Full & Final

[Tick-Tock]

Hello everybody.

We have approx 34k equity in our house and owe approx 64k. Our creditors include MBNA & Northern Rock. We have a meeting with an IP next week and we are hoping to offer 40p in the £.

We should rcv the proposal from them after the meeting to aggree with, but I think the IP is wanting to propose a monthly amount to pay the creditors over the 5 years, and then an equity release at the end to cover the rest.

Do we have enough equity to go for a full & final instead? do the IP fees change if we do this?

I think the IP fees are approx 11k which would come out of the 5 yearly payments. Would the fee amount come down if we offered a full & final?

How do we find a lender to offer us equity?

Sorry for all the questions,

regards

[jpj]

How much is your house worth?? I am just remortgaging for a full and final and the very most I can get is 87% of the value via a remortgage(and the fees and repayments are high),If you go for a secured loan the most you can get is 75% i think....

[Tick-Tock]

Hi, the difference between what we owe on the mtg and what it is worth is £34000. 85% of that amount is £28900.

What is the interest rate you are paying and how did you get the remortgage? Does the IP help in finding one for you? Did your IP fees go down? Is a remortgage a secured loan?

thanks

[jpj]

you can only borrow possibly up to 85% of the full value of your home...so if your house is worth 100 grand, you can borrow up to 85% (£85,000) get my drift? so if you have a mortgage of 60 grand you can borrow another 25 grand.
But it does depend on your circumstances..now is the worst time to remortgage with high interest rates, and a slowing property market, mortgage companies are very wary at present.

It also depends wether NR is one of your main creditors ?

[mikebdomain]

Hi Tick Tock and welcome to the forum,

a remortgage is not a 'secured loan' it is a refinance of your original mortgage, so becomes your first charge. In other words, when you remortgage your original mortgage is paid off in full and the 'new' mortgage is put on as a charge on your land (property) in its place.

When calculating the amount that you can raise from equity always remember the fees that you will be charged for arranging the mortgage. To get a clearer picture of what will be available to you, ring a mortgage broker and go through a full fact find with them. Obviously, what you will be offered will depend on your unique circumstances.

There are two mortgage brokers who regularly post on this forum who will be able to offer you free advice after a full fact find and they are myself and welshboy.


FREE ADVICE IS THE BEST ADVICE

LEYBRIDGE LIMITED
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Specialising in adverse credit.

see feedback and testimonials at:
http://www.leybridge.com/testimonial.php
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[Adam Davies]

Hi Tiktock
The IP fees would come off the £28900 that you raise and would be approx 5k,so 24k would be on offer to your creditors,a tad under 40p dividend.
Your IP will have to convince your creditor that this is the best offer available,better than monthly payments followed by an equity release.
You will need to use a mortgage broker to find the best deal for you.
Can you post details of your creditors and amounts owed.
Regards

Andy Davie
IVA.co.uk Spokesperson

About me:
http://www.iva.co.uk/andy_davie_profile.asp

IVA Helpline: 0800 197 4838
http://www.iva.co.uk/iva_helpline.asp

[MelanieGiles]

I have to say that these days, creditors are generally refusing to accept full and final offers from equity raising, unless you have absolutely no disposable income - which is unlikely if you are going to be taking out a more expensive mortgage.

Creditors seem to prefer the ongoing contributions option, with the equity raising then being effected at the end of the IVA - when potentially there could be more equity available. Whilst IVAs are an excellent medium to deal with the repayment of debt, people must be sure that they wish to commit to a long-term repayment programme, as the increased mortgage payments will have to be repaid long into the future, once the balances owed to unsecured creditors have been written off.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

To have me propose an IVA for you, please visit:
http://www.melaniegiles.com/ivaEnquiry.asp

See customer feedback at:
http://www.iva.com/iva_companies/IVA_Advice_Bureau.asp

[Tick-Tock]

thanks for your replys everybody.

We will speak to the IP & see what is being offered.

I have had a constant headache for the last week as Northern Rock is one of our creditors.

I will post any updates as & when, regards.