Just when I was starting to worry that mortgage criteria may relax with the improving economy, and that more IVA customers may have to release equity etc: Seen a lot of press today regarding the new (much tougher) mortgage lending criteria.
Anyone have any idea how that will impact IVA customers come equity release time?
Also, do these rules apply to other secured lending (eg: loans) as well?
I imagine it will only make equity release in month 54 all the more difficult than it is now (which is probably a good thing for those of us preferring a 12-Month extension).
The flip side of course is more hoops to jump through for customers finishing their IVA, and wanting a mortgage/remortgage.
I know these rules are new, and don't come into effect for another couple of days, but I would be interested to see what the experts think.
My opinions are just that: Based on my experience and being a self-employed IVA customer.
I get the impression that the new criteria are more on the affordability side of things, rather than credit history, although previous failures will have to be explained, along with reasons that it shouldn't happen again.
Many first timers in the past have been caught out by borrowing to the hilt and THEN realising that they still have to pay Council Tax, water rates, electricity et al.
I suppose one arguement in our favour is that we certainly know how to budget and are painfully aware of our outgoings!
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
Don't be so sure on the the credit history side of things.
Having recently completed my IVA in November last year my current lender of 10 years refused to lend me 85% LTV on my property to enable me to redevelop it instead of moving house.
Affordability wise I could have borrowed an extra 120k based on salary therefore a strong position.
I was asking for half that much on the same term of the mortgage (17 years) and they refused mainly due to the fact I came out of a 6 year IVA six months ago despite never missing a mortgage payment or IVA payment etc. The underwriters would only lend me 30% subject to very detailed plans, itemised costs of building work etc.
They also wanted to know what insurances I had in place along with a host of things never asked for before and this was all to do with the changes implemented by the FCA and like a lot of other lenders they are implementing early.
This would not enable me to fully realise what I wanted to do with my house (which will add value and and I am turning elsewhere.
The credit history problem is historic and not entirely due to the new regs. Indeed, some lenders would never lend to an ex-IVA'er in any event prior to thee changes and I doubt they will ever soften their attitude.
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
