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This is when the terms of the original mortgage are renegotiated,
and usually means that the borrower increases the amount that
they are borrowing, which is often possible due to a rise
in the value of the property.
A re-mortgage may allow the homeowner to repay other debts
such as personal loans or credit cards, or it may be a way
of paying for home improvements such as a conservatory or
a loft conversion.
Re-mortgaging may involve getting a better deal from your
current lender, or it may mean changing lenders if a rival
is offering a more competitive rate.
The re-mortgage usually will involve a fresh survey of the
property taking place, and an updated valuation of the property,
which will take into account any changes in value due to home
improvements, or due to fluctuations in the local or national
property market.
Example of a Re-mortgage:
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Three years ago, you bought a house
for £100,000, with a £10,000 deposit (10%). |
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You took out an interest-only mortgage of £90,000
to cover the balance. |
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Since moving in, you have redecorated the ground
floor, converted the loft, and added double glazing
to the House. |
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You live in a desirable area, and the house has
now been he re-valued at £150,000. |
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Although you have been able to pay cash for many
of the home improvements, you have recently run up £10,000
of credit card debts, and also have a car finance loan
commitment for £10,000. |
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As your mortgage is interest only, you would still
owe £90,000 to your lender. |
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Your equity in the house is £150,000 minus the £90,000
you owe to your lender, leaving you with £60,000. |
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If you take out a new mortgage for £120,000; £90,000
of this will be used to repay the previous loan, leaving
you with £30,000. |
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This can pay back your £20,000 debts, and leave
you with £10,000 to spend on more home improvements,
or in any other way you choose. |
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You started by owing 90% of the value of your property,
and you now only owe 80%. |
A secured loan is a loan where you will be required
to use your property as security against the loan, so the
lender is able to balance the risk of lending to you.
The amount that can be borrowed differs from lender to lender
and your individual circumstances.
The amount that can be borrowed, the term available and the
Annual Percentage Rate (APR) will depend on:
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The Value of Your Property |
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Your Ability to Repay the Loan |
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Your Personal Circumstances
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You need to think very carefully about how you manage a secured
loan.
If you default on the loan you risk losing your home.
Secured loans allow you to borrow more and repay over a longer
period than a personal loan – up to 25 years. They can normally
be used for almost any purpose and as the lender has the benefit
of security they can be offered to people who may be excluded
from other loans.
Borrowers, who are self-employed, have recently changed jobs
or have previous credit problems will be considered for a
secured loan.
They are also useful for borrowing larger sums or where the
applicant requires a longer repayment period.
Actually, a personal loan and an unsecured loan are the same
thing, but providers use different names to describe the same
product.
A personal loan is sometimes described as an unsecured loan
because it allows you to borrow money without having to provide
security against it, such as your home or car.Instead, an
unsecured (or personal) loans provider will base their decision
on granting you a personal loan by using your personal credit
history.
This is verified by a credit check to determine your credit
rating.
An IVA is a legal contract between you and your creditors,
it is a legally binding arrangement supervised by a Licensed
Insolvency Practitioner, the purpose of which is to enable
you to reach a compromise with your creditors and avoid the
consequences of bankruptcy.
The IVA enables you to cut your debts to an affordable level
and clear them over a fixed period.
The compromise should offer a larger repayment towards your
debt than could otherwise be expected were you to be made
bankrupt.
You can even take out a fresh mortgage while in an IVA. What’s
more, it is a totally private arrangement – nobody needs to
know about it apart from you, your advisors and your creditors.
An IVA ensures that your home is protected and your job
is not at risk.
You make one single manageable monthly payment, based on
your budget, for 3-5 years.
After that the remaining debt is wiped clean, leaving you
completely debt-free.
This means that an IVA can write off up to 75% of your debts.However,
under the terms of the agreement you undertake to contribute
as much as possible within your budget.
So in reality, an IVA presents an opportunity for you to
pay whatever as you can in a manageable way – a way you can
afford.
Advantages of an IVA
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An IVA can be for an Individual, Sole
Trader or Partner |
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An IVA enables a Sole Trader or Partner to continue
to trade and generate income towards repayment to creditors
which would otherwise have a call upon the personal
assets of the individual. |
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No restrictions as regards personal credit although
in practice can prove difficult to obtain. (See our
credit repair guide for more information about credit
files and how they work). |
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The proposals are drawn up by you and are entirely
flexible to accommodate personal circumstances. |
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You do not suffer the restrictions imposed by bankruptcy,
such as not being able to act as a director of a limited
company, not being allowed to work for the armed forces
and other professions. |
Creditors
-IVA’s provide a better return to creditors than bankruptcy;
the costs of administering an IVA are considerably lower than
in bankruptcy, enabling a higher return to creditors.
IVA’s operate as an insolvency procedure and creditors can
as a consequence of this, still reclaim tax and VAT relief
as a bad debt.
Disadvantages of an IVA
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Where contributions from income are
being made, IVA’s are generally expected to be for a
period longer than that in bankruptcy, i.e. 5 years
as opposed to 3 years. |
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The 5-year period is often required by creditors
as a bargain for allowing the Debtor to avoid the consequences
of bankruptcy. |
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If you fail to comply with the terms of the arrangement,
your home and other assets are at risk if you have not
been specifically excluded from the proposals. |
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If the IVA fails as a consequence of you not meeting
your obligations under it, you will likely be made bankrupt.
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For someone to enter into an IVA they must have
at least £15,000 of unsecured debt and owe to three
or more creditors. |
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Unsecured debt includes credit cards, store cards,
personal loans, overdrafts, catalogues etc. |
Get out of debt with debt management
We know that debt is overwhelming.
We understand that a change in circumstances such as a
reduction in income, or the break-up of a relationship could
land you in serious financial trouble.
That's why we provide solutions designed to meet the personal
needs of each and every individual client.
Our team of highly experienced advisers will help you find
the best financial solution to suit your needs, be it debt
management or an alternative, depending on your circumstances.
Fill in the form and get free help NOW!
We'll negotiate with your creditors to agree reduced payments
based on what you can afford to pay and ask that they freeze
or reduce interest and charges on your accounts.
Over 35,000 people already have a monthly payment solution
from us thanks to one of our debt management programmes.
Get out of debt with debt management
The original Right to Buy scheme was first introduced in
1980 giving many tenants living in local authority properties
the right to buy them at a discounted price.
You have the right to buy if you have been a public sector
tenant for at least two years (if your tenancy began on
or after January 18 2005 the required length of tenancy
is five years).
What Kind of Discount Do You Qualify For?
The maximum level of discount you are entitled to depends
on the local area you live in and ranges from £16,000 to
£38,000 off the market value of the property you live in.
The discount to which you are personally entitled is roughly
proportional to the number of years you have been paying
rent in public sector housing.
This means that the longer you have been renting from the
council, the higher your discount entitlement will be.
How Can we Help?
We have put together a panel of lenders that are willing
to offer finance to people with the Right to Buy their council
home.
Often no deposit is required because of the discount given
by the local authority you may be able to borrow MORE than
the Right to Buy purchase price of the property for home
improvements, debt consolidation, and more.
We can help if you already have your Right to Buy papers
from the council or if you don’t know how to get them and
need help.
Do I Qualify?
We can help people with a wide range of personal circumstances
but our main focus is on helping people with credit problems
and trouble proving their income.
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