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Hello all.

In July my fixed 2yr interest only mortgage is up and I have to start looking at another one in March.( No equity in the house by the way).

Me and my wifes names are on the mortgage.

Thing is, I am thinking of having an IVA because I have £27000 worth of debt that needs to go because its crippling me.

So;

1. Do I wait until I have got another mortgage before going for an IVA.(hopefully I can survive till then).

OR

2. Go ahead and have an IVA now, trouble is, a mortgage advisor we know has told us that if we did we couldnt get another mortgage, so this would mean lots of trouble for us.

What do we do?

Thanks.

Welcome to the Forum.

You are not alone with this quandry.

It is worth looking around to see what a re-mortgage or what your existing lender will charge for an ongoing mortgage. It is getting a little easier but you need to seek proper professional advice. Visit www.iva.com for recomendations.

Would need to know your exact household income and expenditure and the mix of your debts and individual amounts.

If you have no equity in the property, you will rather be stuck with a new product from your existing lender - some of which are offering very good deals at the moment.

Given that you will be applying for the mortgage in March, which is not too far around the corner, it might be sensible to make enquiries of your lender now to see what is available, or likely to be available. You could also ask them what their policy is to lending to existing customers who are in IVAs, as they will have to be notified of the IVA whether it is proposed prior to or following your re-mortgage.

As an IVA would probably take a couple of months to put together, it would do no harm to seek advice as to this, and other debt solution options, at an early stage - just so that you are well prepared for when the time is right.

Hi, Gripper
When you say your mortgage is "up" in March don't you just mean that the fixed interest arrangement ceases? In that case you simply revert to the mortgage lender's standard variable rate. If so, why do you have to look for another mortgage? - most SVRs now are little different from fixed rates and are not expected to change in the short term. As your mortgage will not be included in an IVA it shouldn't affect your decision.

Can I just say that at the moment we pay £462.04 per month and my wife says she has been in touch with our current mortgage provider and they cannot do us as good a deal as they do us now and the payments will go up to approximately £630.

Plus she seems to think that they will only give us a re-payment mortgage rather than the fixed rate we have at the moment.

That is a big hike. Need to seek independant advice. Also is your existing mortgage interest only or a repayment one?

Thanks for the reply.

My existing mortgage is interest payments only.

As David says, seek advice from a mortgage expert. Although the price hike you quote is high, it will be costed into an IVA proposal so, as long as you can meet the repayments and pay an acceptable amount into an IVA, it needn't prevent you proceeding down the IVA avenue.

Good luck!

So do I need to tell any mortgage company we wish to borrow from, that I wish to have an IVA?

What would be the likely outcome of this? Would I still be viable to get a mortgage, because I dont believe that my wife earns enough to sign up for a mortgage on her own?

Thank you

I personally would explore the remortgage option before you disclose to them that you are thinking of applying for an IVA - but of course timing is an issue here - I would at least be paying some pro-rata payments to your unsecured creditors in the meantime.

Reverting to your lender's standard variable rate, or some other deal with them, would seem to be your only option to deal with the mortgage side - and as this provides the roof over your head you must deal with this as a priority - but advice from a suitably qualified financial advisor is required.

gripper

Quite a varied bit of advice given thus far, Melanie is corect in that if there is little or no equity in your property your options appear to be another product from your existing lender.

This you say you have attempted but with no success but contrary to your thoughts your lender should not have a problem lending on an interest only basis if they are also willing to lend on a repayment basis.

With regard to getting a mortgage in the future if you have an IVA it should not be an impossibility although your case/application at that time would be looked at and based on your own personal criteria at that particular time.

You have a duty of disclosure of information when applying for mortgage funding so if you have an IVA then that needs to be disclosed, although if you are not in an IVA then that would be revealed via a credit search and your various credit agreements would be discussed by your broker and they would seek clarification from you both on what your aims are and advise accordingly. Hope this helps. Tony

Thanks for the help.

We will ask a mortgage advisor for help with the mortgage and then see see if Melanie can help us as we have filled out the form that she has provided online for the IVA.

Obviously then I will need to inform any mortgage company of my intentions to get an IVA and just hope that they will still offer me a mortgage or im out of a house and it will almost certainly hit the fan then.....I`m confused to be honest.

I am sure that your mortgage company will help you to find a product that is affordable, so do let us know how you get on with this.

If your mortgage is interest only, what do you have in hand to pay it off at the end of the term? Might be as well to switch to a repayment one.

The trouble with switching to a repayment mortgage is the amount that the repayments will go up - the poster is going to struggle with the payments going up as it is. I can't see that a repayment one is going to help at the moment.