The Debt Advice Online Blog

According to recent headlines, mortgage lenders are being accused of unfair mortgage exit fees on some borrowers. Now the mortgage lenders who participated in these unfair practices are being force to repay the charges. Could you have been a victim of unfair mortgage exit fees? Could you be able to claim a repayment? It is easy to find out whether you qualify for some money back. All you have to do is familiarize yourself with the terms of your mortgage and exit fee agreement.

In the history of mortgage fees, the fees that a borrow has to pay have stayed relatively stable. But in 2004, prompted by a large lender company, the fees began a dramatic increase. The lenders say they have the right to increase their fees for the mortgage contract. No one is protesting the rise in fees, it is the dramatic jump that has occurred in the lat four years that have borrowers upset. Some banks have been known to push fees into the hundreds of pounds and no one could do anything about it.

The watchdog group Financial Services Authority is now watching out for borrowers. Since the group found that many of these increases were unfair, there is a chance that they borrowers are owed a refund from their lender. If you believe that you have been hit with an unfair exit fee, you can determine how much you will get back by what you paid in and if the increase raised during the period of your mortgage loan.

The first thing you can look at to determine how much you could get back in a refund is to see the difference between the fee that you paid at the end compared to what was originally listed on your mortgage agreement. If you have borrowed money before, you can look at your previous mortgage to compare the difference in fees to see if the most recent mortgage was unfairly raised.

Even if you don’t have anything to compare to, you can still complain to the bank in order to see if they will offer you a refund. If you feel that what you paid for you mortgage exit fee was too high, bring it up to the bank and many times, the bank will refund a portion of the exit fee. Remember that the true cost of a mortgage exit fee should be around £35.

Also, remember that exit fees are charged for the administrative work on the loan. There are other fees that go along with your mortgage that don not fall under this refund category, so make sure you are looking at all the right numbers before you go to claim a refund. If you do feel that you were charged an unfair amount on your mortgage exit fee, you are entitled to ask for a refund. Although you may not get one straight from the bank, you still have legal options that you can pursue in order to reclaim some of the money that you paid.

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Do you know what a PPI is? There is a good chance that your loans, credit cards, or store cards have a PPI, or payment protection plan along with it. If you didn’t know that you had one, you might want to check to see if you can get refunded for the money. Many PPI plans are sold to people without their knowledge, and it could mean the difference between being okay and being in debt. You do have a chance to reclaim money spent on a PPI plan.

The purpose of a PPI plan is to protect you against not being able to pay your loan or credit card bills. If you cannot pay because of an accident or illness, or is you are out of work the PPI plan is supposed to cover the payments for a specific period of time. The problem with a PPI plan is that they are extremely poor value for the money that you would spend on one. The potential benefits are nothing compared to the cost you will endure by having this protection on your credit cards and loans.

There is a chance that even if you do have a PPI plan, there would be a chance that you wouldn’t be able to claim it if you needed it. Many PPI plans are sold to people who will never be able to claim it. The policies are written so that most of the time, people who will need to use it will not qualify to claim any benefits from it. For example, you cannot claim a PPI plan if you are self-employed and cannot work. Also, if you are retired with you took out the plan, it will not cover you. Other instances where you cannot claim benefits from your PPI plan include medical conditions that are not previously explained and you cannot be covered for loss of work for stress or back injuries.

According to the Office of Fair Trading, just one in five claims on a PPI are successful. And now there is sufficient evidence that many companies are forcing customers to buy into PPI plans when they really don’t need or want them. Many companies like this will tell the customer that is it compulsory, even though it isn’t. If someone tries to sell a PPI to you, question the reasons. Often times, bad companies will refuse to quote you on a loan without taking the PPI. If that is the case, you may want to find another company to work with.

The Office of Fair Trading and the Financial Services Authority are groups that are working to investigate the PPI market. They are looking out for your best interest in order to save you time and money when you are dealing with companies that offer PPI. If the sellers of the plan do not conform to the rules of selling PPI, you may be able to reclaim the money you spent on the plan. Make sure you are buying from a reputable company.

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Many people have questions about loans and borrowing procedures. Asking the right questions to the bank will give you a better idea of what you are getting into when you want to borrow money. Lenders should always welcome your questions so you will have a good understanding of your loan.

Some of the most common questions are often left unasked because of embarrassment or misunderstanding. Having an open dialogue with your lender will open your eyes to the process of securing a loan from the bank.

