Hi - just wanted to ask what happens if we cannot get our mortgage rate fixed at the beginning of an IVA. Our mortgage is £286k so even a 1% change in rates could mean loads to us. I know you get your reviews etc. but what happens if say the mortgage repayment goes up by say £200/month? How can you calculate your monthly mortgage repayment as part of your budget on any mortgage product thats not fixed? Say the interest rates are really low at the minute - if we propose an IVA now our mortgage repayment might be £600 but if rates go up this will easily go up £100-£200/month? Surely you cannot have a review every month? Any comments/experience would be helpful.
Anyone contemplating an IVA at the moment, who is paying low-rate interest only payments must think very carefully of how they will fund increased payments as mortgage rates will inevitably rise over the next year or so.
Rises can be weaved into the IVA proposal, and the IP does have discretion to reduce payments by up to 15% at his/her own discretion, but getting a fixed rate of up to five years prior to entering into an IVA - even if the payments are higher at first - is generally a sensible thing to look into.
Thanks Melanie. How exactly would you weave the rises into the IVA proposal? I really think that nobody would touch us for a re-mortgage with the amount of debt & missed payments we currently have. Have already checked with our current provider - they said they could do it but we are in arrears at the moment so would have to clear that first (and wait 3 months)...before they could do anything...
Hi Sash, welcome to the forum, I had to remortgage prior to IVA to get myself enough disposable income to meet the HSBC hurdle rate, two years low rate will finish next year (can't recall the month off the top of my head) and when the mortgage payments rise, the IVA payments come down, your IP should factor this in I would think, mine did it all for me, still giving me a good proposal which was accepted in Feb 08.
Not sure about how you would get a remortgage being in arrears as I know nothing about mortgages Welsh Boy who posts on here sorted me out for a remortgage a genuine nice guy.
IVA final payment left the bank on the 26th January 2013...looking forward to a debt free future.
I would explain to creditors that you are in a very vulnerable position with regard to the mortgage, adn that any further reduction in your payments as a result of this ought to be agreed with the discretion of the Supervisor. This may not necessarily be accepted by creditors, but it is certainly worth a try.
