In this age of global economic crisis, almost everyone at sometime, has suffered severe financial setback, some worse than others. The cause are varied such as, divorce, high interest rate credit cards, overspending, medical bills, or bad investments. The area most affected in any financial crisis is real estate, since many find it difficult to obtain or maintain mortgages as they plunge further and further into the abyss of debt. Whatever the cause, a way back to financial freedom and prosperity is mandatory.
Countries as a result, developed different methods of helping their citizens. In the US they utilize a Debt Settlement program in which large proportions of debt are written off. In the UK they employ the Individual Voluntary Agreement or IVA. An IVA mortgage though not perfect, may be the best solution for one caught in the financial quagmire in the UK.
IVA in the UK
The UK IVA method offers help to residents of UK. A formal proposal is made to creditors in an attempt to settle unsecured debts. Only those with serious debt problems, where a substantial amount of money is involved should consider an IVA. An IVA UK is not just a debt management program, although those exists for people with less severe debt problems. This is a binding agreeement between borrower and creditor, in which both parties will be held legally accountable in upholding their end of the agreement. Criteria to be illegible for an IVA UK inckudes the folowing:
* Must be a UK resident
* Over 18 years old
* Debt substantial enough to meet the requirements of the company handling the IVA service
Helpful Suggestions in finding the Best IVA Mortgage
* Get recommendations for the best providers.
* Look for those that are well established and has been in business for a long time.
* Study the track record of companies, see how many others in similiar financial situation as yourself, they have helped in the past.
* Make sure they are open to questions and provide information easily and freely.
* Look out for companies that are dishonest, or seek to charge a sizeable fee for every advice they give.
* Get quotes from at least two or three reputable debt management companies offering IVA services, and do a comparison. They will differ in rates and offers, sometimes substantially, however, your quest is to find one that will provide you with the best, to deal with your situation.
* Avoid new companies despite their irresistable offer, as they are an unknown entities without a proven track record. Engaging them could place you in a worse situation than before.
Obtaining Mortgages after an IVA
An IVA on a credit record, will be regarded by most financial institutions as a bad risk, showing the iindividual's credit worthiness has been compromised.
However, there may be specialists within that company, or independent brokers who they can be referred to, who handles IVA mortgages. They can usually assist in getting an IVA mortgage , or point them in the right direction for alternatives.
These debt management Specialist/lenders operate by meeting with the borrower, and reviewing the credit history. The date the IVA was filed and when it became satisfied will be taken into consideration. Any debt incurred by the individual during the period the IVA was in force and how these debts were handled, will be looked at They will also scrutinize the credit report for arrears, charge offs, or ccjs (county court judgments).
Costs involved
IVA rates are substantially higher than regular mortgages. This is because the borrower is considered a high risk, due to previous debts. However, the IVA mortgage when viewed as the means of getting out of a bad financial crisis, will justify paying the higher rate to meet this goal. It is also beneficial in restoring credit rating to a good standing, so that the individual can remortgage at a better rate in the future.
You may also want to look into the Individual Voluntary Arrangement as it must be made prior to an IVA