The first question you will need to ask your lender is how much money you can borrow. Depending on what you want to use the loan for, the bank can give you their specifics on how much money they can lend for that type of loan. For example, a personal loan will most likely be on average a lot less money than a home loan. Based on that, you should also only borrow the amount that you need. If you borrow too much more, then you will get stuck with more interest than if you had only borrowed the amount you need. You should also ask your lender how small of a loan you can borrow as well.

Another question you will need to ask is about the availability of the loan. If you are in a hurry to get your hands on the money, you may be in for a surprise. Some lenders will take longer than others. If you have worked with that bank before, you may have a quicker turnaround that a new customer coming to borrow money. Try to work with people that you have worked with before, if at all possible.

You will also want to discuss the interest rate and types of loans that you want. The lender will be able to explain these options thoroughly to you, but if you still have any questions about the rates or types of loans, do not hesitate to ask. The lender is there to make sure that you understand what the loan is asking of you.

If you are worried that you may get into a situation sometime within the duration of the loan where you will not be able to make payments, it would be a good idea to look into a payment protection insurance. This will protect your loan repayments in case of a job loss, illness, or other type of financial difficulty. The payment protection plan is most cases will also cover you in death so that your family will not have to worry about that particular matter.

Remember that the lender is there to answer any questions that you may have, especially with the loan application. The written application is an important process in acquiring you loan. Making sure that everything is filled in correctly is important. You can get help with you application from any lender. It is better to feel like you are asking too many questions rather than not understanding something that will impact you financial future.

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Everyone needs to have a household budget. A household budget is the only way you can regulate your spending to be able to save for the future. With a household budget you will also be able to save up for those extras that you will want, like a family vacation or a new car. It is easy to begin a household budget—the hard part is sticking to it.

To begin your household budge, you will need to track your spending for one whole month. This will include all expenses such as subscriptions, dining out, and those morning coffees on the way to work. This is how you will be able to see how your day to day expenditures are adding up.

If you want to be able to see right away how much money you have to work with at the end of the month, sign up to pay your bills with direct debit. This way, you may also save money because many companies will give you a discount for paying this way. This will get the necessary bills out of the way and give you an idea of what you’ll have left.

To stay on track with a budget, keep a computer spreadsheet of your incomes and expense. Use this as a way you spread out your bills so that you don’t have to pay a pile of bills all at once. This is also the best way to plan and track those bills you will only have once or twice a year, like your car insurance of TV license.

Keeping a household budget will keep you from having to deal with overdrafts at the bank. Most banks charge for unauthorized overdrafts and you can prevent having to do that by keeping good records of your monthly expenses. If you are still in trouble and cannot pay some of your bills, you might want to consider looking into personal loans. Personal loans will give you the boost in income that you need for the time being, but remember to shop around for the best rates just like you would for any other type of insurance.

A budget will help you stay on track so that when you see a big ticket item, you will not impulsively buy it and then have to take it back or not pay a bill because of the cost. If you make sure there’s room in your budget for some extra money to play around with, you will be able to get those items that you want over time. If you are on a tight budget and cannot afford many of the things that you want, throwing away the budget won’t help. Sticking to that tight budget will give you a better financial stability in the future. Make sure that you have what you need, but don’t feel bad about having to wait for those little extras.

Remember that a budget is not keeping you from spending your money—it is simply helping you to spend it on the most important aspects of your life.

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Every adult needs to purchase a life insurance policy. For those with a family, it is that much more important. Life insurance will make sure that your family is taken care of if something were to happen to you. Life insurance will cover all of the bills that are left as well as funeral expenses and any other unforeseen bills that may come up.

There are two different types of life insurance policies available on the market: whole life insurance and term life insurance. Depending on your needs, you will have to decide which policy will best suit your circumstances.

Whole life insures is a policy that will run throughout you life. This will guarantee that your dependents will be receiving a payment when you die. This is the best type of insurance to get in order to cover funeral costs, a mortgage, and outstanding debts. It is also a good plan if you just want to be able to leave your family with a sum of money to do with as they wish.

The amount you will have to pay for a whole life insurance policy depends on a variety of factors: gender, age, smoker status, and your medical history. The amount of coverage that you want will also determine the size of your payment. Depending on your needs, you will want to try and get the most coverage that will fit into your monthly budget.

