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Millions of UK consumers have been warned to take heed of the still very real financial threat posed by the credit crunch anomaly.

Drawing its facts from a recently issued report drafted by the Bank of England, one of the UK’s leading financial intermediaries has warned that any consumer with credit commitments running in excess of 45% of their net income, needs to be aware that their financial health could be at risk. It has also been suggested that any borrower with a home loan commitment running equal or greater to two thirds of their total advancement may also be in jeopardy.

One expert commented that we are currently living in an age of uncertainty with regards to the credit markets and it would be wise for consumers to curtail the rate in which loans, credit cards and other financial products are acquired. Furthermore, it may also be a worthwhile exercise for consumers to conduct their own financial health check as a means to ascertain if they could be at risk from a potential shift in the markets.

Rising property prices are fast becoming the hot topic of the moment for many would be first time buyers. However, recent studies reveal that at the market’s current momentum, many FTB’s will be unable to maintain repayment commitments on any type of future home loan plan.

The news comes in light of a survey into future issues of affordability conducted by one of the UK’s foremost housing associations. The institution has suggested that unless both public and private sector bodies undergo a mass new home building scheme over the next few years, at their current value, many FTB’s will be forced to commit to dangerously high value mortgage products which could jeopardise their financial stability.

Commenting on the findings, one expert suggested that a clear and real need for affordable housing has become blatantly apparent and it is within our Governments interest to ensure that consumer needs are met. There are already many thousands of homeowners within the UK who are struggling to cope with their loan commitments due to changes in economical conditions and further uncertainty with regards to rate rises has many mortgage payers on tenterhooks

Consecutive rises in the rate of national interest have caused a significant number of home loan providers to increase the rates of interest tagged to a number of their products.

A survey conducted by a leading financial intermediary has discovered that post Q2 2007 has seen a number of home loan providers increase the cost of their plans by an average of 1%. However, it has been further discovered that of those providers whose rates have increased, the vast majority are only applicable to non-online accessible plans. As a comparative, plans made available through online mediums only appear to have increased by ¼ of a percent on average.

One expert commented that the difference in price between loan plans that are currently only offered online is quite astounding. It would appear that some providers are almost penalising individuals who prefer to use the more traditional methods to source finance, offering marked hikes in price over their online counterparts. He further suggested that in order for shoppers to find the best deals, it is absolutely imperative to learn how to use the Internet effectively.

For UK lenders, the Internet has offered an ideal medium for their products to be both sourced and applied for, whilst keeping costs down in the process. For the consumer, the Internet provides a perfect solution to thoroughly search what has become a rapidly expanding market place.

A recent report compiled by a UK based credit reference agency has revealed that almost 1 in every 3 borrowers is unaware of the exact figure owed to the sum of their creditors.

As alarming as the above piece of information may sound, what may come as even more of a shock is the fact that approximately 1 out of every 8 borrowers has absolutely no clue as to the level of their personal debt predicament. Analysts suggest that as many as 9 million UK residents are currently suffering with some form of personal debt, which is further supported by the increasingly high number of arrears and CCJ notices issued to indebted Brits on a daily basis.

Consumer welfare groups have advised borrowers to think long and hard before acquiring any form of credit, and to also establish whether their desire for credit is more a case of “need” rather than “must”. There is an extremely high propensity of British borrowers who are far to hasty in their decision to turn to credit, with the vast majority of those applying for a debt consolidation loans in particular, able to tame their situation through simple acts of financial discipline.

With regards to those borrowers whose debt predicament can be classed as being “out of control”, recent stats reveal that the number of new IVA and Bankruptcy cases is expected to top the 40,000 mark by the latter part of 2007.

Using credit cards to pay off part or even all of your outstanding home loan balance could make perfect financial sense according to one expert.

A spokesperson for one of the UK’s leading debt advice charities has suggested that using cards to pay off a sizeable chunk of persons home loan can save thousands if circumstances permit.

For example, If an individual were committed to a particular loan plan whose interest was “X” and was then able obtain a credit card with an interest rate that was less than “X”, using the balance of the card to reduce the balance of the mortgage could actually be quite a savvy move.

He further commented that a surprisingly large chunk of homebuyers have used their cards in this way and stated that certain card providers do offer products whose gross interest rate is considerably less than that of a number of popular loan plans.

In addition, a recent study compiled by a reputable public sector analytics firm revealed that vast numbers of British homeowners were using their credit cards to pay off their mortgage. However, it has also been revealed that a great number of the aforementioned are merely covering their monthly repayments, opposed to vastly reducing their balance and are effectively robbing Peter to pay Paul.