CML: Homeowner loan can be way of dealing with debt

Taking out a homeowner loan can be a sensible and effective way to deal with debt problems, an industry body has claimed.

Consumers have increasingly been undertaking such activity in recent months, according to the Council of Mortgage Lenders.

A significant number of homeowners are also said to be remortgaging to gain the security of a fixed-rate product in times of uncertain interest rates, spokeswoman Sue Anderson said.

And some are using a homeowner loan as a means of paying off a more expensive form of borrowing – such as credit cards – with a lower-interest loan.

“Repaying more expensive credit agreements with less expensive interest rates that are available on mortgages may well be a reasonable and very rational strategy for people,” Ms Anderson explained.

Meanwhile, Parents are underestimating the costs involved in supporting their offspring through their university years, a study has found.

As a result, not enough have built up the level of savings required to see them comfortably through those years, independent financial advisers Best Advice Financial Planning have found.

© Adfero Ltd

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