29-10-2007
Danger thresholds highlighted for borrowers
News by Adfero for Simply Business - independent providers of business insurance, business finance, landlord insurance, buy-to-let mortgages & commercial mortgages.
A number of financial danger levels have been highlighted following the recent release of the Bank of England's Financial Stability Report.
According to comments made by fool.co.uk, there exist a number of different types of borrower who may be at risk, should the effects of the recent credit crunch resurface and conditions once again contract.
Indeed, although first-time buyers, certain buy-to-let investors and those with weaker credit histories are most commonly thought to be at risk, the scope of potentially vulnerable people is actually wider.
"Consumers should draw up a statement of affairs immediately to get a useful snapshot of their finances," said David Kuo, head of personal finances at fool.co.uk.
The statement of affairs takes into consideration a number of criteria, including monthly income and overall debt levels.
"Failing to draw up a statement of affairs in the current difficult financial climate is tantamount to driving a car without shock absorbers," he added.
Those also thought to be at risk include those whose debt-servicing levels exceed 55 per cent of their total household income - people with a total net worth of less than 33 per cent of their total income are also thought to be in danger.