If in IVA and mortgage payments go up?

[kepler]

HI,

Just another question I forgot to ask. If I get accepted into an IVA and my current mortgage is interest only and a rate tracking the BOE base rate. what happens when my mortgage payments go up (as they are likely to as its rock bottom now).This is an ongoing mortgage rate (not fixed) and not fixed at 3.5% over BOE base rate.

I don't think I've got any chance of re-mortgaging before I go into an IVA as my credit rating now is bad due to missed payments etc and the fact that my income when I secured this loan quite a few years ago was considerably more than I earn now.

Anyone??

[MelanieGiles]

This would reduce your disposable income and your IVA payments may have to be adjusted. Everyone is in the same boat right now - and a good IP will build some flexibility into your arrangement to try and accomodate this - but my moles in the financial industry report that it may be unlikely to see interest rate rises for a couple of years - so you should seek to obtain a fixed rate when next due to remortgage if possible to buy yourself some certainty for the future.

[kepler]

The trouble with re-mortgaging will be that I cannot at the moment even before starting the process of applying for an IVA due to my already bad credit rating and this is with a mortgage company that I have had a previous excellent credit rating with even before going for an IVA, and if I were to remortgage whilst IN an IVA I am likely to get far worse mortgage rates therefore increasing my outgoings even further so what to do?

[David Mond]

When does your existing mortgage come up for renewal?

[Choice1]

Who is your mortgage with Kepler ?

You may be able to get a new deal from your current lender

[Welsh Boy]

kepler

Contact your existing lender and ask if there is a redemption penalty to exit your existing deal and if so how much and when does it end.

You need to also ask what deals they have to offer at present that you would qualify for.

When you have this information you can crunch the numbers and will know exactly how much to exit the deal (if anything) and also if by utilising another product the saving that you could potentially make by switching.

The vast majority seeking mortgage finance at present are trying to get a fixed rate, as the present rates are not likely to stay as they are indefinitely.

Trying to get this sorted before you enter your IVA may be a good idea. Tony

[plasticdaft]

Lots of different opinions on how long rates will stay down. For me my fixed rate ends in june and we go on to lloyds SVR meaning a drop in mortgage payments. By that time it will cost us nothing to move(unsure if we'd get a mortgage with anyone else anyways)so we are just going to hang on in there with lloyds until such time as the mortgage goes back up.Fingers crossed Mel is on the button and rates stay down for 12-18 months at least!!!