Families Have Less Money Now than in the Beginning of the Recession
Families are becoming more creative in ways to help stretch the family budget and meet the demands of expenses. It means looking for ways to save money or add to cash flow. Remortgages are not only for grabbing a lower interest rate but also at times it is to gain access to cash by releasing built up equity.
An easy way to estimate the amount of equity available in a property is to take the value and subtract the current mortgage debt. This equity can be released from the property into cash and can be used for any want or need. There is a risk involved since the loss of equity amounts to more debt on the home, but with a low interest rate the risk may be minimal for the right homeowner. The cash flow can be important at times and a remortgage is a very good source.
According to the recent monthly Asda Income Tracker families are on the average £728 a year worse off than one year ago. This drop is much worse than that experienced at the beginning of the recession in 2008. It is according to experts likely to get worse before it gets better.
Charles Davis, an economist with the Centre for Economics and Business Research commented, “Rising unemployment has added further pressure to household finances in recent months, compounding the squeeze on spending power caused by high inflation and weak earnings growth.
“Family spending power has fallen sharply compared with a year ago. With the UK economy in a particularly precarious state at the moment, things could get worse before they get better.”