Tuesday, 28 July 2009

Top tips to save energy and money

posted by debts.org at 00:54

• Insulate your walls

You could save up to £175.00 a year in an average household by insulating your walls. You may even be able to get a grant to help towards the cost of installation of home energy efficiency measures, such as cavity wall insulation or loft insulation. Grants are available to any household, and not just available to people on low-income or benefits.

• Comparison websites for energy suppliersCheck out the comparison websites which compare the cost of different energy suppliers in your area. Suppliers now offer a range of deals to new customers reduce the cost of installing energy saving and renewable materials. Visit www.energysavingtrust.org.uk/gid.

• Get a new boiler and controls to save moneyIf your boiler is more than 15 years old, you should replace it with a new energy-efficient one. A high-efficiency condensing boiler will save you hundreds of pounds a year.

• Look after your fridge

Never leave fridge or freezer doors open longer than necessary, and avoid putting hot food in the fridge. Defrost the freezer regularly and check all door seals are working properly. Simple measures could save you up to £100.00 a year on bills. If you buy a new fridge make sure it has the energy saving logo. Most people who have debt problems in the UK, could avoid more problems in the future by saving energy and saving money at home.

• Cover your hot water tank

Fit an insulating jacket on your tank to save energy – it will only cost you a few pounds.
• Use energy efficient light bulbsYou could save up to £60 a year by switching to energy-saving light bulbs.

• Defeat draughts and double glazingIf you fill gaps under skirting boards with beading or mastic sealant, you can save money off your annual heating bill. Double glazing will save you a lot more. Double glazing cuts heat loss through windows by at least 50%. If you only want to replace some of your windows, choose the ones which cost you most to heat such as the living room.

• Insulate your loft

If you insulate your loft to a minimum of 270mm you could save up to £205 a year on heating bills.

• Save water at home

If you are unfortunate enough to be stuck with a local water supplier, and are not free to swap suppliers, then have a water meter fitted, otherwise you could find yourself paying the same as the family next door, even though you may live alone. If you find the change does not save you money you can change back to the old system within 12 months.

If you are struggling to pay your energy bills, and would like some free advice and help about how to reduce your bills, or to see a comparison site, check out debts.org. If you have debt problems which seem to be spiralling out of control, contact us free of charge and one of our friendly team will discuss a debt management plan with you and give you free debts advice and guidance.

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Friday, 10 July 2009

Should I remortgage to help solve debt problems?

posted by debts.org at 04:18

At a time when thousands of families in the UK are suffering from the credit crunch, it may be tempting to remortgage your home to release much-needed cash, or simply to make your payments more affordable. Re-mortgaging can be the answer to your prayers, but it can also be a financial headache if you don´t choose the right options for you. Don´t jump at the first offer of a re-mortgage and take your time to shop around for the best deal to suit your needs.

Save money by remortgaging

More than 50% of all borrowers are said to be paying more than they need to for their mortgages each month. Often paying the bank or building society´s standard variable mortgage rate, many borrowers are unaware that other providers will offer lower rates. If you are considering remortgaging to help with debt problems, look around to find the best help available. Debts.org can give you advice and guidance if you are thinking of remortgaging your home in the UK. Mortgage rates have been hiked recently to subsidise low interest rates, and mortgage arrangement fees have also risen, along with charges for early payment/completion of a mortgage. If you are attracted by low interest rates, always ensure that the mortgage fees don´t make re-mortgaging more expensive.

Who to contact for independent mortgage and remortgage advice Financial advisors can recommend the best type of re-mortgage deals for you. You will also find a host of independent mortgage brokers who will freely advise you about the general state of the mortgage market, and who will be the best people to approach for a re-mortgage. Brokers will, however take a commission from the provider they recommend to you, and this could bias things towards particular banks/building societies. With so many internet comparison sites available to you now, it is advisable, and usually cheaper, to do some of the legwork yourself. Debts.org can then advise you how best to go about your re-mortgage.

