www.iva.co.uk

I come out of an IVA in Sep 09 and would like to try and get on the porperty ladder. I will have about £10,000.00 available as a deposit. Are there still any lenders out there who will offer a mortgage? I would look to borrow about £120,000.00. I have a good full-time job with the Army and don't leave fro another 6 years. I currently earn £35,000.00 per year. Could I also ofset my gratuity agaisnt a mortgage?

Hello 65l and welcome to the forum,

As things stand I am not aware of a lender who would lend to someone who had recently completed an IVA without a 20% deposit (and funds for other costs).

This may have changed by the time you are looking to get on the ladder.

You may also find that property prices have declined by the time you wish to purchase in which case the deposit equation could be different.

Offset mortgages are currently available in the wider mortgage market though whether this would be appropriate for you at the time is something I'd suggest you take advice upon.

Are you still serving in the Army and yet to receive your gratuity package? If so, is the suggestion that you effectively hold your gratuity entitlement as additional security for your mortgage?

Was this "gratuity" entitlement disclosed at the time you took out your IVA or did it not need to be? Melanie the Army expert?

Not sure that the gratuity would be relevant given that there are six year's service remaining and 65l is already several years through the IVA?

I was assuming that the "gratuity" kicks in fairly soon after the IVA finishes!

Gratuity payments are due to members of HMF upon completion of a certain period of service - usually 22 years. It is possible to borrow against the eventual gratuity, up to a certain level, so long as the reason is a good one - such as to fund the deposit on a property. If this happens, HMF effectively take a charge over the property to the extent of the loan.

The gratuity would not have required disclosure in the IVA, given that the agreement would have concluded before the entitlement arose, however I think that the poster is enquiring whether they could borrow on the back of the payment or use it as additional security for borrowings. My view is not, as the gratuity is not bound to be eventually payable - for instance a dishonourable discharge or early departure would affect the amount payable.

Conscious I may be making the wrong assumptions her - so let's wait for 651 to clarify his/her query.

That is an interesting point David.

Through affiliation we work with a significant number of serving police officers who also receive gratuity sums upon the completion of their service.

What would your view be about a police officer entering into an IVA 6 years prior to the end of their service, their benefiting from some debt being written off after 5 years, and then benefiting from receipt of a substantial gratuity a year later.?

Is this a matter that an IP would feel obliged to disclose to the creditors prior to their voting on the arrangement?

Very interesting point and I have not come accross these type of "capital" sums. I doubt whether it is a windfall but it maybe part of their contract of employment. As such I think it should be mentioned in any proposal as it is a "contingent asset" - see what Melanie thinks?

I specifically exclude these from being captured as windfalls in my proposals for serving members of HMF. Soldiers (and sailors and airman for that matter) receive very high training for specific roles, most of which are largely irrelevant in civvy street - not too much demand for tank commanders or electronic warfare operators outside the forces. They receive cheap, subsidised housing (very poor in my personal experience!), full medical cover, and many other subsidies depending on the theatre of operation. When a soldier, who may have joined up at 18 leaves at age 40, they are often ill prepared for civilian life, need to find housing for themselves and their family, and start a new career. Little help is afforded by HMF towards this, and the gratuity money therefore is much needed by way of resettlement.

To a certain extent this also affects serving police offers, but less so as they are probably more attuned to the civilian world, and these days police housing is a thing of the past. So I would not exclude necessarily in those circumstances.

At the end of the day, as with all things in an IVA proposal, you start with a blank piece of paper and so long as your reasoning is clearly disclosed to creditors, anything can form part of the contract within reason.

Good point - but as you say it does need to be disclosed - in my opinion - I doubt whether creditors would insist that this has to come into the arrangement in the HMF scenario you have enunciated