usually be repaid over a term to suit the borrower from 5 to 25 years. This finance option could fund projects such as fitting a new kitchen, bathroom or even a conservatory.
