IVA and impact on a re-mortgage..?

jlg1

Hi everyone..

Just hope I can get some advice re: re-mortgaging and the impact an IVA can have.

My wife has an 5 year IVA which is up in 2 years time. Our joint mortgage is up in January 2020 both names on there.

We were with a mortgage advisor today and when giving a note of income my wife mentioned she has an IVA. We always use the same mortgage broker and this usually isnt a problem.

My wife works part time and I'm a self employed music tutor.

She has extra money coming in for DLA, tax credits and carers allowance for both our boys into her bank account. Works part time only 13 hours per week because of the boys etc...

We explained this to the mortgage advisor but she asked could this not be changed so the allowances etc.. would come into my account and be considered extra income...?

Which made us think so this isn't considered income on her behalf..? or is it...?

It also seems as soon as an IVA is mentioned it changes everything..? Yet we've had a previous mortgage deal (2 year fixed) within the last 3 years and it went ahead no problem and as far as I remember her payments coming into her account were used as income/extra affordability.

So if someone could shed some light on this..? Does the fact she has an IVA impact on our chances of a mortgage in general and is the DLA etc...not considered as extra income on her part..?

Thanks for any advice/tips etc...

J

LRmortgage

Did you remortgage last time or did you product transfer with the same lender?

IVA will definitely make it harder to remortgage, not necessarily impossible but you may find that a product transfer with your same lender is easier.

ACG

An IVA is a form of insolvency (treated by mortgage lenders in the main in the same way as bankruptcy), the only way you would get a new lender would be to clear the IVA with the mortgage and even then you are talking rates of at least 6%, if not closer to 7% until she has been out of the IVA for a year.

Your only option will be to stick with your current lender and switch to whatever they are offering from what I can see.

fatbelly

She will be required to attempt to remortgage in the 5th year of the IVA in order to release equity for her creditors. If she cannot do that by way of remortgage or secured loan then she will be required to make a further year of payments.

Her IP will have explained this to her but that info doesn't seem to have got through to you. Her IP will write to you to make you aware of the review. They’ll also provide you with a copy of the property terms from the IVA proposal and explain that as joint owner you need to agree to any funds being released from the property.

jlg1

Hi...


I'm just wondering..are those 6 and 7% mortgages purely because of the IVA...?


I did a few online searches and obviously without getting into income etc but with mentioning the ongoing IVA there are offers coming up - even without product fees that are actually cheaper than what we are paying now - which is fixed at 2.44% for 2 years at £371 per month.



We were thinking this IVA was a "noose" around our necksand was leaving no options at all but it seems athere may well be options.


Our mortgage broker quoted us £428 for the same term we have now with the same provider and yet speaking to them myself they are actually offering £412...? and offered they maye be able to work with us.



Its beginning to seem like we could get a better deal if we do this ourselves and bypass this broker we are using...?


We've had the same lender now for the last 2 mortgages and the last thing I want is a product fee added on to take out a new deal with someone else...


I read that unless you are asked you dont have to declare that you have an IVA...?


Obviously if asked we will tell them but I'm thinking most lenders will probably ask...?


The mortages have always been in my name with my wife only as a joint name..everything has always been from my bank account so any history of payments etc are only involving myself.


Any debts she ran up were not mortgage related.


Not sure if this makes a difference but wondering would this be taken into consideration...?


All were hoping for is that there are some options that are open to us...;)


J

jlg1

To clarify it was a new product with the same lender but they are not offering competitive rates at the minute at the the time they happened (according to our broker) to be the best available.


I'm thinking maybe our broker is working to their commission rather than our best interests...?


On a side note one thing that has been really annoying is the brokers comments on my income without getting into detail, we feel its a bit "inappropriate" and judgemental - that he seems to think I should be earning more. This has put us off a bit to be honest.


This, we feel is very unprofessional.


Upon changing our critical illness cover ourselves a lot of years back the broker was furious and basically "told us off" for changing providers. Well thats how it felt..again inappropriate we feel.


Surely we wouldnt be alone in arranging a mortgage ourselves...?

ACG

Fitting criteria and being accepted are very very different.

Of course people do their own mortgages, not everyone needs a broker imam the first to say that. But your situation is by no means straight forward and neither is the way you are describing it.

Are you doing it jointly or solely? If you are doing it solely in your name, the IVA is irrelevant unless you are financially associated in which case it could be an issue.

sourcrates

OP, you really need to read post #4# again.
Obtaining a re-mortgage whilst you have an active IVA will only be possible through a broker or specialist lender, and your IP will expect you to try in year 5.
Any equity will be paid to your IVA for the benefit of your creditors.

If non of this is possible, another year of payments is the norm.

After six years, the IVA will fall off your credit file.

Thrugelmir

jlg1 wrote: »

The mortages have always been in my name with my wife only as a joint name

Joint mortage = Joint and several liability.

The outcome of any mortgage application will be based on the circumstances of both of you.

jlg1

Hi..


I read through my post.


I can see its not clear enough.


This is a joint mortgage though what I meant was I am responsible for all payments towards it but of course I can see if its a joint mortgage all income will be taken into consideration.


TBH the IVA was something that she was embarrassed about and so I didnt know about it until about 3/4 years ago.


It so happens that we have been with the same lender before the IVA started so by some chance when we started our current offer, the rates were suitable for our needs.


I now understand that she will probably have to pay an extra year on the IVA as we dont plan to touch the mortgage for equity etc...


Ive never needed an IVA thank god.. so dont know that much about them..



Its worrying that our current provider isnt offering a good rate which would make things a lot more straight forward as weve used the same mortgage advisor for about 10 or more years.



I'm waiting on them getting back this week to see what they can offer us though its not looking hopeful.


See how it goes...






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