www.iva.co.uk

Hi,
My husband owes £40k on credit cards and loans, he is looking into remortgaging our house but I think an IVA may be a better long term option - my question is about the equity available in the property, how is it decided if you are eligable, do you have to have no equity at all? And could you do IVA if remortgage not sanctioned or would you have to sell home?
Thank you for your help
Hufflepuff

Hi Hufflepuff and welcome to the forum

An IVA is not dependent upon whether you have equity in your property, but if you do then the creditors will expect you to raise money against this during the final year of the IVA. How much equity do you have at the moment, and is the property jointly owned?

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

Hi Hufflepuff,

If you are looking for an IVA firm to represent you then you might find IVA.com useful. We publish a list of IVA firms and IPs together with client reviews of their services.

We recommend looking at several firms before deciding which to work with.

Good luck with finding the right solution for you.

Kind regards,
Terry Balfour
IVA.com

IVA.com - The IVA Comparison Site
100s of reviews, All IPs and IVA firms rated.

Use our IVA firm comparison tool to find best IVA firm for you:
http://www.iva.com/iva_comparison_1.asp

Hello and thank you very much for your comments.

The mortgage is £120,000 just in my husbands name and we have around £50k of equity. He has approached 'Debt Free Direct' but after intially saying everything looked ok and forwarding in all our paperwork he received a phone call to say he has too much equity to qualify for IVA.

We can't afford to remortgage again and we thought an IVA would help to get him out of the cycle of building up debt and remortaging to pay it off every few years.

Thanks for your help

Hufflepuff

if you owe 40k and have 50k equity in your house then you are not "insolvent" ...

Hi Hufflepuff
You need to be insolvent to be considered for an IVA.
You would be better to look to release some equity and reduce the debt levels,but be sure to cut up those cards.
You could also consider a debt management plan with your creditors
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

Hi Hufflepuff,
Under a debt management plan your creditors would expect you to pay any surplus income you have towards the debts.
Every situation is unique but many creditors are looking to generate a minimum of 1% of the total balance each month which in your case might be £400 (obviously this depends on affordability as well).
Some creditors may agree to freeze interest and charges, others may not. There is also a risk of a lender seeking a "charging order" on your home because of the equity you have. In practice this does not often happen but some lenders have been using them recently where unhappy with debt management payment proposals.
Speaking to an indepedent mortgage broker might make sense to weigh up the alternatives. You might be able to reduce the interest rate payable on the debt and/or extend the period of repayments by remortgaging. Both would help reduce monthly payments, but both come at the risk of losing your home if the new remortgage payment were not made. An independent mortgage broker can explain the remortgage options and risks to you.

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

Hi Hufflepuff

When you talk to a mortgage broker ensure they are authorised and regulated by the FSA, you can check this out by going to www.fsa.gov.uk/register and entering the company name or by contacting the FSA consumer helpline on 0845 606 1234. Many brokers will offer full advice after an in depth fact find. Also ensure the broker has access to the whole of market and does not charge fees in excess of 1.5% as advised by most consumer websites.

Have you recently remortgaged? I ask as you refer to not being able to afford to remortgage again.


FREE ADVICE IS THE BEST ADVICE

LEYBRIDGE LIMITED
Mortgage Broker
Specialising in adverse credit.

see feedback and testimonials at:
http://www.leybridge.com/testimonial.php
Check out my blog at:
http://mikebdomain.blogs.iva.co.uk/
Please read our Initial Disclosure Document(IDD):
http://www.leybridge.com/Leybridge-IDD.pdf

A good point from Mike on broker fees.
There are independent brokers out there who will charge a flat fee that could add up to be considerably lower than 1.5% of the loan value. Worth shopping around.

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

Hi Andrew

I have never been an advocate of a fixed flat fee for regulated mortgage products.

You are right, that in some cases the fee may turn out to be less than 1.5%. But on the other hand in some cases it may well turn out to be more. Hardly a ‘fair’ way to treat all customers when one applicant may be a complicated case borrowing 1m and one applicant may have straight forward remortgage borrowing 25k with no complications.

I personally prefer a no minimum, with a maximum to 1.5% fee, negotiated with the applicant based on the complexity of the application and the work involved. A tad fairer, in my humble opinion.

But I do agree it is ALWAYS worth shopping around and finding the right company with the correct credentials and mortgage products.


FREE ADVICE IS THE BEST ADVICE

LEYBRIDGE LIMITED
Mortgage Broker
Specialising in adverse credit.

see feedback and testimonials at:
http://www.leybridge.com/testimonial.php
Check out my blog at:
http://mikebdomain.blogs.iva.co.uk/
Please read our Initial Disclosure Document(IDD):
http://www.leybridge.com/Leybridge-IDD.pdf

Have you had your house properly valued(or is your equity figure a guess) ?? It could be worth getting an agent round to give you a valuation saying you would require a quick sale! You may have more or less equity than you think. with the market slowing prices are having to be more realistic!! you might have 60k or 20k equity!! just a thought! )

Hi Mike,

Looks like we're broadly in agreement.

Any good broker using a flat fee scale would want to (and is required to) assess that the particular flat fee they offer to any individual client reflects the complexity of the case and the workload requirements.

Impossible to say which method is fairer; what's fair ultimately is a good service at a reasonable price.

That, in a nutshell, is why customers looking for a mortgage broker are well advised to shop around in the same way as they would for any other product or service. Brokers will assess complexity and workload in different ways and offer different fee scales or %'s depending on their analysis.

We also both know that there are sub-prime mortgage brokers out there charging almost every client 3% of the loan. On a £250000 loan they're making £7500 from the client and a potential £2500 fee from the lender to boot. Shopping around will help to keep mortgage seekers away from this end of the market.

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

Andrew
I agree with the points you make – I have details of ‘mortgage brokers’ and I do use the term loosely – charging a sliding scale fees from 4 to 10% and brokers who use a flat fee regardless of the complexity of the case. Moving forward, I’m sure the public will eventually weed out these companies, by not giving them the business.

jpj
Good point, although I am not convinced, that an estate agent will give a good enough valuation of your property for remortgage purposes. They are prone to exaggerate. You would achieve similar results by checking the following sites;

http://www.hometrack.co.uk/
http://www.mouseprice.com/property_valuation.aspx

Then adding the % average house price rise in your area, for the period since the last proper valuation.


FREE ADVICE IS THE BEST ADVICE

LEYBRIDGE LIMITED
Mortgage Broker
Specialising in adverse credit.

see feedback and testimonials at:
http://www.leybridge.com/testimonial.php
Check out my blog at:
http://mikebdomain.blogs.iva.co.uk/
Please read our Initial Disclosure Document(IDD):
http://www.leybridge.com/Leybridge-IDD.pdf

Hi,

Thanks again for all your advice.

We have had house valued by a local agent at 190k. Halifax will let us borrow up to 85% which is £160k, this would allow us to clear secured loan (which has only just come to light!) and some of debts but would still leave approx £30k.

Any further advice, please?

Thanks again
Hufflepuff