Some whole life insurance policies provide cash back to the policy holder if the life insurance is cancelled, but this does not mean that the life insurance policy should be used as a means of investment. They can be used as a part of inheritance tax planning.

If you are not looking for a complete amount of coverage for you and your family, you can also think about term life insurance. Term life insurance policies will cover your family to protect them financially should you die. The catch to a term life insurance policy is that if you die within the term life of the policy, you family will be given a lump sum of cash. If you are still alive at the end of the term of the policy, the policy does not pay anything. You can still have coverage from it, but if you stop paying the insurance premiums your coverage will stop.

Term life insurance coverage costs are also determined by age, gender, smoker status, medical history, and the amount of coverage you will require. Generally term life insurance is less expensive than whole life insurance, but every individual pays a different amount for term life insurance depending on your specific circumstances.

Life insurance is an important policy to have for anyone with a family. This policy will help your loved ones be able to pay the funeral costs and any outstanding bills that you may leave behind. Having a policy of some kind will give you the peace of mind that you know your family will be taken care of.

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There are thousands of people all over the country that are in debt. Severe debt can even make a person have to fall back on filing for bankruptcy. If you want to combat you debt before it becomes a really big problem in your life, you will first want to know some of the basic ways that people get caught up in debt. Not everyone realizes where their debt began, and if you go into financial transactions considering all of those little extra costs, you will be a wiser consumer.

The first debt maker is your APR. The APR (or annual percentage rate) on a mortgage, personal loan, or credit card is the amount of interest charged onto you balance each month. This is the single biggest factor in debt. Some people, especially with credit cards, do not pay attention to the APR or whether it is a variable rate and sometimes will spend much more than they can afford.

The next culprit of debt is the credit card. Credit cards are useful in many ways. They can allow you spend money that you may not have available to you right at that moment, and they help you to build your credit rating. However, credit cards are the easiest way to put yourself into debt. If you spend near the limit of your card and have no means to pay a sufficient amount of the bill at the end of the month, you will soon begin to accrue interest on the balance. This interest will soon be all the you pay if you only pay the minimum payment each month. This can trap you in and endless cycle of debt, so use credit cards wisely.

A way to reduce debt is to use debit cards instead of credit cards. You will get the same convenience of using a credit card, although you will not have to pay interest and the money comes directly from your bank account. But watch that you do not accrue overdrafts. If you consistently use overdrafts, you will build up interest on the money you didn’t have in the first place. This is an unnecessary debt and should be avoided as much as possible.

A hire purchase is a good way to get a big ticket item such as a car quickly, but it can get you into trouble if you are not able to make the monthly payments on the balance. You have to begin with a large deposit on the item anyway, so if you are thinking about getting a hire purchase, make sure you can pay a lot on the initial down payment.

When you secure any type of loan, make sure that you are shopping around for the best interest rate. Getting a bad interest rate on a loan will put you in debt quicker and can easily make your financial situation worse. Personal loans and students should have a low interest in order to pay them off in a timely manner and without missing any of your payments.

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If you are thinking about filing bankruptcy, you will need to weigh the pros and cons of the situation. Of course bankruptcy is not the best option for everyone, but for most it can mean getting back on track with your finances and being able to free yourself from the debt you’re drowning in. With a little advice, it may be an easy choice.

The disadvantages of bankruptcy are that you will lose control of your assets and your credit will be scarred for years to come. All of your assets have the potential of slipping through your fingers, even your home. You will not be able to get more than £500 credit unless you are willing to disclose first tat you are bankrupt. Your credit rating will be under fire for a while, and this will set you back in trying to borrow money.

What is the most disadvantaged is the fact that your bankruptcy will be made public knowledge in the newspapers. This, for some profession, can cause you to lose your job. Certain job markets will not let people work for them while they are bankrupt.

There are, however, advantages to filing for bankruptcy if you are in the position where you will need to do so. If you file for bankruptcy, you will have all of your debts written off. For most people, that means that they will become debt free within a year. Also, if you rent a place to live you will be able to continue living there and paying rent, even after all of your debts are written off at the end of the period of bankruptcy.

And if you decide to file for bankruptcy, then you decide that this choice wasn’t right, there are options where you can annul your bankruptcy order. You can do this if you can prove that the bankruptcy order should not have been made, the creditors agree to an individual voluntary arrangement, or that the court is satisfied that you have paid all of your debts or they are guaranteed that they will be paid within a certain amount of time. If you the order is annulled, you will be able to return to pre-bankruptcy status.

