Remortgaging With An IVA
If you’re considering remortgaging with an IVA, you will find that there will be restrictions placed on your property for the duration of your agreement. You will need to have permission from your supervisor if you want to remortgage or sell your property.
Check your initial IVA proposal that you would have been given by your IVA provider to find out all you need to know about what can happen to your property. Your provider should also get in touch with you before any scheduled remortgage so you know what action you need to take.
You should be sent a copy of your property terms six months before your IVA is due to finish. When reviewing your IVA, your provider should ask your secured lenders for a redemption statement that will show how much it will cost to settle your mortgage, as well as completing a property valuation and sending you a copy of the relevant property sections from the IVA proposal.
Your remortgage will be based on 85% loan-to-value of your property. The value will be reduced by 15% and then what’s left on your mortgage will be deducted from this figure. The remainder is the equity that is available for your IVA.
Can I Remortgage After An IVA?
You will likely find that having an IVA will affect remortgaging, but it’s important to remember that it is possible to remortgage after you’ve completed your agreement. It will depend on how long it has been since the agreement has been discharged, as well as how much equity is left in the property and your current financial circumstances.
It will not be a straightforward process to remortgage if you do have bad credit and you will find that there are fewer lenders available. As such, it can be useful to get in touch with a specialist mortgage broker to help you maximise your chances of success.
Each lender has their own criteria that they adhere to and there are specialist lenders out there that may well consider you as a prospect, rather than the more traditional high street providers.
Your reasons for remortgaging can also make a difference to the success of your application. For example, if your fixed-rate deal is coming to an end and you’re looking for a new one, lenders may view this more favourably than if you were simply trying to remortgage to raise capital.
The reasons for your financial struggles can also make a difference and some lenders may be more receptive if you ran into trouble because of ill health or a death in the family, rather than poor financial management.
Remortgaging To Pay Off An IVA
If you want to pay off your IVA early, you may be able to remortgage your property and release some equity so you can settle your agreement ahead of time. There are various benefits associated with this, including not having to make any more monthly payments and not having to use any income increases or windfalls for your IVA.
However, it is likely that you will need to change lenders as part of the process, which a specialist mortgage broker will be able to help you with.
The amount of equity you will need will depend on how long there is left in your IVA. Typically, you will need to have an amount that equals the number of your remaining monthly payments, multiplied by the monthly amount you’ve been paying. There may also be fees you need to pay.
Think carefully before securing debt against your home, your home
may be repossessed if you do not keep up repayments on your mortgage.
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Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on a mortgage or any other debt secured on it. The guidance and/or advice contained within this website is subject to the UK regulatory regime, and is therefore targeted at consumers based in the UK. The overall cost for comparison is 4.8% APR. The actual rate available will depend upon your circumstances. Ask for a personalised illustration.