Check your terms and conditions before re-mortgaging

Always make sure you fully understand the terms and conditions of your existing mortgage before contacting banks/building societies about re-mortgaging. You can then assess if there are any early redemption penalties and also make sure you are not financially tied-in to your existing mortgage deal. Serious debt problems and credit card debt problems can be eased by releasing money by re-mortgaging, but you need to make the right decisions to ensure you will not be paying out more in the long run.

Many penalties for early repayment expire after a set amount of time. Decide whether it is worth switching to a different mortgage/rate or staying with your current mortgage until the penalty dates have expired. Loyalty to banks and building societies is often misplaced. Ask yourself honestly, what they have done to reward your loyalty over the years, and never feel pressured not to move your mortgage if you can find a better deal.
Borrowing extra money through remortgaging

The main reason borrowers choose to remortgage, is to save money, and possibly to use it to clear other debts or loans. But you may want to remortgage to release some equity that has built up in the value of your property. Equity release is not uncommon, but you need to be cautious. It may work out cheaper on paper to borrow extra money through your mortgage, but the debt would then become secured. A secured debt is one that, if you default on your re-payments, means you could lose the collateral used for the loan. (Your home, in the case of a mortgage).

What remortgage choices will I have?

The most likely remortgage offers you will face will be fixed, capped, flexible or discounted arrangements. Fixed rate mortgages and remortgages are favoured by homeowners who want the certainty of paying a fixed amount each month. This rate can be fixed for between 2 and 5 years.

A capped-rate loan will offer a limit on the rate you pay. If interest rates rise your repayments will not go over a certain level, but you can still gain if rates fall below the capped-amount, as you will pay less.

Flexible mortgages enable you to overpay and underpay your mortgage repayments when you choose, and without penalty. This is ideal for people who have fluctuating incomes each month, or for those who may want to clear their mortgage early.

Discounted mortgages offer a reduction off the standard variable rate (SVR) for a set amount of time. If interest rates fall, the rate you pay will also fall but obviously it will rise with any interest rate increase.

If you are suffering debt problems, it may be that other options are open to you, apart from re-mortgaging. Debts.org can give you advice about debt management plans and Independent voluntary arrangements, as well as remortgaging options.

What to avoid when remortgaging

Try to avoid any remortgage deals with extended early payment penalties. Several lenders are now attempting to re-introduce extended penalties to avoid borrowers from switching from one bank to another in an attempt to reduce their repayment amounts. Always read the small print of any deal, and insist you are shown a clear print-out of all charges you are expected to pay if you agree to remortgage your home. Never sign anything you are unsure of, and take independent advice if you are worried about any of the remortgage clauses.

How to remortgage your home

When you decide to remortgage your home, firstly obtain a statement from your current lender which states how much money you still owe. Secondly, complete an application form for the bank/building society from which you intend to remortgage, along with details of your income, payslips, mortgage statements and proof of identity, plus a P60 form where applicable. The new lender will then carry out a survey on your home, which can cost up to £300. An arrangement fee may also be charged by the new lender which can cost from £200 to £1,000, depending where you are in the UK and the amount of your mortgage. If you shop around you may find lenders who will offer remortgaging services with free legal work and valuations, but the majority will charge you something.

Remortgaging works for thousands of people a year in the UK, but the main point to remember is: Always make sure savings on the monthly mortgage payments outweigh any costs incurred while making the switch from one arrangement to another.

How long does it take to remortgage a property?

It shouldn´t take longer than a month to remortgage a property, and the new lender will liaise with your previous bank/building society to complete any formalities.Once you have received a completion statement from your solicitor or from your new lender, the process is complete.
Debts.org can give you advice about a range of options to help you with debt problems. We are here to help, and our friendly staff will give you sound, professional advice about getting out of debt. Here at Debts.org we will explain and offer advice about debt management plans, Independent Voluntary Arrangements, remortgages and even bankruptcy.

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Wednesday, 8 July 2009

Remortgage your home to relieve debt problems

posted by debts.org at 04:14

If you want to cut your monthly repayments, or if you are struggling with debt problems or credit card debt problems, you could remortgage your home. A remortgage is the process of moving your mortgage from one lender to another who may offer better terms and conditions, which will help you with your repayments. You don´t necessarily need to have a debt problem to consider re-mortgaging your home.

