Changing to repayment

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nickyg

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Post by nickyg » Fri Sep 24, 2010 8:57 pm
Hi All
Just about to go into an IVA, but I have a worry about my mortgage... I currently have an interest only mortgage, with no way of paying it off at the end of term. My worry is that if I enter into this IVA, I'll not be able to pay off my mortgage at 65. I'm currently 47, so when the IVA ends I'l only have about 11 years left of mortgageable life which will make repayments on a repayment mortgage impossible. So, can I convert my mortgage to a repayment now or will an allowance be made for this? Obviously I don't want to be homeless at 65!
Another question is how are allowances made for rate increases? I.e. if I'm paying £800 now for a mortgage and go into an IVA and then the rates go up and my mortgage increases to £1200 6 months later, what happens?
Thanks!
Nick
 
 

kallis3

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Post by kallis3 » Sat Sep 25, 2010 8:42 am
Hi Nicky,

Have you already started the route towards your IVA or are you just thinking about it?

If it's the former then I can't see the IP being happy at you if you change to a repayment as there will be less DI for the creditors.

If the latter, then I would look at the figures if you change to see if an IVA is still an option before you change.

If the payments go up then you would have to go back to your IP to see about lowering your payments.

If you've not approached anyone then I suggest visiting www.iva.com for a list of companies and reviews. Give one or two a ring for free and impartial advice.
Sharing from experiences of dealing with debt
The greatness of a man is not in how much wealth he acquires, but in his integrity and his ability to affect those around him positively.
Bob Marley.
http://kallis3.blogs.iva.co.uk
 
 

plasticdaft

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Post by plasticdaft » Sat Sep 25, 2010 9:36 am
How did you plan to pay off the interest only mortgage out in the 1st place? As Jan says I dont see creditors allowing you to switch to repayment as this will use up disposable income that could be going to creditors.

Paul
Discharged today the 8th feb 2012. View is much brighter now.
Continuing to rebuild our credit worthiness.
 
 

nickyg

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Post by nickyg » Sat Sep 25, 2010 9:47 am
The mortgage was originally an endowement mortgage. I cashed in the policies a few years ago to try to get my head above water. The intention was to convert to a repayment mortgage when things were better but they've go worse :-(. I'm now looking at an IVA, but at 47, when its over I'll be 54 and there's no way I'd be able to afford to convert then (even if the mortgage company let me) so I'd effectively lose the house at 65. I know its my own fault, but its so depressing!
 
 

Shining

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Post by Shining » Sat Sep 25, 2010 11:04 am
I'm in pretty much the same situation Nicky and often wonder what I'm going to do but I guess I'm avoiding thinking about it unlike you. x
IVA final payment left the bank on the 26th January 2013...looking forward to a debt free future.
 
 

kallis3

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Post by kallis3 » Sat Sep 25, 2010 11:27 am
I would certainly speak to an expert about your options.

If you could pay a good dividend and maintain a repayment mortgage then it might be possible, but you do need to take some advice.
Sharing from experiences of dealing with debt
The greatness of a man is not in how much wealth he acquires, but in his integrity and his ability to affect those around him positively.
Bob Marley.
http://kallis3.blogs.iva.co.uk
 
 

RHB

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Post by RHB » Sat Sep 25, 2010 12:21 pm
II years should be enough to convert to repayment because it's the interest that is the bulk of your debt. I switched to repayment with 14 years left & payments are manageable but I suppose it depends in how much your mortgage is.
 
 

Johndylan

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Post by Johndylan » Sat Nov 10, 2012 11:11 pm
Hi nickyg, just come across this post. What did you do and what was the outcome?. Thanks
 
 

Niobe

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Post by Niobe » Sun Nov 11, 2012 7:51 am
Hopefully nickyg will come back but as the thread is so old and he/she hasn't posted since I doubt they will.
 
 

MelanieGiles

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Post by MelanieGiles » Mon Nov 12, 2012 12:38 am
I would always recommend a repayment mortgage to anyone seeking to enter into an IVA - as the days of the interest only mortgage are limited.
Regards, Melanie Giles, Insolvency Practitioner
 
 

debt tired

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Post by debt tired » Sat Dec 01, 2012 10:42 pm
Hi Johndylan, I asked the same thing recently (a couple of weeks back) in New Questions. All my enquiries were answered - a special thank you to Mel. Probably worth reading through if you haven't already. Look under user name carly.d (long story!)
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