Hi. We are half a year into an IVA and now wish to move to a different area. We have a mortgage with Halifax, who we approached about selling our house and buying another elsewhere. They told us that this can only be done by satisfying our current mortgage and then making a fresh application for the new house. Clearly, we wouldn't pass credit scoring for this. Does anyone know a way around this or, if a bad credit mortgage lender is the only option, whether anyone has experiences of such lenders?
Many thanks...
It would be difficult to source any lending while in an IVA so if you sell it would be very difficult to get another mortgage. It may be an option to rent out your current property and rent in the new area provided the rent covers the mortgage. You can then sell in the future post IVA when your credit file has cleared up.
Have a talk with your IP who could advise further.
We had thought of that option but would like really to keep on the mortgage ladder. There is a surprising lack of information on the internet about bad-credit mortgage lenders!
Thanks again for your help,
Paul
There are very few adverse lenders left in the market although this should change over time. However, renting out your current property keeps you on the mortgage ladder and would make a new mortgage in the future so much easier to source.
I did not mean sell the property and rent in a new area, but to rent it out to cover the mortgage.
Hi,
I too am thinking of entering into an IVA and I also am with Halifax as my mortgage lender.
I asked if I wanted to move during an IVA, I was advised by the debt management company (debt free direct) that providing I were to move and not take out additional borrowing, this would normally not be an issue.....can anyone else confirm ?
Last edited by terminator on Mon Jan 17, 2011 4:45 pm, edited 1 time in total.
It would not be an issue for the IP but would be for the lender. In the past it was easier to move or 'port' mortgages but in the current climate it is very difficult to get any finance particularly if you do not have a perfect credit history.
The trouble with Halifax is that they won't 'port' our mortgage - we were told by a mortgage advisor that we would have to make a fresh application for the mortgage on the house we are moving to. This is despite the new house being worth much less and us being in positive equity. The IVA would, the advisor told us, mean any application would be immediately declined. Strange and frustrating situation - we want to borrow less, after all!
So I am guessing the only option would be to go with a SubPrime lender (I think that's what they are called) who would lend at a higher rate than traditional lenders (would these still be with high street lenders but under a different guise) ?
Anyone now of any as example ?
I doubt you would be able to afford sub prime rates in an iva as it would be significantly more expensive than a regular mortgage. Have you also thought about how you would fund the costs of a move? Creditors would also need to approve the move as technically much of the equity in your property is actually theirs - so would this be protected for them rather than used as a deposit on the new place?
Renting out and renting in as suggested by Michael is definately worth considering, but do bear in mind that you will need the mortgagee's permission and they could put you on a higher mortgage rate if they deem this to now be an investment mortgage. You also take the risk that you could lose your tenant and this could throw the IVA into jeopardy unless you found a replacement quickly.
My dad rents a few properties and always works on the assumption that you should cover costs in nine months of the year max then you can afford to cover the voids.
