Mortage

[Sarah]

Hi All

I was just wondering what the best route to go down would be.

I have just got a new job and I think that now with the new pay rise I may be able to afford a mortage on a small flat or something.

My question is? I am up for my annual review in June so shall I look into mortages before then so when the review comes up I can take into account my mortage outgoings (if i can get one) or have a early review now and let them know of my pay increase now and increse my monthly IVA payments.

Also does anyone know of any good mortage comapanies that are willing to help people in an IVA!

I hope all of this makes sense!

[Storm]

There are a number of mortgage lenders that will accept applicants in an IVA. Ususally they want to see you in the IVA for at least 12 months and pref 24 months. They typically don't lend over 85% so you will need to come up with a deposit of between 15-20% and of course there will be the legal fees and quite often arrangement fees with the lender.

[MelanieGiles]

This is OK, providing as Storm says you have a 10-15% deposit which must not be derived from your savings or assets ie should be from a third party. Also, you will need to ensure that the mortgage repayments do not disturb your ability to fund your IVA contributions ie they should be no more than the rent you are currently paying.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.
View my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[Sarah]

Thank you that is great I will have a look into it

[neverending]

sarah
I purchased a property after starting an IVA[only six months into it].My deposit came from my mother and my mortgage payments were no more than my rent at the time.I borrowed 85% and I think that this will be about the max for a "first" time buyer in an IVA.
Couple of points from my experience
1]Use a broker,they have access to a wide range of suitable mortgages and are bound by their regulatory body to offer best advice for you.They will know before you part with your valuation fees etc if your mortgage is likely to succeed.
2]speak to your IP before starting anything rolling as they will need to know and provide you with a reference.The rate you get will not be great but I would suggest fixing a rate that covers the remaining term of your IVA[you never know if interest rates will go silly over time,just like in the late 80s]

Finally it is unlikely that you will be able to use your extra pay rise to pay for a mortgage larger than your current rent,your creditors will I,m afraid expect your extra income to go towards larger payments for them[harsh i know].Speak with your IP and discuss
Good Luck

[jamesfalla]

Sarah

Neverending's point is really important here. Before you agree to any type of mortgage at all, you MUST discuss and agree this with your IP. You CAN NOT fund the deposit yourself and your mortgage payments MUST NOT be more than the rent you are currently paying.

Also, I know its hard but if you have received a pay rise, really your creditors should get the benefit of this, not you in the form of moving into a nicer house.

One of the clients I worked with went ahead and took a mortgage without the IPs knowledge and it caused no end of difficulties and ultimately ending up with their IVA failing.

James Falla

Expert in IVA, Bankruptcy and informal Debt Management solutions, with extensive experience of solving personal debt problems over the past 10 years. I am regularly featured on BBC News, Finance Programs and Radio.

Visit my blog at: http://jamesfalla.blogs.iva.co.uk