Mortgage and IVA

Drum_Master

HI,

I was wondering if anybody could please help me clear upa few things.

I have found myself with debt and am looking at an IVA. It is possible for a friend to help me out and settle right away after I have recieved my repayment figure. Although this will become settled, as I am aware this will still remain on my credit report for 6 years.

Prior to this I have always had very good credit and have never missed payments.

Additionally, myself and partner (not married) were looking at mortgaging on the help to buy scheme.

I would like some advice regarding whether we take the plunge into a joint mortgage before I declare an IVA as our rent amount will be equal to mortgage or whether she should take this alone. As we are planning on starting a family in the next 3-4 years I realise it may be difficult to borrow togehter when we would like to move as we cureently are looking at buying our 1 bed flat. (maybe 2 years time).

As this has a big impact on her and my potential future children I would like to know my chances of being able to borrow on our future combined salary (est 50k) once I have been 2/3 years into my IVA even though it has been paid and settled.

Also how will this effect her? I know that the IVA will only apply to myself but if the mortgage is joint will this effect anything else her side? of we seperated at any point? and if i settle at first, would the companies still want equity in this property? Even though it would be in its early stages and we would not have any money other than the initial 5/10% deposit that has been initially put down.

What would be the best options? Her taking the mortgage as sole now but maybe we will not be able to move in future due to my IVA on a joint mortgage (even though paid off) or getting the larger property now?

Your advice and guidance and anything that I have missed would grately be appreciated.

Kindest of regards

Foxy-Stoat_3

azulay111 wrote: »

HI,

I was wondering if anybody could please help me clear upa few things.

I have found myself with debt and am looking at an IVA. It is possible for a friend to help me out and settle right away after I have recieved my repayment figure. Although this will become settled, as I am aware this will still remain on my credit report for 6 years. Are you talking about offering creditors a full and final settlement or an IVA paying them for 5 years? You do not get a "repayment figure" just a monthly payment.

Prior to this I have always had very good credit and have never missed payments.

Additionally, myself and partner (not married) were looking at mortgaging on the help to buy scheme. You will not be able to take out a help to buy once you start on your IVA path, depending on your level of debt, you may not be able to apply either.

I would like some advice regarding whether we take the plunge into a joint mortgage before I declare an IVA as our rent amount will be equal to mortgage or whether she should take this alone. As we are planning on starting a family in the next 3-4 years I realise it may be difficult to borrow togehter when we would like to move as we cureently are looking at buying our 1 bed flat. (maybe 2 years time). Not sure on the implications of taking out a mortgage now then doing an IVA a short time afterwards. Assuming you need a good size deposit for a mortgage now, this should be used to pay creditors rather than securing additional debt. You will need to take into account the release of equity in year 5 if you own a property or extend the IVA another year.

As this has a big impact on her and my potential future children I would like to know my chances of being able to borrow on our future combined salary (est 50k) once I have been 2/3 years into my IVA even though it has been paid and settled. You will not be able to borrow anything while your in an IVA, your partner will be hindered also, your IVA wouldn't be paid and settled in year 2/3.

Also how will this effect her? I know that the IVA will only apply to myself but if the mortgage is joint will this effect anything else her side? of we seperated at any point? and if i settle at first, would the companies still want equity in this property? Even though it would be in its early stages and we would not have any money other than the initial 5/10% deposit that has been initially put down. If you have no equity then you may need to extend the IVA another year worse case. There will be a financial link so it would effect her.

What would be the best options? Her taking the mortgage as sole now but maybe we will not be able to move in future due to my IVA on a joint mortgage (even though paid off) or getting the larger property now? Will she be able to take out a mortgage on her own now, does she earn enough and whats your deposit level or are you hoping for a 5% help to buy deposit?

Your advice and guidance and anything that I have missed would grately be appreciated.

Kindest of regards

Tried to give you some pointers but you would be better off speaking to a broker about you and your partner's financial situation and a debt advice charity or CAB about what you hope to do. I am not sure that taking out a 95% mortgage, paying for legal and application fees is the right move if you are thinking about an IVA as you have unmanageable debt... is your debt unmanageable at the moment and have you missed any payments, or are you in the "robbing Peter to pay Paul" stage??

Drum_Master

HI Foxy-Stoat,

Thank you for your reply, I will re-add a comment under each point you have made. I have made an appointment with a financial adviser but I would just like to get my head around the situation so I can go in with a better knowledge and understanding of the process's.

I have found myself with debt and am looking at an IVA. It is possible for a friend to help me out and settle right away after I have recieved my repayment figure. Although this will become settled, as I am aware this will still remain on my credit report for 6 years. Are you talking about offering creditors a full and final settlement or an IVA paying them for 5 years? You do not get a "repayment figure" just a monthly payment.

