Thursday 30th of July 2009
A homeowner has written in the Guardian about how she asked her mortgage lender for a payment holiday after a company she dealt with folded.
Blogger at the newspaper Ivy A said that as she was self-employed, the collapse of a client hit her finances hard.
Seeking a mortgage payment holiday is not the only step she has taken to take some of the pressure off. Three years ago, she entered into an individual voluntary arrangement (IVA) because of a failed business.
This means that rather than going down the route of bankruptcy, Ivy A could make fixed monthly payments over five years.
She noted: "The benefit of an IVA is that you keep your home, though if you sell within the five-year period any equity is, quite reasonably, taken by the creditors."
While IVAs cannot reduce mortgage payments, they can freeze the interest on other financial commitments such as credit card balances. This could free up cash to put towards mortgage payments.
By Neil Burton
- House price rise 'may not indicate recovery'
- Equity release 'needs to be increased'
- Need for IVA help could increase as expert predicts reduction in lending
- Government announces 'breathing space' for those needing IVA help
- Lack of subprime lending creating need for IVA help, expert suggests
- IVA advice may be a better option to remortgaging
