However, not everyone carrying an IVA precedent on his shoulder is being given the second chance of a new mortgage. In most of the cases there is no other choice for the lender to make than selling the home. If you are lucky enough, the advisers will consider your family and choose to keep you in the house in order for you to be able to get back on the track and pay back the money you borrowed. It should be really clear to you that this new mortgage does not erase your precedent debts; it only allows you to meet them head on, while still owning your home.
What slightly differentiate IVA mortgages from other types within the branch of IVA are the applied rates.
The latter ones will be higher and consequently less attractive, but for those with IVA issues any condition is better than nothing. No matter how high the rates are, individuals can generally keep up with them.
Apart from these minor details, they share the same advantages and disadvantages of a standard IVA.
Advantages:
- Being highly regulated, it is very unlikely to be abused by the IVA service providers themselves. At this stage in ones life, all the precautions have to be taken.
- High level of confidentiality guarantees that the IVA does not affect professional or social status whatsoever. Holding public office is not a hazard anymore!
- You are to pay only an agreed percentage of your debt and nothing unexpected.
- While being under an IVA, lenders have absolutely no right to exercise harassment on you. On top of all, phone calls become practically inexistent.
- Among the minimum requirements of an IVA, we find a minimum of £200 monthly payment toward the creditors. You have to possess a higher income in order to afford your livelihood on a daily basis. For this very reason having a regular bank account is the best thing an IVA can still allow. Of course there is no such option as an overdraft facility.
- IVA freezes the total interest on your loan and this is just like an airbag for your debt.
Disadvantages:
- Individuals are required to release some equity based on the IVA.
- IVA is pretty restrictive; it is suitable only for people with a minimum level of unsecured debt.
- Forget credit cards, all of your credit cards get cut up and returned to the issuing financial institutions.
- You can give up your struggle from the very start if you consider that you cannot afford the monthly payments.
- The whole chance of being accepted is linked to a vote, as creditors agree on the arrangement through a vote.
No matter how many advantages or disadvantages does an IVA hide, customers keep on being concerned, whether they will cope with an IVA mortgage? Prudence and obedience towards your adviser or mortgage broker are the sole key factors. Debt unlike drugs does not kill, therefore returning into the world of debt after releasing yourself is just another method of self inducing pain.
Very few people can brag about never having the need to feel bad because of their financial situation. The same applies for the ones who made it through after an IVA. After all 5 years represent a really long period that seemingly will never come to an end. This is yet another reason why less and people come to asking themselves: What will do after I get an IVA mortgage?
Just like a common criminal flees towards the Mexican boarder, you too have to keep moving away from your stained financial past. Although it sounds both terrible and surprising, IVA mortgages are first of all a privilege. Second chance is the first and last chance you can really wish for, so cut with the bad habits, check your credit rating, keep up with mortgage payments, keep saving and all the rest will come by itself.
