www.iva.co.uk

hi i just had my letter from northern rock about my fixed rate mortgage coming to an end and being put on vairiable rate i am really worried about this as if the intrest rate increases dont know how i will be able to pay the mortgage as at the mo on the variable rate it is lower than i was paying £455 and now will be paying £431 but what happens if the rate goes up extremely or am i just worrying for worrying sake? iva 1 year down 4 to go

This is quite common and will have to be addressed as and when rates start to rise. Hopefully incomes will begin to increase to offset any rate rises but ultimately it may require a variation to reduce your payments to the most affordable level.

Michael Peoples wrote:

This is quite common and will have to be addressed as and when rates start to rise. Hopefully incomes will begin to increase to offset any rate rises but ultimately it may require a variation to reduce your payments to the most affordable level.

I am sorry Michael but thats highly unlikely is it??

When rates start to rise many who are overstretched already will find themselves even more stretched and in my opinion we will see more people try to hand the keys back on properties they cannot afford.

Paul

I would not have thought that income rises will cover the costs of increased mortgages, with VAT going up, council tax and water rates always increasing and petrol duty continuing to go sky high - I think that even our Michael is being a bit optimistic here.

Increased mortgage costs will be a worry for everyone. They will throw people who are currently coping with their debts into insolvency, and I am sure we will see failed IVAs and DMPs leading to more bankruptcies. I can remember paying a mortgage rate of 15% in the early 1990's and I am afraid to say that we have too many people who have been persuaded to overextend themselves without budgeting for higher costs - and I can probably put myself into that category with my own mortgages!

I was personally just thinking that if my NHS pay is frozen and our child allowance is frozen and VAT is up,child tax credit is gone(for us),then any rate rise will cost us. Optimism is one thing but then there is realism.

The failed IVA bit worries me most(not personally as our mortgage isnt horrendously large),but many people have gone onto banks SVRs will find that when the rates rise they wont get a new fixed deal from anyone,maybe even their current lender so will be trapped.

I noticed that Lloydstsb no longer put customers onto their SVR at the end of their current deal(2.5% currently,and guarenteed to be no more than 2% above the BOE base rate),but instead put them onto a new homeowner variable rate(currently 3.99% but in no way guarenteed to be based on the base rate!!).

There may be trouble ahead.

Paul

This is probably the reason why the government is introducing BR Online; so there will be no need to see the judge.

Imagine the queues to see the judge, when eventually interest rates do rise, and people see the only answer to their situation as Bankruptcy.

MelanieGiles wrote:

I would not have thought that income rises will cover the costs of increased mortgages, with VAT going up, council tax and water rates always increasing and petrol duty continuing to go sky high - I think that even our Michael is being a bit optimistic here.

Increased mortgage costs will be a worry for everyone. They will throw people who are currently coping with their debts into insolvency, and I am sure we will see failed IVAs and DMPs leading to more bankruptcies. I can remember paying a mortgage rate of 15% in the early 1990's and I am afraid to say that we have too many people who have been persuaded to overextend themselves without budgeting for higher costs - and I can probably put myself into that category with my own mortgages!

I remember the worry my parents faced when interest rates rose to 15% & so I did a fixed 1q0 yr mortgage. I reckoned it would probably even itself out to the variable rate overall but at least I know what i need to pay each month!

what r the best mortgage companies to go to when on an iva as northern rock do not do fixed rate mortgages for existing customers so i was informed today and now am more worried than i was earlier when i got the letter

I doubt very much that we will see any notable rise in peoples wages. In fact, I reckon there are many instances where people will be experiencing pay cuts as companies look to cut costs, and some firms actually try to take advantage of the current economic climate and use the fact that times are hard to negotiate salary reductions...It`s actually already happening to a lot of people.

joanna_d wrote:

what r the best mortgage companies to go to when on an iva as northern rock do not do fixed rate mortgages for existing customers so i was informed today and now am more worried than i was earlier when i got the letter

You will struggle to find ANY mortgage lenders who will touch you with a 10 foot bargepole during an IVA.

Paul

I'm stuck on SVR with Mortgage Express at 4.84%.

There's nothing I can do about it until it happens, so until that time I won't worry myself with it.

I guess we are sort of lucky with lloydstsb's at no more than 2% over the base rate.Thats about the only lucky part of ever banking with TSB!!!

Paul

I dread ours going up. I'm glad it only goes up once a year and always breathe a big sigh of relief every February when the interest rate stays the same so I know I have 12 months breathing space

I do agree with Paul though that you won't find anyone to give you a new mortgage while you are in an IVA.

Hi everyone, The Mortgage rate is our biggest concern come next July/August when we come off our BOE tracker rate,, our mortgage will go up 3 fold. Other than selling the house to try & offer a full & final I dont think we will have any other options.
I cant see us managing our current IVA payments with a big hike in mortgage payments,, but we will see what the year brings,, we try not to get to dis-heartened about it.
Hope everyone is well & coping in these very difficult times,, I still pop in from time to time.

thanxs all for your replys but thanxs cath as i will be on variable rate from october 1st and as you i think im gonna be thinking not to worry until it happens (intrest rate rising) mine is 4.79% from then and a further 0.2% reduction from november as i would have had my mortgage with them for 7 years