A recent survey has confirmed that homeowners with debt problems are increasingly trying to borrow themselves out of trouble.

During the last year, consumers have increased their unsecured debt to an average of 194% of their net take home pay. This is despite falling house prices and increasing negative equity. Last year, it was “only” 170%.

In contrast, those debtors who do not own their own homes have been far more prudent. Their level of debt hardly changed over the last year.

This demonstrates that homeowners still feel that owning property allows them to fund a higher lifestyle through debt and it will take time for it to sink in that this is no longer true.

Traditionally recent university graduates were offered special mortgage terms – but how times have changed.

Until recently if a graduate remained loyal to his or her student bank, they were promised more generous income multiples, lower interest rates and even help with paying their stamp duty. Today, virtually every special deal has gone.

A few lenders will allow degree holders to have a mortgage with a lesser deposit, say 15% rather than 25%, and sometimes offer them a fraction off the interest rate but it’s nothing to be overjoyed about. In the absence of the old special deals, experts are advising graduates to shop around along with all the other prospective homeowners.

Some experts are advising these first time buyers to take a fixed rate mortgage as the cost of home ownership takes many first timers by surprise and it make the adjustment a little easier if they have at least one household expense set in stone. But graduates how are sure that their incomes will rise steadily and make their mortgages increasingly affordable, may prefer a tracker. Currently, the rate on a tracker is lower than most fixes.

Meanwhile, recent graduates are being warned about fraud. Young professionals in rented accommodation are the main targets for fraudster’s intent on stealing identities. They are being advise to regularly check their credit file to ensure it is clean.

Property Surveyors are running scared. Having seen hose prices dive by up to a third, they are covering themselves by taking a conservative value and then knocking off some more.

This can be devastating for some applicants. The ultra low valuation cuts the value of equity they will own in their house and this can result in the mortgage company pushing up the interest rate they are charged and this can cost them hundreds of pounds every month. And in some cases it can even result inn their application being refused.

So if your Surveyor knocks down the value of your house, contest it. Remember, you must accept that prices have fallen but if the value still comes in well below what you think it’s worth, complain. To get anywhere with this, you’ll have to base your estimate on facts not just your annoyance – and remember, if another surveyor has to come out, that’ll be another set of survey fees! But if the low valuation has pushed you into a higher interest band with your lender, it might be worth it.

One of the results of the credit crunch has been the big difference between the interest rate charged to those with just 10% equity as against those with much more. If you have 40% equity you could currently get a 2 year fixed mortgage for just 3.34%; with 25% equity the rate rises to 3.99%; and it’s 5.99% for those with less equity. This 5.99% rate pushes up the monthly payment for a typical £150,000 mortgage by £205 per month.

But as we’ve said, if you do appeal against the valuation you’ve been given, do support your claim by reference to the size and character of your house in comparison to other houses which have been sold recently in your area.

Historically, insurers have used age, health and occupation as the main factors which influence he cost of your life insurance. But now your post code is going to be taken into account as well.

Aviva, previously Norwich Union, has added your post code as a factor after using average life expectancy per post code to help price their pension annuities. Success with annuities has convinced them that it was time to add average life expectancy per post code to their life insurance underwriting. They believe that post code assessments will affect the premiums for about 30% of applicants, changing their premium by around 10% up or down.

But some social commentators are worried. They believe that it could create a post code lottery whereby people living in deprived areas will automatically have to pay more than those living in more affluent areas.

But we can see why Aviva are now taking account of post codes. A report by the World Health Organisation looking at Glasgow, found huge variations in life expectancy across small areas of the city. They give an example that a boy born this year in the Calton area of Glasgow could expect to live to 54 whereas if he lived in Lenzie a few miles away, his life expectancy would be 82. With such stark statistics as these it’s no wonder the life insurance industry is taking note.

Home Information Packs, HIPS for short, which have to be prepared before you can put your house on the market, are making estate agents loads of money by taking advantage of their position. Great for them but bad if you’re a seller!

A survey found that some estate agents are charging double the price that a specialist HIPS provider would charge. The result is that many sellers could save upwards of £130 by shopping around.

