implications of IVA on a re-mortgage application

[giggsy-the-mauve]

I am thinking about a IVA, however I have a joint mortgage with my brother (who is relevantly debt free), that only has a year or so left at the 'fixed' rate. What implications does a IVA have on a re-mortgage application ?

[123debtsolutions]

Hi Giggsy

Welcome to the forum.
Assuming your brother agrees to a re-mortagge or release of equity in an IVA then this will be fine.
It will only release your share of the equity and your brother will be fully protected.

If your brother doesn't agree then you will face further problems. These can be discussed further once the advisors have gathered further information on other sources of income, if any.
I would recommend seeking specialist advice in relation to your current financial circumstances if you haven't done so already.

Regards

Lee
www.123debtsolutions.co.uk

[MelanieGiles]

Hi Giggsy

I am assuming that your query more relates to the fact that you and your brother will want to re-mortgage when the fixed rate has expired in a year's time.

There will be no problem in you seeking a re-mortgage if you are in an IVA, but expect to pay half a per cent higher interest rate if your name is going on the new mortgage. Also, the proposed lender will need a reference of compliance from your IVA supervisor that your IVA is being conducted in a satisfactory manner.

As Lee has mentioned above, if you are tied to an equity release as part of the IVA terms, then you will have to get your brother's permission in order for this to be effected. It might be an idea to strip out your equity at an earlier stage - ie when you need to remortgage in one year's time, and then ensure that the increased mortgage payments are loaded towards you rather than your brother who does not need to borrow more money.

Do you have much equity in the property at present?

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

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

[MelanieGiles]

Hi gaborkiraly

Is there any equity in the property? Why was it not included in your IVA? Did the Supervisor disclose that you had an interest in a property at all?

If there is no equity, to avoid the other two owners picking up a penalty due to your IVA, you might wish to step down from the property until your IVA has concluded, or get the other two to buy out your share - which would then have to be paid over to the Supervisor as a windfall.

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

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

[MelanieGiles]

When the other two parties need to remortgage at the end of the year, you can simply transfer your interest to them. Do make sure, however, that this is done by obtaining an independent valuation of the property (the new lender will also require this), to ensure that you have no financial interest. A solicitor can help you to draw up a suitable transfer - using H M Land Registry form TR1.

Can I ask why you were party to this mortgage in the first place? Did your brother need your income to obtain the loan?

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

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