Mortgage Release to provide F & F Settlement

[Needout]

I think that after reading this forum for many months I have a reasonable understanding of how an IVA operates. Many thanks to all who have provided the information that I have obtained.
I feel I am about ready to make my submission to an IP but would like some further guideance on the following.
My wife and I have landed ourselves in a position where we owe an extensive amount of monies due to the usual problems over pending, bad planning and just simple bad luck and bad decisions. We have completed our I & E Sheet and it shows that we can only afford to pay £278 per month as DI with further increases in month 48 when Car HP finishes, £174 if we can cancel PPI as we feel it has been mis sold, £750 Standard Life Shares. Our home is probably worth £380k - £400k with a mortgage of £240k. Of this equity amount my mother has a Beneficial Interest in the property of £110k. As such we don’t feel there would be any equity to release in the 4th year. Based on the above the amount available to our creditors would be £30120.00 over the 60 month IVA ( 12p/£ including the amount due to IP as Fees) I have spoken to the Halifax (Mortgage Provider) about changing to Interest Only and they are not really happy with the suggestion as they feel the amount we would need to pay into an alternate fund (ISA etc) would not provide a great deal of saving.
My questions to one of the experts are :-
1 . Can anyone give me an indication as to how we create an alternate saving plan to pay off the capital sum and how much it would cost each month.
2 . My Mam has offered to allow us to loan against her Beneficial Interest in our home. In effect she would be a 3rd party who would be providing the security on a facility that we would be paying with the monies that we would otherwise be paying into an IVA. What we would propose is a F&F for £30000 ( or less if we could) plus the £750 from the shares plus the £278 per month until the date when we would be expected to pay over the F & F amount. I am sure that I have read on here that this is upto 6 months. If this is correct the F&F would probably be for £30k + £750 + 6 x £278= £32418.00. We may also be able to improve on the £278 for a few months in a bid to try and get a result Does anyone feel that this would be acceptable. Obviously the fees to come off this would also be less. We appreciate that we would be paying this for 12 years instead of 5 years but feel this is the fairest option to the creditors.
3 . If this sounds do-able could anyone advise who we could approach for the Mortgage. Our concern is that we want to approach Mortgage companies before there is a big “IVA” Stamps on our files. It will be bad enough with the defaults that may already have been registered.
4 . How long does a F&F IVA take. Obviously the set up will probably be the same, but after it has been agreed how long is it before we would have to pay out. Also is there anyway that an IPA can sound out the creditors before the IVA submission. I would not like to borrow a further £30k only to have creditors decline the offer.
If someone could give me some more information and impartial advice it would be appreciated. All comments greatly appreciated.

[Needout]

ADMIN - PLEASE BUMP TO GENERAL QUESTIONS PLEASE

[Welsh Boy]

needout

Quite a detailed post but I will try and simplify the mortgage part of it.

If you explain to your present lender that the need for an interest only payment period is for a stop gap and you will revert back to repayment as soon as possible that may be something they may consider.

Alternatively you could ask for an interest only payment method and then ask if you are able to make capital payments off the mortgage without penalty. If there answer is yes (and it probably will be as lender actively encourage you to pay off the mortgage)then tell them it is your intention to make capital payments off the interest only mortgage and reduce the balance like this.

In essence the difference between a repayment mortgage and an interest only mortgage is that a repayment mortgage will take part of the monthly payment and use it to reduce the outstanding mortgage. The reduction is very little in the early days of a repayment mortgage unless you make overpayments.

You could have an interest only mortgage and make payments off the mortgage debt when it is affordable to you in theory like a repayment mortgage i.e. interset and capital being repaid.

Personally I would not pay into some type "saving plan" as they are known. People automatically think of an interest only mortgage and then think they have to have something like an endowment or pension type saving plan running alongside it. The interest gleaned at present is minimal and I would rather make a payment off the mortgage from funds held purely on deposit and tus reduce the balance and obviously the interest payment will go down.

The reason for mentioning this is because.

a) It may enable you to stay with Halifax if you explain to them what you intend to do and

b) It will save you money on fees if you were to remortgage.

What rate of interest are you paying with Halifax, also what is your level of outstanding debt. Hope this helps. Tony

[MelanieGiles]

Does your Mum have registered security for the £110k you refer to? A full and final based IVA may well be a good solution for you and the creditors, however the issue of Mum's claim over the property will have to be very clearly explained.

[Needout]

Thanks Welsh Boy for your input. I will sit down later and read in depth the points you have made.Melanie - My Mams BI is as a result of a house swap that never got finalised. We owned a Bungalow and my mam lived in and she owned the barn convertion which we lived in. 2 years ago we decided it was probably better to get the ownership changed over as my father had just previously died. My wife and I took title on the barn from my mam and mortgaged the property to clear the mortgage on the Bungalow and carry out loads of work on the barn. The intention was also to clear off a Secured loan on the bungalow and have it moved onto the barn Unfortunately Barclays would not allow this as it would have been a change to the loan which would have resulted in the cancellation of the PPI that was also taken on the loan. As a result of this the title on the bungalow still remains with us with borrowing pretty much equal to the property value. In light of this my mother still has a BI in the Barn. Initially when we did the swap the intention was to have a trust deed. This never happened as my mams solicitor was pretty useless and as such our mortgage offer was about to lapse and as such it was agreed to dismiss the idea. It was only months after that my mams solicitor was closed down by some official Legal Body.
We have since tried to get Barclays to play ball and again failed.All I want to do is get this whole problem moving so then I can see the light at the end of the tunnel. Thanks

[MelanieGiles]

I would get the legals in place on those transaction as a matter of priority.

[Needout]

The problem is Melanie, I cant get the title on the bungalow moved until I have transferred the security/loan from the bungalow. Also by doing it now would it in itself not cause problems as it would appear as though I was transferring an asset. What legals were you meaning or are you referring to what i have just noted.

[MelanieGiles]

I think that you need to get a declaration of ownership and interests as evidence of the intent of all parties when the properties were transferred.

[Needout]

What form of document would this Declaration take, who would draw it up and where would we lodge the document. I am sorry to be asking what may be simple questions but I want to get moving and get at least one thing set in my mind so I dont have to keep asking myself "what ifs" and "why nots" etc. I appreciate that this may be a new spin on things for you also.

[MelanieGiles]

You would need to take specialist legal advice on this from a solicitor.

[Needout]

Melanie. In regards to point 4 copied here - could you advise "How long does a F&F IVA take. Obviously the set up will probably be the same, but after it has been agreed how long is it before we would have to pay out. Also is there anyway that an IPA can sound out the creditors before the IVA submission. I would not like to borrow a further £30k only to have creditors decline the offer."

[MelanieGiles]

Your IP ought to be able to close your case as soon as they receive funds and have agreed all creditors claims - but this could take severalk months.

If your IP is to sound our creditors in advance, this could be successful, but most firms will simply want to get the prposals to a creditors meeting for the ultimate agreement.

[Needout]

Bumped