concerned about remortgaging at the end of the IVA

[p.b1]

I am considering applying for an IVA, currently I am using the good offices of the CCCS, but am concerned that there proposal will have to run forever. However, I am concerned about the possibility of having to remortgage at the end of the IVA. It's re-mortgaging that has helped put me in this situation...any help out there?

[MelanieGiles]

Hi pb1 and welcome to the forum

An IVA proposed by the CCCS is unlikely to run for any longer than one proposed by any other insolvency practitioner - the norm is for them to run over five years.

It will be difficult for you to avoid a re-mortgage during the final year in today's climate, where this provision has been accepted by the majority of creditors as a stipulation of their agreement.

How much equity do you currently have in your property?

[jpj]

I would argue it is becoming less likely you would have to remortgage in the forth year in the current climate!
Mortgage lending is getting tighter due to the credit crunch,and house values are stagnant/falling and probably wont move for at least the next 2 years!
It is difficult to avoid the remortgage clause,yes, but wether you actually have to remortgage is another matter.
I think PB1 needs to post his house value, equity, and the amount of time his IVA has to run to year 4 to get a more precise prediction from the forum.

[MelanieGiles]

That is a good point jpj, highlighting the fact that raising equity in the final year of IVAs is dependent upon the state of the property market at that time.

[Andrew Graveson]

And the state of the lending market. I don't think anyone within the finance industry really knows at what point normal service will resume in terms of mortgage lending post the "credit crunch".

There are still lots of lenders who are prepared to lend to those in IVA's but how and when the market settles down (at a point that works for lenders and borrowers) nobody truly knows.

[mikebdomain]

I have to agree with Andrew on this, the current situation has taken a lot of mortgage advisors and brokers by suprise, in that the length of time to 'resume normal service' is taking a little longer than originaly anticipated.

And with house prices falling during December the LTV situation can only get worse.

[jpj]

Its Ironic really...the majority of creditors in an IVA tend to be the banks...who insist of the 4th year equity release clause, yet it is the banks that are tightening lending so much that people cant remortgage in their fourth year..In a roundabout way they are shooting themselves in the foot. But I guess mortgage lending and IVAs are a very small part of their business!