Apparently the Halifax estate agency was the dearest taking a typical three bedroomed freehold semi. For that they charged £413 – but a HIPS specialist such as Fridays Property Lawyers would have charged just £189, giving a saving of £224!

And when it comes to leasehold properties the cost are even higher due to the additional legal work involved.

The Government imposed HIPS on to home sellers back in 2007 despite constant opposition from solicitors, mortgage providers and estate agents. The Government claimed that the selling process would be faster and more efficient with the HIPS containing information for the potential buyers on planning searches and the energy performance of the property.

So our advice is, get a quote for a HIPS off your estate agent and then go online and see how much you can save.

Experts are warning that a second wave of house repossessions could hit the country. Whilst repossessions were down 10% on the previous quarter, the outlook continues to look bleak.

Industry figures have revealed that the number of households in serious arrears has rocketed by almost 50% during the last 12 months. Against this background, the Government has been applying pressure on lenders to go softly on those behind with their payments. This to some extent has suited the lenders as house prices have dropped up to 335 in some areas and they want prices to recover somewhat before they take action.

This situation has led Shelter, the housing charity, to warn that as interest rates, house prices and unemployment rise, we could see the second wave of repossessions.

Currently 2.5% of households are significantly behind with their repayments – some 205,600 homeowners. It is this group which is most at risk as they could be taken to court at any time. But the Council of Mortgage Lenders insists that it’s members are doing everything they can to help those in arrears.

Upto now pet owners have had two ways of controlling their veterinary costs. Take out pet insurance or buy the drugs their pet needs on the internet. But vets have become wise.

Many vets are now charging as much as £25 for a prescription if their pharmacy is not dispensing, thus largely wiping out the cost benefit of shopping online. A typical vets practice generates around a third of it’s profit from “non-clinical” sales. Those are services such as dispensing drugs and selling specialist foods”. Until the end of October last year vets were barred from charging for prescriptions after an inquiry by the Competition Commission had found that charging for prescriptions were not in the public interest by allowing vets to maintain a near monopoly over the supply of drugs.

But since the ban was lifted, most vets have reintroduced fees. Those uninsured owners whose pets have long term illnesses have been hardest hit. Take dogs with arthritis for example. One pet owner we’ve heard of, had a sheep dog with an enlarged heart twinned with arthritis. Before they started sourcing their drugs online, their vet charged then £160 a month for the drugs their dog required. They then started buying them online and the cost fell to £75. Since last year when their vet started charging for un-dispensed prescriptions, this owner negotiated a reduced three monthly prescription fee costing £10 - so the online cost remain worthwhile.

The Royal College of Veterinary Surgeons says that it’s reasonable for vets to make a charge but charges must be “reasonable”. The problem is that they stop short at saying what “reasonable” amounts to! What a cop out!

Having said that the average fee seems to be around £10 to £15. We appreciate that making out a prescription takes time and that has to be paid for but unless there is something very complicated, £10 for a prescription which takes less than 5 minutes to write seems tops to us.

So if you are facing high vets’ bills you should shop around for a cheaper vet. There are plenty around. And if you have any difficulty visit findavet.org.uk, the web site run by the Royal College of veterinary Surgeons.

And if you pet is generally fit now but you are worried about controlling future costs, get pet insurance. Remember, no insurance will insure your pet for an existing or re-occurring illness.

The bloodbath in the loans market has meant that many of the small and medium sized loans companies that once sold loans have gone bust or dissolved, particularly those that sold to people with impaired credit.

The result is that many clients who make a claim because they believe they were mis-sold payment protection insurance cannot reclaim against the business that sold the loan to them, because it no longer exists. Instead they are appealing for refunds from the Financial Services Compensation Scheme.

Take Picture – they were a specialist lender whose PPI premiums for a five year loan often amounted to 50% of the initial loan value. The problem is that Picture went into liquidation last year so any customer that makes a claim is re-directed to the Financial Services Compensation Scheme. And under that process, compensation can easily take 12 months to come through.

There are suspicions that some of the lenders have dissolved themselves to avoid the mis-selling liabilities that stood on their books. In our view, if that can be proved, then lawyers should find ways to hold the Directors personally responsible for the company’s mis-deeds.

