Category: News

While an IVA can provide much-needed debt relief and help avoid bankruptcy, it can have a significant impact on your credit file. It’s important to understand the impact it may have on you.

What is an IVA?

An Individual Voluntary Arrangement (IVA) is a legally binding agreement between an individual and their creditors. It is a formal bankruptcy solution, allowing you to repay debts over a fixed period of time.

When entering into an IVA, it is recorded on your credit file by credit reference agencies. This means that lenders and other financial institutions will be able to see that you’re on an IVA when conducting a credit check. The IVA will be listed on your credit file for a period of six years, even if the IVA itself is completed sooner.

How can it impact me?

The presence of an IVA is likely to make it more difficult to obtain credit during the term of the IVA and for some time afterwards. Lenders may view you as a higher risk borrower due to the history of financial difficulty and, as a result, may be less willing to extend credit or offer favourable terms.

It’s important to note that an IVA is considered a serious form of insolvency and is therefore a red flag to lenders. The exact impact on the credit score will vary depending on individual circumstances and the credit scoring model used by each credit reference agency.

However, the impact of an IVA on your credit is not permanent. Once the IVA is completed and all obligations are fulfilled, it will be marked as satisfied on the credit file. While the IVA will still be visible for the six-year period, its impact may reduce over time as you demonstrate responsible financial behaviour.

Further considerations

Having an IVA may also affect any future income or assets. For example, if you move house during an IVA, any money you make as profit from the sale of your property might have to be paid into the IVA.

If your income goes up while you have an IVA, you have to declare it to your insolvency consultant.

We offer a free credit report appraisal service with no obligation HERE and are happy to carry out a full financial appraisal if you are thinking about taking an IVA. Contact us for a free, no obligation and confidential chat about your situation.

Equity release has become increasingly popular in recent years. It allows homeowners, aged 55 and older, to access the equity tied up in their property without having to sell it. This can be done in several ways, but the most common ones are through a lifetime mortgage or a home reversion plan.

What’s the difference?

A lifetime mortgage is a loan secured against your home that allows you to borrow a lump sum or receive regular payments. The loan is repaid from the sale of your property when you pass away or move into long-term care.

On the other hand, a home reversion plan involves selling a portion of your property in exchange for a lump sum or regular payments, while retaining the right to live in your home rent-free for the rest of your life. Although our advisers are unable to advise on home reversion plans, they are there to support you on lifetime mortgages.

How will it impact my family?

While lifetime mortgages can provide a welcome source of income for retirees, who may have limited pension savings, it is important to consider its impact on your family. Here are some things to keep in mind:

• Inheritance : Lifetime mortgages can reduce the amount of inheritance you can leave to your loved ones. This is because the lifetime mortgage will need to be repaid from the sale of your property, which may leave less money for your beneficiaries.
• No need to relocate: You can stay in your home while still accessing the equity tied up in the property. This means you don’t need to downsize or move to a different location to release cash.
• Financial support to family: Lifetime mortgages can enable you to provide financial support to your family, whether it’s helping with university fees, paying for a wedding or gifting a deposit for a house purchase.

Lifetime mortgages can be a useful tool for extra income, but it may not be right for everyone. It may affect your entitlement to state benefits and may reduce the value of your property. For more information, contact us here adviser who can support you and provide the best outcome for your situation.

Buying and selling property can be a complex and stressful process. One of the most challenging parts of buying or selling a property is the property chain. A property chain is where a group of home buyers and sellers are dependent on one another when purchasing a house – for example the owner(s) of the house you want to buy might need to find a house to buy themselves. It’s important to understand the challenges within a property chain, helping prepare yourself to reduce the risks.

Understanding the property chain

The property chain can cause a lot of issues for buyers and sellers, and it is essential to understand these issues in order to navigate the buying and selling process successfully.

One of the most significant issues with a property chain is that it can cause delays. If one person encounters a problem, such as a surveyor finding an issue with a property, it can cause a domino effect that delays the entire chain.

Another issue with a property chain is that it can be fragile. If one person pulls out of the chain, it can cause the entire chain to collapse, which can be incredibly frustrating for everyone involved. This can be especially problematic if you are close to completing the purchase of your new home and have already made plans to move in.

What can I do to reduce the impact?

Fortunately, there are several things that you can do to reduce the impact if these issues arise. Firstly, it is important to work with an experienced mortgage adviser who can help you navigate
the buying and selling process. Providing you with guidance on how to reduce the risk of delays and help you find properties less likely to be involved in a long chain.

Another thing that you can do is to be as prepared as possible. Having your mortgage in place, and all of your paperwork ready to go can help to speed up the buying process and reduce the risk of delays.

Good communication between all parties is also a must and helps to reduce the risk of misunderstanding.

The property chain is a necessary part of the buying and selling process, but it can be complex and cause a lot of issues. By doing all you can to prepare as much as possible using the tips above can help make the buying and selling process as smooth as possible.

How can Mortgages 4 U Help?

At Mortgages 4 U, we don’t just arrange your mortgage. We will follow each case through until you get the keys. That means we will keep tabs on the agents, solicitors and lender all to de-mystify the process, pushing things along all the way through and trying to explain what is happening in language you can understand.

We can also arrange solicitors, insurance, surveys and all the bells and whistles along the way to make sure you are looked after all the way through the process. Contact us HERE for more information on how we can help

In May 2023, the Bank of England announced an increase to its base rate by 0.25%, rising to 4.5% in the latest rise since December 2021. Inevitably, this will affect everyone throughout the UK. So what does it mean and how does it affect your mortgage?

What does this mean?

Approximately 2.2 million people in the UK are on variable rate mortgages, either on a base rate tracker, discounted-rate deal or a standard variable rate (SVR). For those on a tracker, directly following the base rate, payments will soon reflect the full rise. SVR’s change at the lender’s discretion, although most will go up.

Over 6 million mortgages are on fixed-rate loans. For those on a fixed-rate mortgage, the base rate increase won’t affect their deals until they come to the end of their product term.
For some that might be in a few years’ time, for others this could be in the coming months or weeks.

How will it affect my mortgage?

We are well into 2023 and as the squeeze on cost-of-living continues, it may seem like your finances are restricted. If you are one of the 6 million UK homeowners on a fixed-rate mortgage, you won’t have to consider a change until the end of your deal so there is plenty of time to plan ahead. The base rate rise could lead to everyday items becoming cheaper, helping you save a few pennies.

What about new mortgages?

It’s been a challenge for many searching for new fixed-rate mortgages, whether for their first property or replacing a deal. Despite lenders gradually reducing the cost of their fixed-rates, there are best-buy deals available that are cheaper. You may be tempted to wait for rates to fall, but trying to predict interest rates could cause problems.