equity release again

[kah]

Just a couple of question - if you are having problems keeping up with IVA monthly payments as mortgage and secured loan payments incease more quickly than income - several postings on this list have referred to moving to an interest only mortgage. Surely this will have an impact on the amount of equity that can be released in year 4 - so is it accepatable?
(- and leading on from this question - if remortgaging - interest only - reduces monthly outgoings - should all or part of this money go to the IVA?)

[Andrew Graveson]

Hi kah,
You are correct in stating that moving to interest only will mean no capital is being paid off. This will result in less equity being available in year 4. I'm sure an IP would prefer this to an IVA failing in the early years so I think it's likely that you would get permission. I'm also sure that if your monthly expenditure were to fall to a degree that your disposable income went up (not just that your existing IVA payment was now affordable again) it might be grounds for increased monthly IVA contributions.

Andrew Graveson
Independent Mortgage Broker & Bright Oak Debt Management
andrew@brightoak.co.uk
www.brightoak.co.uk

[jpj]

Also,In the first few years of a repayment mortgage most of your payments go on interest and not on paying the actual mortgage off!