If you go into an Individual Voluntary Arrangement, the Insolvency Practitioner running your IVA scheme takes his fees from the first set of payments you make. But if you are one of the one in five who fails to keep their payments up, you will find yourself with a bill from your Insolvency Practitioner for the balance of the fees you owe.

IVA’s run for five years during which time, the person in the IVA pays off the reduced debts which were negotiated for them by the Insolvency Practitioner and within this sum the Practitioner includes his fees. This frequently means that the creditors have to write off 60% of the money owed to them.

But if the IVA collapses because the creditor fails to maintain the agreed payments, what happens next? Well, in practice, the only solution is a full bankruptcy. If that happens, the bill from the Insolvency Practitioner gets added to all the other unsecured creditors – in other words, he’s likely to get very little - or nothing!

The start of a new fast track bankruptcy regime has been hampered by regulations that were added at the last moment.

The problem is that just before launch, the Insolvency Service announced that people with pension savings would not qualify for a Debt Relief Order. This has meant that in the first three months the number of DRO’s has barely reached 2,000 against the forecasts of between 3,500 and 5,000.

A spokesman for the Citizens Advice Service confirmed that the pensions issue does exclude many people who otherwise would qualify for a DRO rather than a full bankruptcy.

At the moment a person living in England or Wales has to have less than £300 in assets, excluding their car which must be worth less than £1,000. Because pension funds are not readily realisable it was assumed that they could be disregarded but shortly before the DRO’s came into existence, it was announced that they too were to be included.

To qualify for a DRO you have to have not more than £15,000 in debts and your disposable income after tax and household bills must not exceed £50 a month. The DRO is then organised by an official provider and has to receive authorisation from the Official Receiver. The DRO then normally lasts twelve months.

The Financial Services Authority has announced that it would take enforcement action against building societies, large banks and broker dealers who fail to follow its new remuneration code which is due to come into effect in January 2010.

Following its concerns that the current bonus regime contributed to excessive risk taking in the banking sector, the FSA wants pay and bonuses to be more closely linked to the profitability of financial institutions. The new code makes clear that financial institutions should not enter into contracts with employees which provide guaranteed bonuses for more than a year. The FSA also wants two-thirds of bonus value paid to senior employees, to be spread over three years.

The businesses will have to send a statement of their remuneration policy to the FSA by the end of October. This will have to be approved by the businesses’ remuneration committees and will provide the basis on which the FSA can check compliance with the code.

The FSA has said that non-compliant business will face enforcement action or be forced to hold additional capital resources if they follow risky business policies.

This new code should achieve two objectives. Firstly, Directors must ensure that the total value of bonuses distributed to employees is consistent with good risk management and sustainability. Secondly, individual compensation schemes must provide the appropriate incentives.

To action their new policies, the FSA has added eight principles to their rule book. These are designed to ensure that all financial institutions fully understand how the FSA will assess their compliance.

These eight new principles are consistent with the recommendations of the Financial Stability Board and with the measures being considered by other countries in the EU and Switzerland.

Have you had a letter from your credit card company recently changing their terms and conditions? Then watch out!

A number of credit cards have made changes to their small print to squeeze a few more pounds out of you. Take Amex for example. Their Platinum cash back card has announced three changes, the most significant of which is that the date on which they have to pay their card by direct debit has been brought forward by four days. They now have to pay about 14 days after their statement. Barclaycard did a similar thing last year and hundreds of cardholders were caught out by not having sufficient money in their bank account when the direct debit arrived early.

Another of the Amex’s changes is that if the card is not used for twelve months, the card will be charged £20. And previously, customers could claim their cash back when they had accrued £12 – now it’s gone up to £25.

Cash back deals have also been changed by Barclaycard. Other cards to make changes recently include Goldfish, Sky, Flybe and Nationwide. If you have any of these cards, we advise you to check out how the changes affect you.

If you spread the payment of your car insurance by paying by direct debit, watch out! Some motorists are being charged as much as 40% interest by their insurers for the facility. The impact will be felt most by those with the highest premiums and the lowest incomes – typically the younger driver.

