Trying to release equity was a bit like being sold a loan from a shark. Advice please.

[2blackdogs]

Hi Everyone
Month 59 Help
contacted from company called select partnership (chester), trying to release equity from my house
was a bit like being sold a loan from a shark
they are trying to get me to sign a deal to release / raise 20K+ via a remortgage at 11.9% over 18 years
is this legal ? also what are my options ?
ive heard i can just pay another 12 months payment.
advice plz

thankyou

P

[kallis3]

Hi and welcome,

Check your paperwork to see if it says you need to try and remortgage - if there is no mention of a secured loan then you don't have to take one out.

Do you have equity in the property? Have you had it valued?

[Foggy]

If they are offering a REMORTGAGE as opposed to a secured loan, and the repayment and term ceilings are within those detailed in your paperwork under the equity release clauses, then you have to take it, or find a better offer. The 12 month extension only comes into play if you cannot remortgage under the terms of the agreement and is down to your IP / creditors, not to you.

If they are offering a second charge / secured loan and this is not in your agreement then you do not have to take it.

If you do remortgage, it will obviously be at a bad rate, but you need to suffer this for a year or so, then remortgage again at a better rate when your credit files clear up.

[Michael Peoples]

There are remortgage products available now so a secured loan may well work out cheaper. The secured loan can then be cleared after a couple of years anyway once your credit file clears up and this should be better than an entire mortgage at adverse rates.

If you are subject to protocol or standard modifications then your mortgage term could be extended up to retirement age to facilitate a remortgage so the advice you are getting from Select may be the best available.

[Lisa Thomas]

Check your paperwork for your options. If you can't remortgage or pay from third party funds then the 12 month extension is likely to apply.

[Lisa Thomas]

Of course you probably have to have the minimum amount of equity for it to apply in any event, which is usually £5k. Check your paperwork.

[Michael Peoples]

There must be substantial equity in the property Lisa. If Select can raise £20k by way of a remortgage or secured loan and this is at a maximum 85% loan to value then the equity must be high.

In addition the repayments can only be at 50% of the IVA payments irrespective of the level of equity so the amount of equity in the poster's property could be anything.

The 12 month extension is where there is equity that cannot be released and if the debtor qualifies for a remortgage then they should look at the cheapest options available to release their equity. This is what they agreed to when they signed the IVA paperwork and to refuse to release equity could be deemed a breach.

[2blackdogs]

Thankyou for your replies
Kallis3, Foggy, Michael and lisa
All good information

At the start of my IVA i was under the impression that it was for 60 months with a possible release of equity from my house via a remortgage or then again a possible 12 months extension

If i am reading the paperwork correctly they are talking about a figure approx 18K - 22K, over 18 years, it dosent mention the remainder of my mortgage or term and can only guess its a loan from shawbrook, who if you look up via google (other independent search engines are available ), dont get great reviews

https://uk.trustpilot.com/review/www.shawbrook.co.uk

Kallis3 and Foggy your bang on the nail
it states a remortgage not a secured loan nor do i have one

Kallis3 equity in property not valued by myself, think they used a web site, but every house different in my street and i explained this to select when on the phone,].

Im awaiting a reply back about if loan or remortgage
but on further reading this should have been started month 54 not 59,

Should i get in contact with my IP, or await reply from select ? last payment due approx 1 week.

I came into this IVA not proud, cap in hand and head held low, but the understanding 60 or 72 months and finished, i didnt expect a 18 years extension on a final figure

Anyone reading this in similar position take advice from kallis and foggy and check your paperwork

Thanks to everyone

P

p.s. merry xmas or is that to early

[neverending]

Hi

Do not agree to a secured loan unless you have agreed and signed a variation to your IVA to allow this option.
You were only advised of a possible remortgage when you agreed your IVA initially, no one ever mentioned a secured loan possibility

Let us know how this progresses

Regards

[kallis3]

Thoroughly check your paperwork as Andy says.

[2blackdogs]

Hi Everyone
and sorry for delay in post, (but it has taken this long to confirm ) (6 months wow)

recap....
at month 59 dec/jan 2016, i was nearing my end of the 60 month IVA, woop woop !!!!!!
i was contact by a company called select (chester) about equity release. !!!!!!
Now this part is VERY IMPORTANT

Select tried to get me to take out a LOAN not remortgage (at some crazy %)
to give to the creditors to finish the lonnnnnnng iva 20K+ for 18 years

ppl you need to check your IVA paperwork (many good advice on here)
i was under protocal 2010, select thought i was under protocal 2014
This part is very important as they try and release equity from your house
and they push and push for this, just say NO!!!!!!!!

PLz check your paperwork like foggy and others said

if your on 2010 this dosent apply to you
this only kicks in at 2014 (i think, but im no expert on subject)

60 months is a long time in this agreement, to add another 18 years is crazy
(yes they do say you can adjust after 12 months, but guess that isnt 100%,,
to me was like a loan shark, looking for extra £££££

Plz stick to your guns

so ive just started a extra 12 months extension grrrrr
but im happy to do this ( im gonna try pay off in
just want the thing finished
i believe im a few months behind in payments, but thats a admin error ive just confirmed.

PLEASE look at your paperwork if you are nearing your iva and under 2010 rules, dont release £££££ of equity in your hard worked house

Hope this is helpfully to anyone at the near of there long journey
better to pay £7000 over 12 months than extra reduced payment (50%) over18 years this is crazy, but guess some people might do this

I very much hope not !!!!!

Regards
2Blackdogs

i will answer any email on subject, but ive only been here a few times, and im not sure if redirected to private emails
thankyou
Kallis3
foggy (TY) keep this link alive plz
neverending

dont trust IFA !!!!

[kallis3]

At least you can see the (debt free!) light at the end of the tunnel!

[Foggy]

At least ( at last!) it is sorted.

Yes, you are right --- the secured loan option wasn't in the Protocol until 2014 ---- even then some IP's still use earlier clauses, so always worth checking and challenging if need be. Also some still use R3 terms ( such as McCambridge Duffy ) which also do not use a secured loan option so far.

[Michael Peoples]

Glad it all worked out for you and you will be out of the IVA after an extension. It is likely that a remortgage was not an option for you but it seems there are more and more products becoming available. When someone does qualify for a remortgage it is often cheaper to take a secured loan and the advice from Select would always be in relation to what is the cheapest way to borrow the funds. In fairness we have dealt with them for many years and while the products may not suit everyone they have helped many people over the years.

The newer protocol includes secured loans as well as remortgage so in future people will have to raise equity where they have it. It does seem fair to me that when equity is promised to creditors it does get released as otherwise creditors will be more likely to reject in future. We already have some major creditors rejecting IVAs where there is equity because agreeing to these IVAs does not mean the equity will ever be released.

[Ryan]

Good to hear that you have now sorted out a solution that you are happy with going forward.

Regards