There are also restrictions on filing for bankruptcy. You will not be able to obtain more than £500 in credit without disclosing the bankruptcy. You cannot carry on a business with a different name to hide the bankruptcy. You will also need permission from the court to form or manage a company. Some professions are also restricted to work while bankrupt, and you have to notify any bank when you open an account that you are bankrupt.

Bankruptcy is a choice that should not be made lightly. If you are thinking about it, weigh all of your options first. There are many different pros and cons to the filing of bankruptcy, but only you and your creditors will be able to determine whether this is the best option for you or not.

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There is no denying that the housing market is very… shall we say: volatile these days. Every since the subprime mortgage meltdown, the slowing economy, and the slump in home prices, it has been a veritable minefield of dangers for first time buyers. So, what can you do to insure you make it safely to your dream home?

Do your Homework

First off, do some research regarding the area you want to live in. Make a list of the amenities you want, and prioritize them. Are you a young couple just starting out? Do you plan to have kids soon, or already have several? Always keep in mind that you can’t always get everything you want in a home and its neighborhood. That is why prioritizing is vital! What are the really important issues for you? If good schools are more important that a convenient commute to work, make sure to look for homes in those areas.

Assess your Income

Next, look at your income. So often, first time buyers will go out, look at homes, and then fall in love with one. Then, after they see the price, they try to figure out how in the world they can afford the payments! That is the totally wrong way to buy a house. No, you and your spouse need to sit down, look at your income, and figure out what you can reasonable afford for a monthly mortgage payment. Be sure to make allowances for property taxes, homeowner’s insurance, and other household expenses. Then, once you have a handle on what you can afford, start looking for homes in that range.

Look Beyond the Obvious

When looking at a house, do not let its outward appearance dissuade you from considering it. A house with some seriously ugly wall-to-wall carpet may make you gag. Yet, if you but peel up a corner of the carpet you may find beautiful terrazzo floors, or maybe long forgotten hardwood flooring! A house that is pink with purple trim may make you want to reach for a bottle of Pepto-Bismol, but remember that something as simple as a paint job can change that. An overgrown backyard with dead trees and a shed that is falling down could be a deal-breaker, until you think about how easy it would be to clear it all away. One weekend’s labor and you could have a lovely play area for the kids.

Then there is always the “fixer-upper”. If you are all approved for a mortgage, you have your down payment, and you are ready to go, you may find a house in the perfect location, and with everything you want. But, it is in rather poor shape. Here is what you do: ask a contractor to give you an estimate for fixing the place up. If he can do it for a good price and the seller is willing to take a little less in view of the repairs needed, you can buy the house, get it fixed, and have you dream home!

Also, never underestimate the value of good, old fashion hard work. In the case of that home we just looked at. Whatever the contractor says it will cost to make the repairs, and you can only get the seller to take the price down a little bit, consider doing some of the work yourself. Look the place over and make a list of all the improvements needed. Then, assess what would be involved in each job. Things like: clearing the garden, painting the bedrooms, pulling up the old carpeting etc. are small jobs that you can do yourself over time. Granted, the house will not be perfect right from the get-go, but many first time buyers face the prospect of their house being less than ideal. Consider carefully before jumping into anything; or passing up what could be a golden opportunity.

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If you are from Eastern Europe, mainly the Czech Republic, then Iva is a woman’s name, or maybe a character in a book. But, in the United Kingdom, an IVA is what is known as an Individual Voluntary Arrangement; and it is a way for a person to avoid bankruptcy. First created in 1986 by the Insolvency Act, an IVA is a way for someone in debt to propose a repayment plan to his or her creditors. It is a formal agreement, usually drawn up and presented to the creditors by an Insolvency Practitioner, and it only applies to the debt a person owes to unsecured creditors.

The IVA plan has several key advantages to it, not the least of which is its flexibility. So long as the creditors are satisfied, the person can build it around their unique conditions: their income, their resources, and any help from a third party (friends, family etc.). Then there is the issue of bankruptcy. If an IVA works out – if it is acceptable to all concerned parties – the person can sometimes avoid bankruptcy. Think of all of the positive aspects of that! A bankruptcy will affect you credit, your ability to organize a business, and there is a certain stigma associated with it. Setting up an IVA is cheaper than the cost of discharging a bankruptcy, and you can be assured of keeping your home. That right there is a major reason for making use of an IVA. Finally, all of your creditors are bound to adhere to the IVA, even if they do not like it (that part will be explained in the next section), which means you will not be hounded by individual creditors trying to get their money from you faster than you have agreed.