Research shows that many car insurers are routinely charging an APR of around 25% whilst some go up to 39.4%

Let’s name and shame the worst first – it’s the Green Insurance Company, charging more that 38 times more than the bank of England’s base rate, the massive 39.4%. That’s followed by that champion of cheap groceries, but it would seen not insurance, Asda. They are charging an APR of 28.6%. Virgin and Budget both charge 25.9% followed by Privilege and Churchill at just over 24%.

If you want to have interest free credit then have a look at Saga and Age Concern but the odds are you’ll find that their premiums are uncompetitive.

Insurers do not usually display their APR’s for their credit facilities until you receive their formal quote. And sometimes you have to scrutinise the difference between the annual and the monthly premiums to discover how much in pounds and pence, it’s all going to cost you.

The interest you are charged is as much a reflection of the lenders’ financial circumstances as it is of yours. These are the main factors that affect the interest rates you pay:

The Bank of England’s official Base Rate
These days this affects saving rates more than lending rates. Only Base rate tracker mortgages are directly affected by movements in the Base Rate.

Money market interest rates
There are two interest rates which are very influential to the you are charged. Firstly, there’s what’s called the LIBOR rate. This is the rate banks pay to borrow money from other banks for short periods. Then there’s the SWAP rate. This is the rate banks pay for borrowing money from other banks for longer periods. These interest rates particularly influence the cost of fixed rate mortgages and those tracker mortgages that are linked to LIBOR.

The bank’s money supply
The principle is simple: If the lenders are short of money to lend but the demand is there, they’ll charge more and vice versa. At the moment the mortgage companies are using higher interest rates and higher deposit requirements to effectively control demand. As their coffers are replenished you’ll see lending criteria being relaxed.

Pressures on lenders to increase their cash reserves
Post credit crunch, the Financial Services Authority has forced lenders to hold twice as much in cash reserves. This means they have less to lend. And as we all know, some of the banks owe the Government billions which they’ll have to repay. This all creates pressures on them to increase their profits. How to the respond? Guess what, they charge us more!

Your Deposit
The bigger your deposit the more equity you’ll own in your home – and bankers like you to have plenty of equity - as that means they’re more certain to get back the money they lent you, if things go wrong. This means that they entice borrowers with plenty of equity by offering them the lowest rates.

Your Credit Score
The large credit agencies such as Experian, constantly collect information about your finances. They know who you owe money to and who you have applied to for credit and whether you’ve missed any payments. They also record defaults and County Court Judgements etc. They then use all this money to score you for your credit worthiness.

The lenders of unsecured loans and credit cards also use this information to decide not only whether to lend you money, but what rate to offer you.

According to the Centre for Economic and Business Research unemployment is set to rise from it current level of 2.4 million to 3.8 million, an increase of 58%. That’s far worse than anything the UK has experienced since the Second World War.

Stories like these are leading to a boom in the sales of Unemployment Insurance that pays out tax free cash if you were to be made redundant. Many people are buying the insurance, which can also cover against accidents and sickness, to ensure that they can continue to pay the mortgage or the rent, if the were made redundant. But in actual fact, the cash these policies pay out can be used for any purpose the policyholder wants.

As a guide, premiums are about £3.50 per £100 of monthly income to be paid for a 18 to 30 year old. This rises to about £5 for a 46 to 65 year old.

If you’ve not got Unemployment Insurance don’t leave it too late. If you have any idea that you are about to be made redundant you won’t qualify for a new policy.

A woman received £18,000 for a badly broken leg when her 3 inch stiletto heels became stuck in a crack in a concrete patio.

The lady from Tewkesbury was outside her local pub when her heel became fast in the crack and she fell backwards through a disused toilet door. The result was a broken right fibula and tibia which required three operations and nine months off work. The lady insisted she wasn’t the worse for wear at the time and blamed the accident on inadequate lighting on the smokers’ patio where the accident happened. The public liability insurers for the pub settled the case out of court.

In another stiletto heel compensation case, the heel on a new pair of shoes collapsed on the first night the lady wore them. Her heel hit the floor so hard that the impact broke her ankle in the process. This time the insurers paid out £7,000 after the shoe chain Dolcis admitted that the shoes had been faulty.

