However, industry experts state that there could be a problem if you have entered into an IVA and you are a homeowner. The IVA does not require the homeowner to sell their home, but there is a clause in the agreement that requires them to use the equity in their home to put towards their debts in the final year of the programme. The IVA usually lasts for five years, and in the final year homeowners will have to borrow against any equity in their home to pay some more towards their debts, and this could prove very costly.

For many homeowners in an IVA programme interest rates are far higher now than they were when they originally took out their mortgage, and for many this may mean having to remortgage on a much higher rate, or borrow money against their equity at a higher rate. In addition to this, the consumer will be charged additional interest as a result of being classed as a sub-prime customer due to being in an IVA programme.

One industry official stated: ‘There is a problem here. People in an IVA will be remortgaging into something significantly more expensive. Not only are mortgage rates higher than when these people bought their houses, but they could well be classified as sub-prime – that is to say as riskier borrowers who need to be charged more to compensate for that risk.’

Recent additions:

• Industry expert predicts 20% fall in house prices over two years
• Crippling mortgage rates for first time buyers with no deposit
• IVA homeowners could face problems

Refinancing mortgage could prove costly to IVA consumers is a post from: Glitec Loans

What may have seemed to be a suitable mortgage when you first took on this financial commitment may not seem so suitable some years down the line. Also if you took out a specialist mortgage, such as a discount mortgage or a fixed rate mortgage, you may find that once the special rate term comes to an end you need to look at an alternative in order to avoid having to revert to the lender’s standard variable rate, which can be high.

This is where UK remortgages can prove invaluable, as it enables you to switch to a more suitable mortgage to suit your changing needs. For example, you may be on a fixed rate mortgage where the fixed term is due to come to an end, but you do not want to pay the lender’s standard variable rate because it is too high. You could therefore look at remortgaging to another mortgage such as a discounted mortgage or even another competitive fixed rate in order to avoid reverting to the lender’s SVR.

Around a year and a half ago many people tried to avoid the up and coming interest rate rises by switching from a variable rate mortgage to a fixed rate mortgage. However, the tables have now turned, and interest rates have already fallen once recently with several further cuts expected over the course of this year. This means that those now on fixed rate deals will not benefit from the rate cuts, and could end up paying way over the odds on monthly repayments if they took their fixed rate mortgage out when the base rate had peaked.

It is thought that in light of the recent predictions over rate cuts many people on fixed rate mortgages could end up remortgaging to a variable rate so that they get to benefit from the rate cuts. Industry experts have suggested that a base rate tracker could be the best option for many, as this benefits from any rate cuts right away.

If you are planning to remortgage you should make sure that you do your research. First of all you need to take into account any charges that may apply and work out whether it is worth remortgaging. For example you may find that you have to pay a fee for closing your existing mortgage off early, and you may also find that you are charged some form of set up fee for taking out the new mortgage.

All of these costs can quickly add up, and you may find that the amount that you have to pay out does no justify switching. However, if the fees and charges involved are low and you can find a suitable alternative UK mortgage you may find that switching helps you to save a fortune both in terms of total interest paid and in terms of your monthly payments.

Is it time to remortgage? is a post from: Glitec Loans