Once my return has been worked out (i.e £250 a month predicated) this will equal around 15k. Say I offer 12k to settle, this is minus the £50 IVA monthly fee to settle the overall debt would this be accepted as a final settlement(providing my friend states the money would only be released fo rthis reason).


Prior to this I have always had very good credit and have never missed payments.

Additionally, myself and partner (not married) were looking at mortgaging on the help to buy scheme. You will not be able to take out a help to buy once you start on your IVA path, depending on your level of debt, you may not be able to apply either.

I realise I cannot do this after but before is apossibility as financially my partner can afford this alone but as we may choose to move in 2-3 years once I have repaid my debts and am financially in a good place again. I would not be accepted as technically even though the debt has been settled for this period of time I would struggle to get a mortgage even joint. This is the problem I would like to know as we could afford a slighly better place now on her salary but would not get this with her alone.


I would like some advice regarding whether we take the plunge into a joint mortgage before I declare an IVA as our rent amount will be equal to mortgage or whether she should take this alone. As we are planning on starting a family in the next 3-4 years I realise it may be difficult to borrow togehter when we would like to move as we cureently are looking at buying our 1 bed flat. (maybe 2 years time). Not sure on the implications of taking out a mortgage now then doing an IVA a short time afterwards. Assuming you need a good size deposit for a mortgage now, this should be used to pay creditors rather than securing additional debt. You will need to take into account the release of equity in year 5 if you own a property or extend the IVA another year.

My concern here is that, if the IVA has been settled as stated by my friends help, would I still need to offer year 5 equity?


As this has a big impact on her and my potential future children I would like to know my chances of being able to borrow on our future combined salary (est 50k) once I have been 2/3 years into my IVA even though it has been paid and settled. You will not be able to borrow anything while your in an IVA, your partner will be hindered also, your IVA wouldn't be paid and settled in year 2/3.

As my IVA would be settled in year one I would have been in a financially good place for the next 2/3 years but my IVA would still show for 6 years. ( I know I can make noted on credit file to help this or make the solution slightly better as things can be more personalised)


Also how will this effect her? I know that the IVA will only apply to myself but if the mortgage is joint will this effect anything else her side? of we seperated at any point? and if i settle at first, would the companies still want equity in this property? Even though it would be in its early stages and we would not have any money other than the initial 5/10% deposit that has been initially put down. If you have no equity then you may need to extend the IVA another year worse case. There will be a financial link so it would effect her.

No equity but already paid so would they require equity in year 5? as answered above.


What would be the best options? Her taking the mortgage as sole now but maybe we will not be able to move in future due to my IVA on a joint mortgage (even though paid off) or getting the larger property now? Will she be able to take out a mortgage on her own now, does she earn enough and whats your deposit level or are you hoping for a 5% help to buy deposit?

she can get a mortgage for abuot 120k now and has a 15k deposit but that is her money and not mine. She owuld like to get onto the mortgage system while she has the opportunity on help to buy. (we have no joint finances) If we have a family etc in the next 3-4 year we will need to move but to move we still would not be able to get the joint mortgage potentially so this is my predicament to condider a 2 bed now that we could get joint mortgage on for only a slighly higher overall mortgage cost (that would be affordable).

If I get this joint mortgage how would it be affected by the IVA as they are both in a short space of time?

Again thank you in advance

Foxy-Stoat_3

Once you instruct an IP to come up with an affordable payment plan, have a creditors meeting and for them to agree a monthly figure, it would not be in order to go to your creditors directly and make an offer to settle the debts. If you went to your IP after the creditors meeting to make this offer they would unlikely approve either. It would come across as you playing the IP along and trying to minimise paying your debt as much as possible, rather than paying what you can afford.

If your friend is going to help you, I would try and go to creditors yourself and make a reasonable offers to clear your debt first. You won't be able to base your offer on the likely dividend of an IVA.

Good luck with what you are trying to do and I hope that you can learn and move forward if you manage to get a F&F offer accepted.

As for getting a mortgage, your other half should get the best mortgage she can on her own until your debts have been settled and sufficient time has passed so that it won't effect the mortgage too much but you would of entered into a voluntary agreement with creditors so this would need to be declared, even though you haven't had any defaults.

Drum_Master

I understand that it would seem this way but if I can pay the same amount at the start as I would be over the term, surely the companies and IP would appreciate this as it will be proven what I could pay back.

My friend has also only offered this money if it would get me out of this financial situation and this would surely be taken into account?

This debt is divided between 7 lenders so to settle at a fee that I could aquire would be highely unlikely and I would not know where to start. Can you offer any advice of how I would achieve this practice?

All I want to do is move past this error in my life. The debt was occured many years ago and I have been struggling to cope and fix this fully but unfortunatly this has now been made impossible for me.

Thank you for your kind words and I look forward to any more advice you may have to offer

Drum_Master

would it be possible to raise the early settlement with the IP? so they can propose this to the creditors?