We always said stiletto heels were dangerous!

The car insurance companies are at it again warning about impending hikes in our premiums. Well according to figures we’ve seen, premiums have already gone up! Between April and June this year premiums rose by an average of 3.5% to £778.13. And over the last year premiums rose by 11%. On fact premiums are rising faster now than at any time in the previous ten years.

The insurers are blaming several things. Apparently the number of drivers without insurance has risen to 1.6 million and it’s the accidents these drivers cause that’s costing us, the drivers who do have insurance, an average of £30 per policy.

And the cost of an accident is rising. Repair costs are rising, as are fraudulent claims. But the factor having the biggest affect on premiums seems to be those No Win No Fee accident compensation claims. Personal injury compensation and the legal costs that accompany them are siphoning money out of the insurers.

The biggest burden of these increased premiums is inevitably falling on the under 21 year old drivers. That’s not perhaps surprising as they account for ten times more accidents than drivers aged over 35. And only about half of insurers will even quote an under 21 year old!

And there is some streamlining afoot to speed up the systems to catch and fine those who drive without insurance. Powers are expected to come into effect in 2011 will slap £100 fixed penalty fines not just for driving an uninsured car – but for simply keeping an uninsured car! Now whilst it still seems a cheaper option to accept a fine rather than buying insurance, there is another sanction that has some real teeth. If they don’t produce insurance within 14 days, their car will be crushed.

This means that the police don’t need to catch uninsured drivers on the road. A new system will cross match the Motor Insurance Bureau’s data base of uninsured cars with the Driver Vehicle Licensing Agency to find out who owns them. Then, hey bingo, they’ll see a £100 fine in the post and a car crusher on the horizon.

That sounds good to me!

There’s no doubt that texting at the wheel diverts the drivers attention from the road. In fact a research study has shown that drivers are twenty three times more likely to have an accident when they’re texting.

This leads us to wonder how the insurance industry will react to these findings. We think that they will soon bring in new clauses into their policies which allow them to refuse cover if the driver was texting at the time of the accident. Of course, someone has to decide that the driver was texting and we suspect that the insurers will rely on the police to prosecute the driver and then the insurers can take action if the driver is found to be guilty.

Then comes the question of whether the insurers will refuse the claims from third parties against a texting driver. We suspect not but they will down grade fully comprehensive cover to basic third party.

We shall have to wait and see what happens.

Recurring transactions are a way of making regular payments on your credit card and are commonly used to pay subscriptions, utility bills and sometimes credit agreements. The problem is that neither the card holder nor the credit card company can stop the payments. Only the company that set up the transaction can do that – and some seem less than keen to do just that!

Sometimes the company that set up the recurring transaction is difficult to find, sometimes it is simply inefficient at stopping the transactions – but we believe that sometimes it’s an outright scam. They seem to be able to continue taking payments long after the final payment has been made.

These transactions are different to a direct debit. With a direct debit, the banks guarantee that if there is a problem, they will sort it out and absorb the excess payments and costs. Not so with recurring transactions. Here the agreement is directly between the card holder and the supplier of the goods or service. As it is then the supplier who originates the payment, it is only the supplier who can stop it. The banks say, quite rightly, that as the agreement is between the card holder and the supplier they can’t intervene. If they refused the payment they would be effectively cancelling the purchase agreement to which they are not party and they are not entitled to do that.

So what is your remedy if you need to stop a recurring transaction? Well the only thing you can do is write to the supplier asking them to cancel the payments and copy the letter to your credit card. If they continue to take payments, the card company can intervene by instructing the supplier to stop the payments. If it won’t then maybe at some stage the bank might get tough with the supplier, but unless they can see wholesale fraud, they’re unlikely to get tough.

Could you cancel you credit card? Yes but if you set up a new one with the same credit card company, when that happens arrangements on your old card are often automatically transferred to the new card – so the problem stats again all by itself. The only chance you’ve got is to cancel your existing card and get a new card with an entirely new card company.

And what about all the excess payments you’ve made. Well you should eventually get your money back if the over payments were an administrative error. Otherwise, try whistling!