When an interest-only mortgage ends, you have to repay all the amount you borrowed. You can't just carry on paying the interest. The money to repay it can come from three sources: savings or investments; by getting a new mortgage; or by selling your house. How many interest-only mortgages are there? FCA research found that at the end of 2022: There are now fewer than 1 million … [Read more...]
Will a prepayment meter make it easier to budget?
Many people want to reduce their gas and electricity bills and are wondering if switching to a prepayment meter will help. So could a prepayment meter help you to use less energy and budget more easily for these high prices? Sometimes a supplier will suggest you should change, saying the budgeting will be easier. But in 2022 and early 2023, many energy suppliers forcibly installed prepayment … [Read more...]
Car finance – what happens in an IVA?
Cars on finance can be a big problem with an Individual Voluntary Arrangement (IVA). Sometimes they can cause difficulty getting the IVA approved. Sometimes you face a major problem when the car finance end. With more than a million cars a year in the UK being bought on finance, this is an increasingly common situation. And one that is being made worse in 2023 by the cost of getting a … [Read more...]
Can you get a mortgage with debts?
People often think that a mortgage lender will look at how good your credit score is. That isn't right - sometimes you can get a mortgage with a not good credit score or you may be rejected with a great credit score. Three key factors in getting a mortgage are: your deposit the affordability calculation - this is affected by current debts that you are repaying; your credit history - … [Read more...]
Buddy Loans administration – no money for cash refunds
UPDATE Advancis was dissolved in December 2023 Advancis Ltd, trading as Buddy Loans, went into administration on 7 September 2021. Buddy Loans was a small guarantor lender. Its loans were typical of the UK guarantor market - between £1,000 and £10,000 lent on a 1-5 year term at a 49.9% APR. The FCA describes these loans as "high cost". Buddy's slogan was: If you've got a good BUDDY, you … [Read more...]
Increasing numbers of very long mortgages in 2023
Extra-long mortgages of over 35 years used to be unusual. Twenty years ago only 2% of first-time buyers had one. But by the start of 2022 this has risen to about 8% and that had doubled to 17% by the end of 2022. In July 2023, Taylor Wimpey said that in the first half of 2023: 27% of its first-time buyers had a mortgage of more than 36 years, up from 7% in 2021 (The very low figure in 2021 … [Read more...]
The FCA’s Consumer Duty – a new overarching principle
On 31 July, the FCA's new Consumer Duty came into force, bringing in higher standards of consumer protection. You may not have heard of it, but financial services firms have been working for a couple of years to be ready for this. Delivering good outcomes for retail customers is the new 12th principle in the FCA's handbook and is described as the overarching principle. That sounds very … [Read more...]
Big hikes in Paypal interest rate & minimum payments
Paypal's interest rate increases Readers have reported getting an email from Paypal in June or July saying their interest rate will be going up a lot. In the email, Paypal warns: You will pay more each month and take longer to repay any outstanding balance on your account. Not good! A poll I ran on Instagram suggested more than half the Paypal accounts in the UK may be seeing an interest … [Read more...]
Making a claim to the Morses Scheme [old article]
UPDATE - Morses Club went into administration on 17 November 2023. This scheme has now been terminated. See Morses Club goes under – in administration – Scheme fails for details and what customers should do. Morses sent out a batch of decisions on 6 July 2023. Many people have found these confusing - see the comments below this article. At one point the email says in a grey box: "Morses … [Read more...]
7 ways to save – which will work best for you?
Do you find it hard or impossible to save? many people feel they ought to be able save but always fail when they try. others are saving for a big goal but not as fast as they want. if you are struggling with money, you may desperately want a small emergency savings pot to make life a bit less stressful. There isn't a simple answer - no way is easy for everyone. What works for one … [Read more...]
Are you still paying fees on an old Gregory Pennington DMP?
For many years Gregory Pennington (GP), part of the Financial Wellness Group (FWG), has charged its clients monthly fees for running Debt Management Plans (DMPs) But MaPS awarded Gregory Pennington a contract that began on 1 February 2023. And it can't charge fees for DMPs under this contract. StepChange, Payplan and CAP have always provided "fee-free" DMPs, where all a client's payments go … [Read more...]
IVA mis-selling must stop – FCA finally acts to ban debt packagers
Many people have been mis-sold IVAs when they had a better (cheaper, quicker, less risky) debt option available. These other options were ignored or not properly described by some firms that should have given proper debt advice. IVAs are the only debt solution in England, Wales and Northern Ireland that generates large fees for the firms setting them up. These fees can distort debt advice given … [Read more...]
How to repair your credit record after bankruptcy
Bankruptcy badly affects your credit record for six years. This article looks at what should show on your credit record after you are discharged from bankruptcy. For almost everyone, discharge happens after a year. But if lenders don't record bankruptcy and your discharge correctly, they will continue to damage your credit record for longer than they should. Even if you … [Read more...]
How equity release works in an IVA
Are you in the last year of an IVA and have a house with equity? You may have to try to remortgage your house or get a secured loan to pay some of the equity into your IVA. This is called "equity release" This article looks at the questions people have about how equity release works in an IVA. If you are thinking about an IVA, you need to know about this before signing up. In 2023, most … [Read more...]
Klarna now allows people to “opt out” of future credit
On 24 May 2023, Klarna introduced a new feature that allows a customer to "opt out" of future credit. This covers Klarna Pay in 30, Pay in 3 and their longer-term Klarna Financing credit. Why is this needed? Many people find Klarna just too easy to use too often. Spreading payments with no interest being added sounds so sensible, but it still means that you have less money next month because … [Read more...]
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