Getting a fixed new rate (not remortgage)

[drowning-mummy]

Hi,
I called Mortgage Express a few minutes ago and asked about getting a new fixed rate for 5 years (we are at the very start of our IVA application). They said that our current deal ends in Sep (we thought it was Dec!). I asked if we could set up a new deal today and they said to call back at the end of August and they would do it then. They couldnt see any reason why we couldnt have a similar deal to the one we have now (5.71%) for the next 5 years........
Sounds great but heres the catch. Hopefully by then we should be in an IVA. So what will happen then? Will they then say get lost? Seems daft that if they have not been directly affected by the IVA, that they should penelise us. I'm no expert, but if I worked in banking I would know that people in an IVA have their monthly expenditure set out to the penny, therefore I would offer a set deal for X amount of years as I would to my other customers. To not offer this and to hike up the interest is just asking for trouble. I'm not saying that they are going to do this, its just that I've heard so much negativity regarding mortgage lenders and IVAs lately that this is what I am presuming. Am I correct?

[MelanieGiles]

You really do need to sort this out before proposing the IVA - and the best thing now is to tell them what is going to happen and whether their rate will change. At worst ask them what their standard variable rate is now, so this can be factored into your IVA payments.

[Andrew Graveson]

I've spoken to a number of mortgage lender's representatives about the subject initially raised (i.e. the work conducted by an IP ensuring that someone in an IVA is in a great position to reliably pay their mortgage on time each month). Another point is that for many people entrance into an IVA is highly motivated by a desire to keep the family home; this creates a stronger than average desire to make mortgage payments on time every month.

So far no takers within the mortgage industry but perhaps at some point a lender will realise that this presents a great opportunity that hasn't been tapped by other lenders.

[drowning-mummy]

So if I call them now, should I say that we are applying for an IVA? Will they just say, call back when the IVA is up and running? I agree that it needs to be sorted now as we really dont want to go onto an interest only mortgage.

[drowning-mummy]

I just had a thought.......
We are in the middle of June now, and I have just sent my paperwork to Melanies team. Our IVA wont start until I return to work in September. So we are possibly looking at a creditors meeting for about 6-8 weeks (is that right?), well that would be early to mid August, so would it be best to try and hold out for my rate until then (when we are not in an IVA)and then have it in place for the creditors meeting, or would that be frowned upon?

[Emily]

Lenders are now eyeballing applications for any form of Homeloan or remortgage and the rates been offered.

The Brokers that served the subprime market would be your best bet with Euro/dollars from foriegn Banks underwriting loans. But they are on the biggest retreat since Nepolean's defeated army. You might have heard that Brokers are complaining to the FSA about Lenders not giving them sweet deals...that leaves the big 5 Banks making direct decisons on Home loans. For right or wrong IVAs are the credentials lenders do not look favourably on whatever the pitch might be. If you have taken an IVA stance - good on you as your debts will be cleared - BUT you are legally insolvent. You need top tell your lender at the onset of any deal.All information must be disclosed

An IPs vouch for a client's ability to pay in the eyes of a lender counts for a big fat zero.Any scheme to give IVA takers the same kind of rate is NOW a distant mirage. The idea is favoured by subprime brokers - but who is underwriting the loans - the likes of US investments Banks losing billions like Lehman Brothers etc.

An IVA comes with some inconviences but the reward is DEBT free.

[Adam Davies]

Hi
You will need to factor in a mortgage rise into your IVA proposal just in case you are unable to remortgage for a good fixed rate amount.
If you have a 20%+ equity in your property then you may get a good rate,however as you will have only just started your IVA you may well find it difficult to obtain a mortgage.
Seek advice on this matter from your IP
Regards

[drowning-mummy]

Thanks Andy and Emily,
Please forgive me as we are still new to this and were first time buyers on a 3 year fixed rate.
I didnt think that by getting another fixed rate with the same lender would be remortgaging. Is it? We are not looking to move or borrow more money or indeed switch lenders, we are staying with Mortgage Express and rather than having the uncertainty of a standard variable rate we wanted something in place that would make our payments every month the same for 5 years.
So will I not be allowed to put this in place just before the creditors meeting? And is this still remortgaging?

[Adam Davies]

Hi
Are mortgage express the broker or actual lender ?
You are correct in that taking a new mortgage product with an existing LENDER would not be classed as a remortgage.
Regards

[drowning-mummy]

Hi Andy,
Mortgage Express are the lender. We just would like a new fixed rate as their SVR at the moment is something like 7.2%!!!!! That would cause the IVA to fail before it even starts as we have worked out prelim payments of £290pm, so the extra mortgage money would all but wipe that out. Any ideas what we should do? Thanks for looking at this thread by the way.

[MelanieGiles]

You will really need to lay your cards on the table with the mortgage company now, as if they are only able to offer you the variable rate this may leave you with no disposable income with which to fund an IVA.

[drowning-mummy]

Yes I agree, after much thought I will call them tomorrow and explain the situation, that way if there is no disposable income then we will have to look at BR. We need to have a spreadsheet in place now which gives an almost accurate outlay of I&E for it to move forward and not a last minute attempt at one as that will most certainly waste a lot of peoples time. Gosh, I'm nervous! I dont want to sound like a spoilt child but........its so unfair that people in IVAs get unfavourable deals! If I ruled the world......

[MelanieGiles]

I completely agree with you. One day, one of the banks are going to wake up to the fact that people in IVAs represent a very viable customer, given that they are operating under close supervision with regard to their finances, and probably did an IVA in the first place to protect their home - so the last thing they are going to do is not pay the mortgage! Just wish I had a few million to hand to try it myself!

[drowning-mummy]

Well I called this morning and it was a waste of time! They are not prepared to look at our mortgage until the first week in August, but did say that we should hopefully still get a decent fixed rate as we have been good customers, so fingers crossed. XXXXXXX