we are in month 61 of iva and just had letter regarding equity release. being offered a secured loan of 6,500 over 21 years at £118 per month at an interest rate of 23.2 variable, this means i will be expected to pay 30,000 back. my original paperwork stated after 60 months look at remortgage or another 12 months of payments. obviously this has come as a shock and worry so would like some advice how to deal with this as we are so close to the end!!!!
Unless you have signed to accept the new protocol then I doubt that you can be MADE to take out a secured loan over a 12 month extension of payments to your IVA. You need to speak directly with your IP and express that you will not take out a secured loan as it was never an option or a consideration when you took out the IVA.
Last Payment made 04/12/14. Completion Certificate 25/7/15. IVA company GT. No Issues
This sounds like a standard clause from the newer terms and conditions and possibly don't apply to your IVA unless you signed something accepting a variaiton of the terms.
In any event I believe you don't have to accept the offer in which case the 12 month extension should apply instead.
Speak to your IP initially and point out that the secured loan does not appear to apply to your IVA.
It may just be a case that you were sent the wrong letter template...
There are 3 companies in particular pushing these basically saying that secured loans are an option based on their reasonable interpretation of the older protocols.
It will come down to how hard you feel about this but an immediate complaint should be made.
IVA started March 2011, Completed March 2016 and certificate issued 11 days after final payment. It was not always easy but then some of the best decisions aren't.
If you have the older protocols and have not accepted a variation to move to the newer version and the IP has decided to pervert his understanding of the old wording to include secured lending, i.e assuming a remortgage and a secured loan are the same thing, then they are still bound by the lending limitations built in to the old equity clause. The old clauses limit remortgage payments to 50 % of the IVA payment as well as limiting the term to not go beyond the original mortgage term.
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
Unfortunately the 2010 Protocol does allow for the term to be extended beyond what it was. The actual wording is;
• The remortgage term does not extend beyond the later of the debtor’s State retirement age or the existing mortgage term.
This means that if there is a remortgage product available you could have to switch your entire mortgage to it at sub prime rates and extend the term for any number oif years. In such an instance a secured loan may be a better option.
It does depend on whether there is a remortgage product available.
font size="1" face="Verdana, Arial, Helvetica">quote:<hr height="1" noshade>Originally posted by Michael Peoples
Unfortunately the 2010 Protocol does allow for the term to be extended beyond what it was. The actual wording is;
• The remortgage term does not extend beyond the later of the debtor’s State retirement age or the existing mortgage term.
This means that if there is a remortgage product available you could have to switch your entire mortgage to it at sub prime rates and extend the term for any number oif years. In such an instance a secured loan may be a better option.
It does depend on whether there is a remortgage product available.
I disagree, Michael.
"The remortgage term does not extend beyond......or the existing mortgage term."
Any remortgage would not have a term longer than the existing mortgage. A 21 year secured loan is likely to extend beyond that period and is therefore not permissible.
I agree that, should a remortgage product be available it could be employed (ending at the existing term) and a secured loan might, in those circumstances, be preferable. As has been said before, all options should be looked at. But, I stand by my assertion that a secured loan cannot be forced upon you under the old protocol.
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
Yes but Foggy it says the 'later' of the debtor's State retirement age or the existing mortgage term. I read that to mean that if your mortgage is due to finish before the State retirement age then the term can be extended.
If there are any mortgage products available I could see some IP firms using this wording to push the term out and thus enable equity to be released.
I agree that a secured loan cannot be forced upon someone under the old protocol but I do think the mortgage term can be extended.
Still comes down to badly worded, written you by committee and even latest ones could be far better is sense checked properly.
IVA started March 2011, Completed March 2016 and certificate issued 11 days after final payment. It was not always easy but then some of the best decisions aren't.
