With the current increase in redundancies and the cost of living rising, more and more families in the UK are finding themselves in uncontrollable amounts of debt. While many people suffering with debt may feel that there’s no way out, in many cases small lifestyle changes can help reduce debt and make life a little easier. Here are some ways to get out of debt.
Make a Monthly Budget
Always start by recognizing exactly how much money you have to spend every month. List all your monthly outgoings, and make sure that they are covered by your wage. Try to spend within your budget, and avoid spending on credit.
Pay off High Interest Credit Cards First
If you have a lot of credit card debt, always pay off cards with the highest interest rate first. Even if you canít afford to pay the cards off completely, always pay off more than the minimum amount as this will see your debts reduce much faster.
Try to Reduce Your Spending
Keep track of how much you spend each month and try to identify any areas where spending could be reduced. This could be spending on clothes, drinks, or dining out. Even forgoing a takeaway coffee every day could save you almost £100 a month.
Find Ways to Add to Your Income
If you are in debt, always be on the lookout for ways to make extra money. You could look for a second job, take in a boarder or sell some of your belongings. Make sure that all the extra money you make goes towards paying off your debts.
The different types of mortgages
The UK mortgage market can feel like a maze at times, especially for new buyers. There are a variety of different types of mortgages which can make choosing a mortgage a confusing and frustrating experience. However in Britain there are two different types of mortgages which are the most common and popular, the first is repayment mortgages; this is one of the oldest types of mortgages still available today. With this traditional mortgage homeowners are required to pay off a little of the capital repayments (the mortgage) and a little of the interest payments of the mortgage each month. This is widely considered the easiest type of mortgage to understand and has the least amount of risk, as it is the only mortgage type which ensures that you will own your property once the mortgage has been cleared.
Alternatively, those looking to own their home can choose an interest only mortgage, these types of mortgage only require homeowners to repay the interest developed on the mortgage loan each month and at the end of the term you also repay the original amount you borrowed from the lender. This can be a more risky option because at the end of the term if you cannot repay the original amount you borrowed the lender can repossess your home.
Selecting the type of mortgage which would better suit your financial situation is one of the most important aspects; however, after selecting a mortgage type you then have to consider the various repayment arrangements, for example a fixed, variable rate or a capped rate.
Often taking into account a number of other factors will ensure you choose wisely. For example choosing the right contract mortgage is essential. Contractors have the option to choose a number of different mortgages, often selecting a flexible mortgage will be ideal for your changing monthly circumstances. There is no doubt that choosing your perfect mortgage is a very important decision as your home will be your most prized and expensive possession.