The dangers of overstretching your financial resources

In the boom times it seemed that credit card applications were falling through our doors on a daily basis, loans were freely available on the high street and competition in the mortgage market was intense. Indeed many people were actually applying for and receiving mortgage arrangements of over 100% of the value of the property they were acquiring and using this to refurbish their new homes.

In this particular climate it was very easy for UK consumers and UK businesses to get "carried away" with many people assuming the boom times would last "forever". However, the dangers of overstretching available financial resources have certainly come back to haunt many in the UK who are struggling to pay credit card bills and loan repayments never mind covering their normal monthly bills. The financial situation in the UK, and around the world, can and does change on a regular basis and when looking to acquire property you need to give yourself a buffer between what you can afford and what you can comfortably afford.

Using every penny of your financial resources to acquire your dream property may seem sensible at the time but as interest rates move higher the pressure will grow and something will have to give!