Debt and Your Home

At Creditfix our main aim is always to work in the best interest of our clients, thus trying to ensure the protection of our client’s assets.

Prior to entering into an arrangement with Creditfix, the equity in your property will be assessed. Our qualified advisors will determine if an arrangement could be approved based on the attributes of the property. If we can ensure the protection of your property an arrangement could then be proposed to your creditors.

However, if is deemed that your property will potentially be at risk, we will work with you to find an alternative solution.

Dealing with your debts can be complicated at the best of times . When you bring property ownership into this it can get even worse. Every type of financial plan has different conditions attached to it and so when trying to deal with your debts so it is best to take stock and see how your assets will be affected. By checking the criteria of each solution you can work with us to find the best solution for you.

At this point you have fallen behind on your payments and your lender is now chasing you for your debts. It is worth noting that your lender and all those in the finance sector will be regulated by the FCA so there are actions and tactics that they can and cannot do. At this point the lender will not be interested into the circumstances as to why you have fallen behind in your payments, just that you have. However, the lender does not want to foreclose on your property if this will result in a greater loss for them. There are solutions that are available for you in order to help fix this matter.

Our biggest and most important piece of information when in this situation is to communicate with your lender. Simply ignoring the letters and phone calls will make the situation worse in the long run, whereas having a clear and open dialogue can allow you to set up a payment plan in order to get up to date with your payments.

Whilst you may have other debts such as credit cards or personal loans, we advise that you take a look at your finances in terms of incomings and outgoings. When doing this look at your budget and prioritise what you need to pay first then keep an open dialogue with those that you have not been able to pay.

If you have fallen behind on your payments to your lender be may be threatening to repossess the property. We at Creditfix would advise that if you have found yourself in this situation then you should immediately seek financial advice. Usually you will receive a notice of repossession in the post. If this is the case, we strongly advise that you do not ignore this and create contact with the creditor as this will make the process to fix it easier later on.

If you have been given a date for a court hearing it is advised that you attend this as it will give you an opportunity to set out your proposal for a payment plan in order to catch up with your arrears. If you fall behind on these repayments and are struggling with further debts and repayments, we advise to contact us to see what options are available to you to best suit your situation.

In its simplest terms negative equity means that the value of your mortgage is higher than the value of your home and this can lead to financial difficulties when selling your home. If you are not planning to sell your home anytime soon negative equity does not have to be as big a concern. However, if you plan to be selling your then negative equity can become an issue as the value from the sale of your home may not be enough to cover the mortgage and so you may be left with a shortfall.

An example of this is:

  • House value is £150,000
  • Mortgage value £180,000
  • Negative Equity £30,000

To check if this situation applies to you, you can ask a local estate agent for a free valuation of your home and draw that against your mortgage value to determine any shortfall. We here at Creditfix advise that if you are going to do this get more than one valuation to get a truer reflection of the value of your property.

We would advise in this situation that, if possible you increase your repayments or pay in a lump sum to reduce the deficit. If you are going to repay quicker speak with your lender first as you may incur early repayment charges.

Equity release refers to a range of loans that let you access the value tied up in your home if you are aged 55 or over. If you are having debt issues and in the position to release the equity in your property, then this could be a potential solution for you. In terms of structure you can take the money you release as a lump sum or in smaller payments. The balance of this debt is paid when the property is sold upon death or permanently moving into long term care.

If you are due to retire soon but are unable to do so due to outstanding debts or low pension, then equity release could be the option for you. For more information on using equity release as an option to settle outstanding debts contact us for advice.

Remortgaging is the process where you replace your current mortgage with a new one without moving home. This can be done by changing lender or by changing products with your current lender. The can reduce your repayments to a more affordable monthly payment, however this process can also be used to release equity and free up some cash reserves to pay unsecured debts.

We would advise that before you Remortgage any property that you speak to a financial advisor to see what other options are available to you. If you are considering remortgaging your property in order to release equity in order to pay unsecured debts, we would advise that you should speak to one of our advisors to see if there is a better option to suit your situation.

Our arrangements do not affect your tenancy agreements. While any rent arrears would not be included in your list of creditors a provision would be made to allow for you to repay the arrears and thus negating any risk of eviction. However, if you were to enter Bankruptcy or Sequestration you may be in breach of contract in this sense as many rental agreements have clauses regarding this.

Do you have unmanageable debt? Call today and find out how we can help.