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Are children preventing consumers to consolidate debt?
More and more people are facing bad credit debts as the recession starts squeezing again. It is said that the inflation is going to make 2011 the hardest year ever.
By: Laura F Wolf Solvemybadcredit
Based on a national survey among the biggest mortgage lenders people with children will have less chance to get accepted for promotional interest rate mortgages and to consolidate debt at a lower rate. It is based on the assessment credit companies and mortgage lenders use to determine a household's monthly outgoings. Are children expensive then?
Mortgage rates and acceptance to consolidate debt should not depend on the number of children. Obviously there is no rule or exact amount how much more families with children are spending, and many young families are actually better at saving than single people. Therefore people with children wanting to consolidate debt are unfairly treated and it is a case of banks' discrimination.
Banks can only guess how much families with children are spending, and this figure might be wrong just as it can be right. And if a single person has an expensive hobby they spend about £500 a month, should they have more chance to consolidate debt?
The other reason why banks are wrong there is that people with children have more sense of responsibility than single men or women. So that way they should be less risky for banks.
Unfortunately it is getting harder and harder every month to consolidate debt as lenders are changing acceptance criteria and once the base rate has been increased the cost of credit is going to go up again, even if someone chose to consolidate debt by remortgaging.
Low mortgage rate offers are ending and the housing market does not look healthy in 2011. So consumers are advised to go ahead and consolidate debt now, before the changes take effect.
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