Getting or changing a mortgage while on an IVA?

[griffingirl]

Just out of interest - as I am looking to move out of my parents house and move in with my partners, although we will be renting - i have heard you can get a mortgage when you are in an iva - how? and how does this work with regard to release of any equity etc?

[ClearDebt]

You will need to advise your IVA supervisor that your are planning this and reassure her/him that it will not impact on your ability to repay the IVA. In the unlikely event that it leaves you with more surplus income then, come your annual review, you will probably be asked to pay more into the arrangement. Don't expect your IVA payments to go down if the reverse is true.

The mortgage company will also probably want some reassurance from your IVA's supervisor that you've maintained IVA payments. They'll need to see some history here, so we'd advise leaving it at least a year from entering an IVA before trying for a mortgage (We'd be interested to hear of others' experiences here). You may also find some IVA supervisors will want a fee for this. ClearDebt wouldn't.

ClearDebt
www.cleardebt.co.uk

[neverending]

Hi
I had been in an IVA for 6 months when I succesfully applied for a mortgage

[ClearDebt]

Neverending,

If you feel you can say, which organisation gave you that mortgage? That could be really useful info for people here.

Regards

Andrew

ClearDebt
www.cleardebt.co.uk

[neverending]

Hi
No problem.I am with Platform Funding,a branch of Brittania building society.I went via a broker,a good idea as they know the process inside out.However choose one that does not charge an upfront fee.
Regards

[iva experts]

Because a Mortgage is underwritten using a different criteria than that of unsecured lending it should be relatively easy for anyone who has completed an IVA or in some instances who are in an IVA to find a Mortgage Lender.

If you are in an IVA please please please DO NOT forget to consulate your IP before you embark on trying to buy a house.



Hope this information is of use

Regards. IVA Experts

[ADAMS]

Hi, just out of intrest im currently going through the iva process, which should be set up in the next 2 weeks or so. my partner will be wanting to buy a house next year,as would i,can it be done and how if so?,many thanks to some advice.

[iva experts]

You would have to discuss this in detail with your Insolvency Practitioner and it is likely that this would only be agreed if it would not have a detrimental affect on the money you could afford to pay back to your creditors.



Hope this information is of use

Regards. IVA Experts

[neverending]

Another point to think about is where your deposit for your house will come from ? A mortgage lender will want 15% deposit and the IP will want to know where the money has come from !! catch 22,unless the deposit is a gift from a family member[mother/father etc as in my case]

[ClearDebt]

Good point about the deposit neverending - but can I suggest there is also another thorny issue about actually acquiring a property whilst one is in an IVA.

It's this, A new property is an after-acquired asset. It will need to be declared in the IVA's annual review: If there is equity (which there will be if the deposit was a gift) then creditors may want some of it. If the debtor can't stump up, questions may be asked as to how the debtor obtained the credit to take on the mortgage - and why that was not in the surplus in the first place.

In an IVA, as long as the debtor has sought and obtained the IP's permission, this is not likely to be a problem. BUT, if the IVA fails and bankruptcy follows, then this "after-acquired asset" could be exactly the kind of thing that leads to an extended period of bankruptcy or other penalties.


ClearDebt
www.cleardebt.co.uk

[Oliver]

Andrew makes a very important point here

If you go into an IVA without a property but then go ahead and buy while you are in the arrangement, you will be gaining an asset. It might well then become a discussion point at the annual review. However, more importantly, should your IVA subsequently fail for any reason, you may then be facing bankruptcy. As such, any equity in the property would be seen as fair game by the official reciever and you may end up loosing the house.

Clearly you also have to question where the deposit to buy the house will come from. It can not come from you as any such monies you have should be declared to your IP and paid into you IVA. As such, it would have to come from a 3rd party. Once the deposit is paid, you will automatically have equity in the property which then would be taken by the OR if you did end up facing bankruptcy

My advice is do not buy a new house until your IVA has finished. If you can get a third party to stump up the deposit, why not ask them if they will let you use this as a full and final settlement offer for you IVA.....

You can access Video Clips giving additional information about IVAs at:
http://www.thomascharles.com/interview_ ... an_iva.asp

If you would like more information about IVAs, other debt solutions, or just want to arrange an informal chat, please visit us at www.thomascharles.com.

Best Regards
James Falla
www.thomascharles.com

[ClearDebt]

James said "If you can get a third party to stump up the deposit, why not ask them if they will let you use this as a full and final settlement offer for you IVA....."

Great point - wish I'd thought of it. Of course this does rely on someone being generous enough to offer the cash as an outright gift, rather thn, informally or formally, taking a share of future equity in your home: But, full and final IVAs are the speediest route to becoming debt free - and you may be able to successfully offer less for a quick resolution than creditors might seek to get from a "jam tomorrow" five year IVA.

ClearDebt
www.cleardebt.co.uk

[neverending]

Guys
Are you sure that your not scare mongerring here ???
Are you saying that the IP has to declare this in the annual report,because mine does not.
Do you think that mortgage companies would lend to people in IVAs if they thought that the property would become a part in the IVA.I think not.
Yes you are correct in that if the IVA fails then your property would become part of your bankruptcy,we all understand that.
But to say that you should not purchase a property whilst in an IVA !!! Are you sure James ???
As long as your IP knows and gives permission and you continue to pay your IVA as agreed then there should be no problems.If this is not the case then IPs should be refusing permission full stop.

[mikem4491]

Sorry if this going slightly off the subject but I can't find anything similar on here.
How are you fixed for moving home whilst in an IVA?
I have the possibility of moving to take on a better job, however the area I would be moving to has higher house prices. The increase in mortgage payment would be covered by an increase in salary. Just wondered (a) How my mortgage co. are likely to treat it and (b) How my IP would view it?

[ClearDebt]

Can't see it being an issue, as long as you keep your IP in the picture and as long as you can continue to make the payments agreed at the outset of the IVA. Of course, if your IVA includes a lump-sum from equity in a property in the final year, as many do, then you need to be sure you can continue to achieve that too - so don't bite of more mortgage debt than you can chew.

You might not get a mortgage on the new property on as favourable terms as your existing loan - but you should get a mortgage and it could be on quite reasonable terms.

ClearDebt
www.cleardebt.co.uk