I have been a Financial Adviser and Mortgage Broker since 1978 and cannot believe that Mr Hunt is suggesting that remortgages to 85% are available to those who are still in an IVA - unfortunately it simply isn't true at the moment. All Lenders currently contend that they don't have sufficient funds to satisfy the rising public demand for mortgages. In that situation they 'cherry pick' and take the clean cases to the detriment of those who have adverse credit registered.
The suggestion that a Secured Loan would be a suitable vehicle to raise funds, regrettably shows his lack of understanding of most IVA conditions - why would anyone in their right mind borrow funds on a secured loan basis over a term of 5 years or more, when they only need make 12 extra monthly payments to their IP to complete their obligations.
Under Financial Service Authority regulations all members must Treat Customers Fairly - I would be hard pressed to justify selling a Secured Loan to someone in an IVA when their alternative is likely to be the much cheaper option of 12 further monthly payments. The difference of course is that the Broker earns nothing from the good advice to continue the IVA for another year.
When the mortgage market recovers and 85% mortgages become readily available for IVA participants, Creditors demands will have to be satisfied. However, as a layman, I think those in the latter portion of an IVA should consider themselves lucky that remortgages aren't available - hand over a lump sum and saddle yourself with a higher mortgage payment, WHY?
Sharing from experiences of dealing with debt
The greatness of a man is not in how much wealth he acquires, but in his integrity and his ability to affect those around him positively.
Bob Marley. http://kallis3.blogs.iva.co.uk
What refreshing input from Mackem - to whom I extend a very warm welcome. Your post is full of absolute common sense, and your thoughts are supported by insolvency practitioners too. We do not want our clients saddled with huge loans at the end of their IVAs either.
Unfortunately I am only coming up the the end of my first year of my IVA and who knows what the housing market and lending descretions will be for us in 3 and a half years.
Excellent post Mackem and in language that you can understand as well. I have 3 months to go to the end of my 3rd year and will soon be entering my 4th so this time next year will be in this position of chasing a mortgage to release equity, although presently there is very little and certainly not 15%. Houses round my area are probably going for what they were purchased for 4 years ago so i think i shall be looking to complete my IVA over 5 years or possibly 6 if the creditors wish to extend it. Hey ho have got through 3 years so will get through the next 2/3 the same way.
Om shanti, namesté, good luck to all who are embarking on the IVA journey, it isn't always an easy one but the outcome is the best.
IVA COMPLETED August 2012, received Completion certificate 18.4.13.
This is a great post which really helps raise understanding of the 4th year equity release minefield.
What still isn't clear to me is; if remortgages are not currently available can creditors force you to take out a 2nd charge at 'rip off' rates or is this when IP's step in and call a variation meeting where hopefully common sense wil prevail.
Mackem47 wrote:
I have been a Financial Adviser and Mortgage Broker since 1978 and cannot believe that Mr Hunt is suggesting that remortgages to 85% are available to those who are still in an IVA - unfortunately it simply isn't true at the moment. All Lenders currently contend that they don't have sufficient funds to satisfy the rising public demand for mortgages. In that situation they 'cherry pick' and take the clean cases to the detriment of those who have adverse credit registered.
The suggestion that a Secured Loan would be a suitable vehicle to raise funds, regrettably shows his lack of understanding of most IVA conditions - why would anyone in their right mind borrow funds on a secured loan basis over a term of 5 years or more, when they only need make 12 extra monthly payments to their IP to complete their obligations.
Under Financial Service Authority regulations all members must Treat Customers Fairly - I would be hard pressed to justify selling a Secured Loan to someone in an IVA when their alternative is likely to be the much cheaper option of 12 further monthly payments. The difference of course is that the Broker earns nothing from the good advice to continue the IVA for another year.
When the mortgage market recovers and 85% mortgages become readily available for IVA participants, Creditors demands will have to be satisfied. However, as a layman, I think those in the latter portion of an IVA should consider themselves lucky that remortgages aren't available - hand over a lump sum and saddle yourself with a higher mortgage payment, WHY?
IVA COMPLETED ON THE 17th MARCH, FINAL I&E COMPLETED 26th APRIL, COMPLETION CERTIFICATE ARRIVED 2nd AUGUST
I don't think they can. Most IVA's these days say that any remortgage payments cannot be more than 50% of your IVA payments.
You will find that most creditors will accept an extra year.
Sharing from experiences of dealing with debt
The greatness of a man is not in how much wealth he acquires, but in his integrity and his ability to affect those around him positively.
Bob Marley. http://kallis3.blogs.iva.co.uk