The Insolvency Practitioner plays a key series of roles in the IVA process. First they are an advisor. They will look at all of your debt, draw up a list of possible solutions: re-financing, debt consolidation, bankruptcy etc. and then discuss the pros and cons of each. If you elect to go with an IVA, they will then draw up the formal agreement. They will look at your income, your debt, and figure out how much you can pay into the IVA, and when. You may do it monthly (the most common), quarterly, weekly etc. The proposal will also include some background information to explain how your financial difficulties arose. They will also list all of your assets, and break them down as to which ones will be included in the agreement, and those to be excluded.

Next, the Practitioner will act as the Chairman of the creditors’ meeting. This is where the IVA is formally presented to them, and they vote on it. Now, here is the tricky bit: the creditors do not vote as individuals, they vote according to how much you owe each of them. Sort of like shares of stock in a company. So, if you owe Mr. Smith a thousand pounds, and nine other people each a hundred, even if the nine all vote “no” on the IVA, if he votes “yes” – it is accepted!

After that, the Insolvency Practitioner then becomes the Supervisor of the plan. They will make annual reports to everyone – including the court, they will monitor everything to insure all payments are made on time, and the monies distributed as per the IVA, and report to the court of the debtor misses three or more payments. This is the critical bit; because failure to make regular payments could mean a judgment of bankruptcy against you, and then the creditors take the lot! So, if used properly, an IVA can be an excellent means of getting out of debt.

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Define Your Monthly Income

If you are going to draw up a monthly budget planner, step one in the process is figuring out what your income will be. Your most basic income will be your salary, and your spouse’s salary, if you’re married. Then there are things like bonuses, dividends, interest, and any sort of investment income you might have. If you work for a company that reimburses you for various expenses, include that in your monthly budget planner. Gifts might not be a regular source of income, but it doesn’t hurt to include those, plus a column for “Other” as there always seems to be something that doesn’t fit into another category on a monthly budget planner.

List all of these headers in one column, then make a second column labeled “Expected” and a third called “Actual”. This way your monthly budget planner can keep track of what you expect your income to be, and what it actually is. The trick for good money management is in living within your means, i.e. not spending more than you can afford to pay each month. We all know that for big purchases like houses and cars, that may not be possible and may necessitate you getting a loan. But if you do need a loan, then try to get one on which you can afford to pay the monthly repayments in full each time; that way you are not building up further debts. If you have to pay back interest on a loan and on top of that you acquire late payment penalties, the only one who is benefiting is your credit company.

Outline Your Expenses

The next step in putting together your monthly budget planner is to figure out what money you need to cover your expenses. So, you make a column of everything you pay out on a regular basis. That will be things like mortgage/rent, home insurance, auto insurance, auto payment(s) (if any), auto expenses (gas, oil etc.), bank charges, groceries, clothing, childcare (if you have any), and then your utilities bills.

It is important to break these costs down individually: gas, phone, water, electric, cable TV, Internet, sewage, garbage, and any others you might have. If your monthly budget is out of control and something needs to give, you will find it easier to look for small savings you might make on utility bills if they are itemised. This might be turning if lights in empty rooms; adjusting central heating thermostats and timers to save on heating bills or being more careful in your telephone use.

Then there are the little things that you may not have every month, but you need to keep track of. This can be things like eating out, visits to the barber/salon, medical/dental, entertainment and recreation, household repairs, gifts you give, travel expenses, subscriptions to magazines, spending money, club membership dues, and taxes. These are things which are usually not essential, and so some room for savings can be found in these when planning your monthly budget, but remember not to cut back on these things completely; after all, they are often the thing that make life worth living!

If you have credit cards or student loans which you need to make repayments on, or some other long-term bills, list them on your monthly budget planner too. As with your income, then put down a column for the expected expense, and one for the actual.

An Expense You Don’t Expect

One thing that many people overlook when drawing up a monthly budget planner is the “expense” of savings. Too often people don’t think about saving; they put it off thinking they can do it another time. Yet, it is something you need to be aware of, and should include in your monthly budget planner.

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