Hi after reading some of the info regarding this...anyone confirm or correct me as i am thinking going into IVA and lots of equity in house..ie 30k...debts 46k
1.When you remortgage the amount cant be more than what you pay already for a mortgage and 50% of the value of payments to IVA..take that means the 50% would be taken over 25 years as well
2.Creditors will try to get as much as they can ie the full amount owning from debt from house..and not ask just for the 37p in pound my IP says i may pay in IVA..
3.My mortgage payments now are because i had a much better paid job.I had the house for about five years now...if i tried to get a mortgage now on my wage i wouldnt be offered the loan to pay for it even what i still own now on house..my question is...come the fourth year on IVA and i cant get an remortgage on my wage even with a sup prime lender...can the creditors just make me sell house..?? Or just be forced to add another years payment on...
I know most likely this question been asked...but about to do IVA and not sure...
Hi there and welcome to the forum. I am happy to help with these points.
1 That is absolutely correct - you would carry the burden of the additional mortgage payment over the terms of whatever period you agreed with the mortgage company. This need not be 25 years - it would depend upon your circumstances.
2 The spirit of an IVA is that you offer as much as you can afford to pay, rather than creditors taking as much as they can - but sometimes it probably does feel like that to the person who is making the payments. I am sure that your IP will have advised you that the raising of equity during the final year will be based upon a maximum lend of 85% loan to value, which in reality probably needs adjusting due to the current position regarding the mortgage marketplace. I would say that 75% is probably more realistic in today's terms.
3 If you cannot raise the money during the final year, then you may not necessarily have to pay anything extra - but this will depend upon whether creditors seek to modify your proposal at the creditors meeting. Some creditors do like to provide for an extra year's contributions in these circumstances.
Thanks for your help its cleared things up....i dont mind paying up to what is owned..as long as i wont get back into the same boat when IVA is finished....this is a lesson learned and i wont be doing it again..thanks again..
Oh one more question...to do with the remortgage..
Can i decided what type of mortgage i can take when i do remortgage to sub prime lender..as the different for paying an interest only mortgage and an repayment mortgage can be alot..as the interest mortgage needs something to pay the loan part at the end of the term and can be cheaper sometimes..then just a plain repayment one..which i would perfer..
Is there still such a beast as a "subprime" mortgage lender? I would have thought they have disappeared from the financial map forever. It is difficult to see many people just entering an IVA and on interest only mortgages being in a position to release equity in year 4 unless, of course, house prices start to rise and credit availablity increases. Little wonder that this causes so much consternation among posters.
If you were my client, I personally would steer you towards the repayment option, especially if you have been on interest only with no method of repayment for the previous five years. This is one area of the IVA protocol which is a little woolly, and good IPs will interpret this to suit their clients circumstances, whilst delivering a fair return to creditors.
There are a couple of companies who will lend to people in IVAs, but no more than 75% loan to value I gather at the moment.
