Bad Credit Guarantee Loan Mortgage

Borrowers warned not to rush in wake of interest rate hike

Leading mortgage lenders have warned against the temptation of fixed rate deals, in the wake of the Bank of England's interest rate rises.

Those seeking bad credit mortgages or lifetime mortgages might opt for a deal where interest rates were guaranteed to remain the same over time. This is as opposed to a tracker mortgage, which would correspond to changes in base rate as governed by the Bank of England.

Interest rates went up to 4.75 per cent last Thursday, but Ray Boulger, spokesman for independent mortgage provider Charcoal, told Reuters that this it was not necessarily a good idea to go for a fixed rate loan: "If base rates are going to go above five percent and stick there for a while, then it makes sense to take a fixed mortgage.

"But if it is not going to go over five percent, and I don't think it will, then a tracker mortgage makes far more sense," he continued.

Five Lousy Financial Deals

It's probably true that many of us are much more financially savvy these days, thanks in part to the wide availablity of information on the Internet. But there are still some financial products that we seem to get conned into buying time and time again.

Here are five financial deals that Fools should avoid using like the plague:

1. Extended Warranties

Extended warranties got a bad name for being over-priced and oversold, often by pushy sales staff. Indeed, an investigation by the Compeitition Commission branded them 'unfair and uncompetitive' with some warranties costing nearly as much as half the value of the goods being covered!

Last year the government introduced legislation forcing retailers to display the cost of an extended warranty next to the price of the item to enable consumers to see at a glance just what they're paying for.

Ten Steps To Defeat Your Debts

There's been a lot of doom and gloom about the UK's growing debt problem in the financial pages in the last week or so. First, the UK's five biggest banks announced their half-yearly results. Although their combined profits climbed 21% to reach £19.3 billion, bad debts soared by 29% to reach £5.8 billion. That's a lot of poor lending decisions!

Second, figures from the Department of Trade & Industry showed that over 26,000 people became insolvent or bankrupt in the second quarter of this year, up two-thirds (66%) on the same period in 2005 (learn more in Britain's Going Bust!). Third, mortgage repossessions hit 8,140 in the first half of 2006, which is the highest figure for five years, although moderate by historical standards.

For the record, this government has presided over the biggest increase in personal debt in UK history, with the total rising from under £500 billion in April 1997 to £1,228 billion in June 2006.

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