IVA and mortgage. Need to move house.

Nocashatol_2

I have recently entered into an IVA and while this is difficult, I am feeling much better and hopeful about the future and long term prospects.



However I have been offered a new job in another part of the country, this will require that I relocate, but it is a much more stable job and for me, a much better one with more prospects and future.



The problem is I have a house, and my present mortgage lender will not allow me to buy another property as their policy is not to open new mortgages to someone in an IVA.



This leaves me with a few obvious options, I can rent my house out and rent at the other end, however the lender will charge me extra to let and I will not be able to charge enough for rent to cover the mortgage repayment, add to this I will have to pay rent for a similar sized house and this is far too expensive to consider.

Secondly I could sell my property and rent at the other end. this will again cost me as due to the market I'm in negative equity and will have to make up the difference, I cannot afford this and am reticent to sell as the house is my only remaining asset, I will be throwing my last chance away.

Thirdly I could give up the new job and carry on here, short term this is the cheapest option however if I am made redundant (a definite possibility with my present company) I will lose the house anyway, so this is not a viable long term option either.



Is it possible to take out a new mortgage when in an IVA? If I could do this then the situation would be much easier, if it is possible how would I go about it?



If anyone could answer these questions I would be very grateful, myIVA brokers were less than useless when I asked them!


Thanks


Paul

FoggyBrain_2

Hi. I am afraid you have more chance of hitting the lottery jackpot than getting a mortgage in an IVA! How far into your IVA are you ? If you rent out and rent the other end your IP might (might!) accommodate the extra expense in your allowances. You can but ask.

Nocashatol_2

Unfortunately my IVA only started in July, and they were little help when I posed them this question.

I appreciate that I'm in debt and I need to repay what I owe but my employer has already had me on the redundancy list and only an 11th hour managerial change saved my job that time, the company is not secure and the new job will allow a much more stable foundation to ensure better compliance to the repayment plan.

I note there are advisors advertised on the internet who cater for mortgages for people under an IVA, does anyone have any knowledge or experience of this route? I accept they will charge more for their lending but I'd rather my family had a house of their own instead of paying rent.

Thanks

Foxy-Stoat_3

For a minute forget about your IVA, if you had an excellant credit record what would you do?

1. Sell it and buy another house.
2. Sell it and rent somewhere else.
3. Rent it to a family member/close friend and keep the mortgage going and rent somewhere else providing the rent covers the mortgage until the market picks up and sell it.
4. Change to a buy to let mortgage and rent another place until the market picks up and sell it.

1. Your in neg equity now so you will need a deposit say 10-20% for the new place and clearing the shortfall when you sell.
2. Your in neg equity now so there will be a shortfall - maybe a loan could cover it? But you can get into another rented house straight away.
3. Possible problems in the future but short term could be a plan, issues with the mortgage should something go wrong, but as long as they are getting paid every month then why would they ask quesions?
4. You will need at least 20% equity for a buy to let.

The fact that you are in neg equity now and no way of getting credit to cover the shortfall and no way of saving for a deposit then selling it now will not be much of a financial option. If you where to sell and close the mortgage then you will not be able to get a mortgage again until at least a year after the IVA finishes and you will need at least 20% cash deposit.

Being on an IVA only means that most or all of the doors are closed to you, also when you come to the end of the IVA with neg or no equity then you may have to extend the IVA if there was a clause in your agreement about any equity you may of had in the last year.

Having a mortgage now your in a pretty good position as long as you keep paying it!

Good luck