mortgage whilst in an IVA

[WISERNOW]

Hi,

I am currently renting and was wondering if anyone here has successfully applied for a mortgage whilst in an IVA or has any useful information or advice.

Thanks

[illihor]

From what I understand, there shouldn't be too much of a problem as long as the mortgage does not exceed your current rent payments and therefore reduces the IVA payment. There are companies that offer mortgages during an IVA so I don't think that side of it will be the problem.

I think as long as you can maintain the current payments and the mortgage is unlikely to impact on it at all then all should be fine.

You should discuss this in detail with your IP though before doing anything. Hope this helps.

On the way to a brighter future....

[Oliver]

Excellent reply by Illihor.

The difficulty of getting a mortgage once in an IVA is (i) will the payment be lower than or equal to your rent and (ii) where would you get the deposit for the property from (as any liquid assets should have been declared to your creditors). If you can show that (i) you will be paying no more than your rent (i.e no less money for the creditors) and (ii) that a third party is providing the money for a deposit / you are getting a 100% mortgage then you may be able to take a mortgage during the IVA.

As Illihor correctly states, you must contact your IP before you agree to do anything.




You can access Video Clips giving additional information about IVAs at:
http://www.thomascharles.com/interview_ ... an_iva.asp

If you would like more information about IVAs, other debt solutions, or just want to arrange an informal chat, please visit us at www.thomascharles.com.

Best Regards
Oliver
www.thomascharles.com

[neverending]

Hi
I obtained a mortgage about 6 months into an IVA.My mother gifted me the deposit and I asked my IP for permission.My payments were no more than my rent at the time.
I used a company called Platform[part of Brittania building society] and put in a 15% deposit[20k]
I have had no problems but my only oncern is that my equity has risen to about 60k and I have a nightmare that I will get a letter from my IP just as I am completing my IVA asking for a big chunk of this.I know that it won,t happen but it seems to good to be true!!This equity could rise to about 90k by the end of my IVA.Could I really be that lucky ??

[Oliver]

Hello Neverending.

You could find that you are asked to release some of this equity towards your creditors at the end of your IVA. Alternatively why not contact your IP now to see if it would be possible to offer a full and final payment to your creditors and finish the IVA early.





You can access Video Clips giving additional information about IVAs at:
http://www.thomascharles.com/interview_ ... an_iva.asp

If you would like more information about IVAs, other debt solutions, or just want to arrange an informal chat, please visit us at www.thomascharles.com.

Best Regards
Oliver
www.thomascharles.com

[neverending]

Hi
I may well do that but surely an IVA is legally binding on both sides so if I keep to the original proposal and return the percentage due then the fact that I purchased a property post IVA cannot count.After all a provision is made for overtime and windfalls etc but not for property acquired post IVA ??

[Oliver]

It would all depend on the terms and conditions of your individual IVA Neverending. The majority of IVA proposals now will now have a condition demanded by the creditors that states that any future equity amassed during the IVA may have to go to the creditors. The reason for this is that the creditors feel that it is only fair that a person pays them back to the best of their ability. If someone was to inherit money or even win a lump sum on the lottery the creditors believe that it is only fair that this money should go towards the money they are owed. Equity is viewed in a similar way, although this will only be required if (i) the terms and conditions state this money must go towards the IVA, and (ii) a person can reasonably release this money in regards to income and loan to value constraints. Ultimately the money is owed to the creditors and you will usually be required to pay them back to the best of your ability.

I think you should contact your IP and discuss the matter with them.



You can access Video Clips giving additional information about IVAs at:
http://www.thomascharles.com/interview_ ... an_iva.asp

If you would like more information about IVAs, other debt solutions, or just want to arrange an informal chat, please visit us at www.thomascharles.com.

Best Regards
Oliver
www.thomascharles.com

[neverending]

Hi
Yes I agree but as I was renting at the time of my IVA no condition has been written into my IVA regarding equity release.I understand the need to repay as much as possible and this relates to windfalls and inheritence plus overtime etc and this does form part of my IVA[Like most peoples if not all]
Your answer confirms that my IP cannot insist on an equity release as it was not part of my original IVA agreement.Would you agree with this ?

[illihor]

If for example you took out a mortgage post IVA and this was all agreed by the IP but the terms and conditions of the IVA were not updated to include an potential equity release could they still try and demand this?.

Assuming for example the IVA was agreed whilst renting, as my proposal does cover windfalls and lump sums but says nothing at all about equity in the future.

Would it be common practice to alter the terms of the IVA in these circumstances?

On the way to a brighter future....

[Oliver]

Without physically seeing the terms and conditions of your IVA it is impossible to say. If there is no clause then I would agree that your creditors would be unable to enforce an equity release. However, I would think that you would have to be quite lucky to have avoided a generic clause being placed into your IVA.

Fingers crossed.


You can access Video Clips giving additional information about IVAs at:
http://www.thomascharles.com/interview_ ... an_iva.asp

If you would like more information about IVAs, other debt solutions, or just want to arrange an informal chat, please visit us at www.thomascharles.com.

Best Regards
Oliver
www.thomascharles.com

[neverending]

Thanks for the reply.
I,m in two minds
I could just let the IVA run its full term or I could look into remortgaging at the end of year 4 and offer the equivelent of the final years payments [6k].However my concern is that this may "wake" my IP up and they may look closely and see that I have all this equity and they may suggest a larger slice to my creditors.
How can I be sure as to the correct road to take[for my own benefit]

[Oliver]

I'm very surprised that this point hasn't arisen and been discussed in your annual review meetings. Ultimately, you should be disclosing all material facts to your IP including the value of the property you own. If you decide to not discuss this you could risk a nasty shock in year 5 if there is an equity release clause found in your IVA terms and conditions.



You can access Video Clips giving additional information about IVAs at:
http://www.thomascharles.com/interview_ ... an_iva.asp

If you would like more information about IVAs, other debt solutions, or just want to arrange an informal chat, please visit us at www.thomascharles.com.

Best Regards
Oliver
www.thomascharles.com

[neverending]

But my IP is fully aware of my property purchase and even gave a reference. So why are THEY not raising it at the annual review?I have given them all the info asked for and am not holding anything back.Surely they [and my mortgage provider] would have raised this possibility at the time and surely they[the IP]has an obligation to advise about the possible equity release when I first sought their permission??.
I have a feeling that they cannot enforce an equity release but will be checking the small print and will advise.

[Oliver]

Best to check through the small print and consult the terms and conditions. If in doubt talk to your IP.


You can access Video Clips giving additional information about IVAs at:
http://www.thomascharles.com/interview_ ... an_iva.asp

If you would like more information about IVAs, other debt solutions, or just want to arrange an informal chat, please visit us at www.thomascharles.com.

Best Regards
Oliver
www.thomascharles.com

[neverending]

Oliver
The small print states as follows

After Acquired Assets
1] I agree any assets acquired by me during the period of the agreement will be included in the arrangement insofar as a Trustee could claim the same in Bankruptcy pursuant to section 307-308.

If I understand this point then an after acquired asset[in my case house purchase] can only form part of my IVA agreement if i am made or petitioned for bankruptcy otherwise it can not form part of my IVA as long as conduct my IVA properly.

Your thoughts please