Thanks for that point Melanie. I hadnt actually thought about that, especially when I've been worrying about having to extend the IVA for a further year should we not be able to release equity in year 5, which I doubt we will as we owe too much on our mortgage. Cannot see house prices increaseing greatly over the coming years.
On a different note I have contacted our IP again and asked if its possible to renew the fixed rate when we have our first annual review in May so that we can keep some of the savings until that time. Just waiting to hear back on that.
Hi
I would disagree with the advice on this post. If you are managing ok with your payments and do not need the extra 50% in the reduction of mortgage payments to get by, I would change to your mortgage to repayment. If you still have 4-5 years to go on your IVA this could be almpst £30k paid off you mortgage (and therefore will enventually go back to you after your IVA). If you pay extra into your IVA this money will be lost to you.
You will need to check you sums regarding the equity release clause. It is likely for most people that they cannot remortgage and hence will have an extra year IVA payments. If you are the exception and you will enough equity to enable a remortgage the extra money you paid in may be taken.
Also, if you are in negative equity (or <10k), you may be able to miss the final year payment altogether so if you are on the borderline you need to check if the extra mortgage payments would tip you over in the extra year. If so, then you need to calculate which side of the line you are better off coming down on.
Sharing from experiences of dealing with debt
The greatness of a man is not in how much wealth he acquires, but in his integrity and his ability to affect those around him positively.
Bob Marley. http://kallis3.blogs.iva.co.uk
We have just had our IVA excepted and first payment in DEC 2010. I have read our proposal back to front many times over and there is NO reference whatsoever regarding the change in mortgage payments, only overtime ect.
It just says we have a fixed mortgage ending in middle of next year.
When our fixed 5 year repayment does end then we will automatically go onto a 0.75% above base rate tracker.
I have read Melanie's posts about how things are split so when ours does change it will be very intresting to see how it works. Like i have already said on the forum i would be happy to split the difference 50/50.
I have asked loads of times what will happen but like missyp i still have not got a clear answer!!!!
Maybe im taking a bit of a risk but i cannot see intrest rates going up too fast over the next 5 years so im happy to stay with our tracker, which if you have a look on banks etc web sites they are charging loads of money for them.Anyway im not convinced we would get any deal now.
My take on the year 5 equity release is im pretty sure we will not stand any chance whatsoever of getting anymore money out of the mortgage company being in a IVA so i have alredy resigned myself in paying the extra year.
12xIVA payments will be alot less than the equity release.
Yes i do believe so Melanie,it has just been drawn up by Jackie Westerman at the CCCSVA this October.
Ive heard you mention this before about protocol and when i mentioned this on the forum everybody has said it would be up to protocol due to it being drawn up in the last month or so. Am i right?
Is it poss to have a IVA drawn up in the last few months and Not be up to protocol? Surley every proposal being drawn up now should be up to scratch?
Some IVAs are complicated and it is easier for them to be done outside the protocol.
The vast majority now though are 2010 protocol compliant.
Sharing from experiences of dealing with debt
The greatness of a man is not in how much wealth he acquires, but in his integrity and his ability to affect those around him positively.
Bob Marley. http://kallis3.blogs.iva.co.uk
Jackie is a great IP - I know her well and we often chat about IVA related technical issues. She is also part of the IVA protocol standing committee, and thus is at the heart of the decision making in this process.
Assuming that your case is protocol compliant, and I would eat my licence if it were not, you would only have to increase your payments by 50% if you benefitted from a mortgage reduction.
Thank you very much for your answer on this subject Melanine. I have not had the opportunity to speak to Jackie on this issue. But im very pleased that you regard her very highly.
Our IVA did take a bit of time to set up, and i felt some of this was because they(cccsva) were being very thorough in making sure everything was covered.
Not one creditor questioned our budget which i was pleased about!
A 50/50% split of the lower mortagage payments will help us in the future years of our IVA. And having had to look at everything in the past of what we have done financially i feel we have learned a big lesson and we will save the money incase the mortagage payments go up towards the end of our IVA.
Many thanks for your answer as i know you are also regarded very highly on this site. Thank you.
Glad to be able to help and reassure you. Do try and get a chat with Jackie if you can - nothing like getting direct advice from the horse's mouth to be frank.
Well I have just heard back from IP today and their advice is to take out a new fixed rate mortgage. (Its taken over 2 weeks to get this answer).
I was hoping to hear that we may not need to do this until May, when our first review takes place.
The IP has advised us that we should arrange a new fixed rate as soon as the existing one ends in December as the IP doesnt believe we will be able to get as good a fixed rate in May as we will in December. Not sure I am convinced on this, especially when it is well know rates will remain low for many months yet.
So tempted not to fix it until perhaps April, before our review.
Can any one advise what is the best solution in their opinion?
It's down to you. Personally I think I'd fix it now.
Whilst interest rates may remain as low as they are now, you can't guarantee it.
Sharing from experiences of dealing with debt
The greatness of a man is not in how much wealth he acquires, but in his integrity and his ability to affect those around him positively.
Bob Marley. http://kallis3.blogs.iva.co.uk
Hi Missy
None of us know what the next 4 years are going to bring re interest rates, expect they will go up, therefore a new fixed rate now at least gives you some stability over the next few years
My fixed rate finishes in Mar 2011. But as I am with Northern Rock Asset Management I have already been told I will not be offered any new mortgage deals or products and will automatically go onto their SVR which is currently 4.89%. This is not much lower than the fixed rate I am currently on which is 5.89%.
I would be quite happy continuing with a fixed rate and would gladly agree to a 5 year period as that would see me through the the end of the 60 mth IVA. AT least I would have peace of mind regarding paying a set monthly amount.
Would be interested to hear if anyone has managed to secure a new fixed rate with NRAM? As far as I have heard they will not offer any new deals.
Not sure how being in an IVA will affect their decision? When I last enquired I had not decided to enter an IVA - was hoping the reduction in monthly payments in Spring 2011 would free up enough money to allow me to pay more off my debt and get my finances straight - but this will not be the case as it was estimated my payment would only lower by about £60. So IVA it is...
