Top Ten Tips on How to beat the Credit Crunch

Move Fast if your Thinking of Remortgaging

Mortgage lenders are pulling mortgage products fast and tightening up on criteria and the good deals are disappearing fast. At present no one can forecast when the credit crunch is going to be over and things start to go back to normal. Our advice would be that if you are thinking about a remortgage get the balling rolling before its to late. Even if you have a redemption penalty that is a few months away from expiring. Still apply for a mortgage now because most mortgage offers are valid for upto six months.

Take a Mortgage Holiday if you can.

Rather than fall into arrears call your lender and ask if you can take a mortgage payment break or even consider changing your mortgage to an interest only for a while as this may reduce your payments. But remember that if you switch to an interest only mortgage for a while this is not reducing your mortgage debt.

Don't make overpayments

Some mortgages have the ability to overpay each month to reduce your mortgage debt, if you are unsure what the future holds, Then stick the money into an ISA or another form of savings account and save it there for a rainy day or if things get tight. Remember you can always pay it off your mortgage at a later date.

Get some Unemployment Cover

With the uncertain economic climate and with lending at low, businesses may start to struggle and we all live in fear of losing our jobs. It may be wise to take out some insurance that covers you in the event of you being made redundant.

Manage your Finances and don't overspend

Start using your money wisely for a while as the credit crunch continues, don't make any unnecessary purchases for a while put the money away and treat yourself when the credit crunch comes to an end. Reduce your expensive debt like credit cards if you can.

Build an Emergency Fund

If you can build a emergency fund, Us financial advisors recommend that you have at least 3 months money put aside for an emergency. But clear off expensive debts first like Credit Cards as this can be costly every month and hardly reduce if you only pay the minimum.

Seek Help

In recent months, Citizens Advice has seen a massive surge in the number of people desperate for help with mortgages and other debt - 215,000 new cases this year alone.

As well as providing free guidance, Citizens Advice can help you work out your repayments and negotiate with creditors to prevent borrowing spiraling further.

This is usually done by arranging for interest charges to be frozen on the basis that you continue paying what you can afford. It can also draw up plans to help you stay out of debt in the future

Review your Insurances

If you have life insurance, car insurance ect, it may be possible to save money on those policies. The main ones that you can save on are Life Insurance as these rates have come down allot over the past few years and if you have had your policy more than 2 years there is a good chance of saving on such policies.

Rent a Room

It may be possible that you could rent out a room in your property and make extra money

Switch Those Expensive Credit Cards

If you have credit cards and are only paying the minimum for each month it is worth switching to a 0% on balance transfers credit card company like MBNA who are offering 0% on balance transfers until 06/09.