The main reasons to consider re-mortgaging your property are:

• To reduce your monthly repayments by securing a cheaper mortgage

• To release some of the value built up in your property for other spending, such as home improvements or to alleviate debt problems

• To extend the term of your mortgage, which will mean cheaper monthly payments

• To reduce the mortgage term you could find a cheaper deal, keep the repayments the same, and pay off your mortgage in less time

Banks and building societies in the UK have tightened their criteria when it comes to mortgage lending and now deposits of 15-20% are typically demanded before they will consider a remortgage application. The higher your deposit, the more likely you are to find a cheaper interest rate. If your original mortgage was taken out with only a small deposit, your equity may not enable you to remortgage. In this instance, you may have to accept the lender´s standard variable rate (SVR). If you are able to switch your mortgage, important things to remember are:

If your original mortgage was taken out with a small or no deposit, you may find there is not enough (or any) equity for you to remortgage. This means you may have to put up with your lender's standard variable rate (SVR) until conditions improve. If you can switch, here's what you should do:

1. Re-mortgage paperwork

You should begin to think about remortgaging at least three months before your current deal finishes. Keep together your latest mortgage and bank statements for presentation to the prospective new lender. If your current deal is a tracker or variable rate deal, it could have reduced in the past few months, so check what you were paying before the reduction. This will help you to assess how much you can reasonably afford to pay when you re-mortgage. You can then compare your current mortgage repayments with the new re-mortgage offer.

2. How much will it cost me to re-mortgage?

Always check the small print of your current mortgage documents for details of early redemption charges (ERC). These charges can make re-mortgaging unviable. There may also be an exit fee which a lender may charge for closing your mortgage early. Contact your lender for a quote for paying off the mortgage plus any extra charges he may include. Any exit fee must correspond with the one in your mortgage agreement. If you have a fixed-rate deal, check whether any ERC are applicable.

3. Loan restrictions could cause more mortgage debt problems

Early redemption charges (ERC) do not necessarily finish when your fixed rate ends. You may need to pay the lender´s standard variable rate (SVR) for a set period after the initial deal ends. When interest rates are low, this can be advantageous to you, but as rates rise, being stuck on the same rate could prove more expensive for you in the future.

4. Find the best refinance mortgage for you

You need to take advice on the best refinance mortgage to suit your needs. You may want a fixed rate, a tracker or a variable rate mortgage. You could either speak to the lenders directly, or try a comparison website to find the re-mortgage you want. If you use a mortgage broker, some lenders will not offer the best deals, and charges can be higher. Brokers can however be particularly helpful if you only have a small deposit, are self-employed or have a bad credit record.

5. Work out the fees for a refinance mortgage

The best refinance mortgage deal for you may not come cheaply. You may be expected to pay legal fees, application/arrangement fees and a valuation fee. Fees can be added to the loan but bear in mind you will be paying interest on that amount for the remainder of the mortgage term. Some fee-free deals are available where lenders pay for or refund legal and valuation costs, but they can come with a higher interest rate. You need to weigh up all the pros and cons before agreeing to one of these re-mortgage deals to make sure you will be saving money in the long term. Beware of excessive charges and hidden extras such as high redemption penalties.

6. Ask your mortgage lender to match the new deal

Once you are aware of the terms and conditions of any new refinancing deal, go back to your current lender and see if he will match it or better it. You have nothing to lose, and you may be pleasantly surprised. If you decide to stay with your current lender you will save time and hassle.

7. Applying for a re-mortgage deal

Apply for the new mortgage deal before your existing special offer rate expires. You may want to approach several banks/building societies to see what they can offer you, giving you more chance to secure a deal that suits your requirements. You will need to complete an application form, provide proof of income and proof of identity. Different lenders may require additional documents.

8. Wait for re-mortgage information from your lender

Based on the details you submit to the new lender, they should send you an agreement in principle before arranging a survey of your home, to make sure they are happy to accept it as security against your loan. Once the survey has been undertaken and all fees paid, the new lender will send you a mortgage offer and he will deal directly with your current provider. Once the deal is complete, you should receive a completion statement. The process of refinancing your home should take no longer than a month, unless you are borrowing extra finance, then it could be longer.

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