IVA or 110% mortgages????????

inneeedofhelpdude

silvercar wrote: »

More advice on the mortgage board probably.

The problem with 110% mortgage is that you are tied to the lender when your deal ends and the mortgage needs to be renewed. Say you got a good deal last year, Northern Rock were offereing 5% I think on 110% mortgage. So the deal runs out and northern rock transfers you to their SVR of 7.25%. Your payments on a 100k property, 110k mortgage go up from £458 to £665 a month. So you look to move mortgages, but no-one will offer you a good deal at over 100% so your stuck. If you transfer the mortgage and keep the secured loan (they are structured as a 100% mortgage plus a 10% secured loan) NR will increase your rate on the loan to 15%, so you can't do that.
In a rising market you can get away with it because a 110% loan becomes a 100% loan if house prices increase by 5% for each of 2 years. In the current market you can't do it.

The other problem is that you pay for the loan over the long term more than 3 times its value so its not the way forward.

This 110% loan is not the way forward, you are borrowing more money to move debt around.

Your situation is not terrible. You are living at home to make in roads into your student debt, this is very common. Once your salary increase you can make inroads into the debt and move on. Buying a home, taking on more commitments is not the way to do it.

Thank you for your comments. I appreciate everyone taking time and input to this thread.