IVA - increase in income query & shared ownership mortgage

HB2000

I am currently in an IVA with Payplan, approved 3 months ago, and all going well so far! Recently I went for a promotion at work, and got it, and now earn an extra £340/month. I spoke to my case officer who confirmed that they would look at my income at my annual review.

My question is this, I have a shared ownership property (50% mortgage, 50% rent), and if my mortgage company would lend me more money based on my additional income, would my IVA allow me to increase my mortgage payments? I am quite keen to own 100% of my property as soon as I can.

Thanks for any advice you can offer!

FoggyBrain_2

Hi. Chances of you being able to extend your mortgage whilst in the IVA are slim to nothing, I'm afraid. Apart from which, an increased share in the property would lead to increased equity being possible at the end of the IVA, which the creditors might want a bite of!

HB2000

FoggyBrain wrote: »

Hi. Chances of you being able to extend your mortgage whilst in the IVA are slim to nothing, I'm afraid. Apart from which, an increased share in the property would lead to increased equity being possible at the end of the IVA, which the creditors might want a bite of!

Hi FoggyBrain, thanks for your reply.

Would I not be able to extend my mortgage because the mortgage company would refuse me, or because Payplan would not agree?

DrSqueeze

The IVA is focussed on reducing your debts, so existing creditors would have a claim on any surplus income. They would expect you to focus on reducing your debts to them, not increasing them to your mortgage lender.

At the annual review, your income and expenses will be checked and if there's an increase in your "surplus" or spare cash, the IVA Supervisor would expect you to use part of it to increase your monthly payments. I believe up to 50% is a fairly typical increase (i.e. you keep 50% of the extra income and contribute the other 50% to your IVA).

* This is just an example, you need to check the wording of your IVA to see what would happen in your own circumstances *

DrSqueeze

HB2000 wrote: »

Would I not be able to extend my mortgage because the mortgage company would refuse me, or because Payplan would not agree?

Possibly both. If you're in an IVA it's probably because you had difficulty meeting your debt repayments. Lenders are naturally wary in such circumstances. There will probably be a clause in your IVA about not being allowed to take any further credit while it's in force.

FoggyBrain_2

HB2000 wrote: »

Hi FoggyBrain, thanks for your reply.

Would I not be able to extend my mortgage because the mortgage company would refuse me, or because Payplan would not agree?

Mortgage companies, these days, are getting picky about lending to those with perfect credit histories. Those of us with IVA's or the like don't stand a chance I'm afraid.

HB2000

Thanks for both of your replies FoggyBrain and Dr Squeeze, I did think I was being a little optimistic! It would be nice to own 100% of my property, but I guess I'll have to wait until my IVA finishes.