Re Mortgage advice please.

Ginger27_2

Hi all!

Im new here and in need of advice. Currently we have been having some financial difficulty and considered an IVA for our debts.The problem is we could be turned down for an IVA because since house prices have rocketed up here we have equity in our property which is enough to pay off our debts if we re mortgaged. Only problem being is that although I know we could afford the re payments if we re mortgaged because the amount would be the same as we would be expected to pay out into an IVA will our mortgage provider let us re mortgage? I know when we took out our mortgage out incomes were higher than they are now and we took out a mortgage for close to the maximum they would allow so it seems unlikely that now on a lower income they would allow us to have a larger mortgage or is it calculated differently when you re mortgage? If we cant remortgage and we cant get an IVA because of equity an our property that we cant access to clear our debts I dont know what else we can do
Thanks in advance, Tracy

silvercar

Although on the same lending criteria you would have a problem, some lenders have relaxed their criteria in recent years, some also look at affordability. You would have a better chance if there was now some equity in the property.

You need to post details of your salary, house value and mortgage amount.

It may also depend on your credit rating.

I thought IVAs only required a remortgage to release equity in the final year.

Ginger27_2

Hi,
Thanks for your reply. We got advised that if there was a sizable amount of equity in your property at the start of an IVA they could refuse your IVA and tell you to re mortgage instead. They can also take equity after the first year. Our details are as follows-

Our current mortgage is for 70k
Our house value has gone up to 105k
Our personal debt outside of the mortgage totals to 35k
Our income is only 16k but we do have additional payments of working families tax credit, child benefit etc which totals to approx 8640k per year.
child maintenance of 5096k per year.
We are a family of 2 adults, 2 school age teenage children and 1 child of age 5yrs.
We currently have not defaulted on any of our payments for loans credits cards etc and alsways pay the mortgage on time. Our credit rating is good though we are coming to a point were lenders will not lend us more due to the amount we are already paying out. We are currently paying out close to £900 per month in personal debt on top of our mortgage :eek: which realistically we cannot keep up for much longer hence looking into solutions. If we were to re mortgage to pay out debts I have calculated that instead of paying £900 per month on top of our mortgage we could be paying out half that amount with the higher mortgage payments which we could manage and not struggle.
How would I approach the re mortgage with our provider and would it make a difference to them if we told them it was to pay personal debt? Our mortgage is with Northern Rock btw.
Thanks, Tracy