IVA information for a newbie

[robert_payne123]

Sorry, I forgot to consider the increased mortgage payments you were talking about before. How much would that reduce what you could afford to pay per month to ?

Not entirley sure as I have not yet looked at changing mortgage, was waiting until April which would be three months before. I am on a rate at the moment paying back 549 each month interest rate of 5.09%. I am unlikley to get such a good rate at the moment. I will probably be likley to be paying around an extra £50-£100 each month?

Thanks

Robert

[pbeck]

You are certain to get nowhere near your current rate when this deal ends, so your mortgage payments will increase. Try to find out from your mortgage company what the likely level of payments will be once you're on the "normal" rate.

If the increase will be £100 per month rather than £50 then I am minded to recommend the IVA route as a DMP would take over 7 years at £380 per month eve n if there were no fees involved and all creditors agreed to stop accruing interest.

[robert_payne123]

You are certain to get nowhere near your current rate when this deal ends, so your mortgage payments will increase. Try to find out from your mortgage company what the likely level of payments will be once you're on the "normal" rate.

If the increase will be £100 per month rather than £50 then I am minded to recommend the IVA route as a DMP would take over 7 years at £380 per month eve n if there were no fees involved and all creditors agreed to stop accruing interest.

I have just called my lender to check what the new level would be on the loan per month, and at todays rate. The rate is currently 7.69% which would mean that my monthly repayment will go up to £681 per month which is an increase of £132 per month. That would leave 348 per month, If I am working that out correctly.

I guess that would change things significantly. It all seems a bit much at the moment!

Thanks for the advice.

Rob

[abc]

Have a chat with an independant financial advisor, I think that rate is expensive, subject to your current mortgage you should be able to remortgage when your current deal ends perhaps for somewhere between your current rate and the rate of 7.69!

[robert_payne123]

Have a chat with an independant financial advisor, I think that rate is expensive, subject to your current mortgage you should be able to remortgage when your current deal ends perhaps for somewhere between your current rate and the rate of 7.69!

Is that expensive even with an IVA in place. I am led to believe that mortgage lenders do not look favorabley on people with IVAs and don't offer such good rates as normal customers?

I suppose I could hold ioff and tread debt water until I can get a fixed rate mortgage for a five year period and then consider the IVA or debt management?

Or is that just asking for trouble?

[pbeck]

I think you're going to have to go with the IVA option, at £348 per month a DMP will take 8 years which is getting too long ,and then only if interest is stopped and there are no fees. Don't bust a gut trying to get the best mortgage deal, don't forget that fixed rate mortgage deals come with arrangement fees that counteract the headline rate even if these fees are simply added on to the debt.

Also, if you do get a better deal, that just means making higher IVA payments, so you'd be working for the creditors in trying to improve your mortgage deal.

[robert_payne123]

Out of interest who decides what are fair expenses under either an IVA or DMP? I guess that this is a matter for mediation, but are there any guidelines?

Thanks

Robert

[aguise]

Hi there robert there are the cccs guidlines, but really you should put it down as it is, everyones expenditure varies. Your company will advise if they think it too high or too low.

Ang

[robert_payne123]

Cheers Ang,

I was only worried that things would sound to high?

Also would they take into account my other half's money/income?

We will be married in August 2008!!

Thanks

Rob

[aguise]

Not sure as to how dmp's work on that but with an iva they would require your other halfs income mainly to ensure that they are paying their fair share to the household expenses. So if you earn 60% of the household income and they earn 40% then they would expect her to pay 40% of living costs. Again when talking to a company ask them outright so you know how you stand on this.If you have queries keep writing them down so you dont forget to ask, I quite often forget everything I want to ask and remember as I put the phone down.

Ang

[robert_payne123]

Does that count for things that are only in my name, like TV license, the mortgage etc or is it all household bills??

Any advice appreciated.

Thanks

Rob

[aguise]

Hi Rob
It would be for all household living expenditure, food, utilities. Wait for other answers though as I am not a technical expert, just another who has been in debt but heading towards freedom from it.

Ang

[robert_payne123]

Cheers Ang.

Just a quick one though. Did you go via the IVA route? If so how have you found it? I am worried about losing all I have invested in my house etc, I would just like a perspective from someone who is actually there doing it!

Thanks

Rob

[pbeck]

Rob

The whole point of an IVA is that you get to keep your house because you remortgage it (if necessary) in the last year.

Also, the household income and expenses will be aggregated, it doesn't matter in whose name individual bills are, the whole lot will be taken together and divided in the proportion of the partners' relative incomes.

[robert_payne123]

Thank you Mr Beck.

Sorry If I come across a bit daft with all this but, the whole concept is new to me and I am a touch worried about it all!

Thanks

Rob