CAN MY MORTGAGE SWITCH GO AHEAD?

[onlypassion]

Hi everyone,

Yet another question for you all!

I am in the early stages of proposing an IVA. My mortgage is a together one with Northern Rock so the unsecured element of this will be put into the IVA. I had completely forgotten about a new mortgage deal that we are due to swith to on the 31st March with them. I am unsure as to whether we can go ahead with this?

We are not borrowing any extra money whatsoever, simply switching from one product to another fixed rate. It is fixed for 5 years which is really what we need to ensure our repayments dont go up during the IVA. If we dont go onto the new deal we are basically then on variable rate which is a bit risky I feel when we are un a tight budget. If we do switch the secured mortgage payment will go down £60 a month, giving this extra for the IVA.

What Northern Rock have said though is that when switching products they will slighlty switch figures to take about £3k off the current unsecured element and convert it to secured - we are basically getting a better rate to allow them to secure as much of our mortgage as possible (95%) which is reducing the unsecured figure.

Any advice would be great!

Thanks
Andrea

[MelanieGiles]

Andrea

This seems a good deal and will bring certainty to the five year period of the IVA which is welcome. I do question Northern Rocks ability to move £3,000 from your unsecured element to the secured and suggest that you ask them to provide you with a copy of the document which gives them authority to do this.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[onlypassion]

Hi Melanie,

Well we actually signed to say they could revert this over as this meant we got a further discount on what was readily available as our mortgage as it stands is only about 92% secured. The maximum they can secure is 95%. Basically if we agreed to securing more of our outstanding balance with them, we got a cheaper rate, so we didi agree and sign this offer. It was done 3 months ago and i totally forgot about this until a letter came today advising of the date the new product will be effective from.

Thanks Melanie
Andrea

[MelanieGiles]

I assume that you are also re-mortgaging with Northern Rock? If this means that your mortgage payments reduce, and therefore all other creditors benefit, then I feel sure that this is a sensible way forward. You may struggle to get 95% with another lender.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[onlypassion]

Hi,

Yes it is with Northern Rock who loaned us the money 5 years ago, so basically we have the money off them, as you say, dont think anyone else would really touch us when comes to lending money at the minute. It is simply a case of getting the best deal possible from them. I hope this makes sense, it will be alot easier once we actually have a face to face meeting because some things I am finding really hard to explain in detail in this way but do really appreciate what advice you are giving us in these early stages.

I agree with you it makes sense all round, everyone benefits but just wanted to check it wouldn't compliacte IVA proceedings.

Thanks Melanie

Andrea