Variable rate mortgage

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zaza78
Posts: 36
by zaza78 » Sun Jan 17, 2010 9:31 pm
Hi there

I am just posting figures back to my IVA company for my second annual review. I have managed payments fine over the last 2 years but as always things remain very tight.

One big change this year is that my mortgage went from being a fixed rate to an variable rate and obviously I need to put my new figure down to show this. The surplus generated from this was around 188 pounds a month.

As I am doing my review how important is it to indicate my mortgage is now variable rate as opposed to fixed? My concern is that I may well be told to make higher payments and if interest rates jump the amount of surplus will not be available as it is today.

I have increased expenses in certain areas e.g. Council tax, food, travel and nursery fees as my youngest daughter will be going there this year however there is still about 70 pounds extra than normal.

Any advice on this one on how to approach?

thanks

 

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Adam Davies
Posts: 14596
by Adam Davies » Sun Jan 17, 2010 9:39 pm
Hi
Just complete the form using real upto date figures. Your payments will increase but if interest rates increase in the future your IP will be able to reduce your payments down, no problem. Your IP can reduce payments down to your original first year payments, and possibly 15% less than that, before having to go back to your creditors for agreement
Regards

 

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zaza78
Posts: 36
by zaza78 » Sun Jan 17, 2010 9:44 pm
thanks Andy for a quick reply.

Thats a point I didnt consider as I thought once payments go up they are fixed at figure and then come the next annual review that would be the benchmark but thinking about what you just said makes complete sense.

 

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MelanieGiles
Industry Expert
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by MelanieGiles » Sun Jan 17, 2010 10:31 pm
No - the IP has ultimate discretion to rule on a reduction in payments back to the original level, and as Andy says with most current IVA proposals there is a further 15% window as well, so long as this was provided for within your proposal.
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