12 month extension in lieu of release of equity

[ramla]

Hi
I was left worried and confused after reading sensible 77's posting[:(] Though I'm really pleased things have worked out well-feels like the beginning of the end of a success story (well done!)- I am disturbed by the worries expressed that the agreement to accept a 12 month-extension to the iva payments might not have been accepted which would have resulted in being forced into BR AFTER 5 YEARS of commitment!!!!!!

So far (8 months), I have pretty much been in denial about the equity clause- thinking that as I am 25k in negative equity i wouldn't have any equity to release when the time comes. But It's never once occured to me that I might be penalized for it- My propasal states that 'if I am unable to obtain a remortgage, I shall make additional 12 monthly payments,ie a total of 72 monthly payments'. Doesn't that mean that the alternative 12 month-extension is automatically considered in the avent of a failure to remortgage?

Also, does it matter that the estimated value of the property appearing on the proposal (at the time of signing the proposal) was not issued by a bank/estate agency (which we weren't asked for during the drafting stage) but merely an educated guess by my husband and myself?

Regards

Mrs R

[kallis3]

I have equity in my property and will have even more at the end of five years (repayment mortgage) and I know that I will be paying the extra 12 months.

You will be fine ramla - these other ones are usually older IVAs which didn't have the extra 12 months clause.

Surprised you didn't have to get a proper valuation though - we did.

[ramla]

Yes Kallis
I am too. Nor were we asked for proof of what our utility bills amounted to! Lucky, we re honest people[:o)]
Do you think I should raise this issue-property value- with my IP? The last thig I want is for my creditors to question it nearer the end and nullify our iva as a result of inaccurate etimates!
Oh God! Just as you think you have already worried about everything you needed to worry about[B)][:D]
ivas-What an adventure![:o)]

Regards

Mrs R

[ramla]

oops, a couple of typos: thiNg,and inaccurate eStimates[:I]

[kallis3]

If it is in your IVA that you will have to carry on for a further twelve months in lieu of equity then I wouldn't worry about it.

I don't think I had to provide proof of utility bills either, and still don't which is just as well as it's all done online! I don't have to send details of water rates or council tax.

If it will put your mind at rest then by all means ring your IP next week.

[mole]

Hi Jan, if you have sizeable equity in your property can you choose to do the extra months rather than pay over equity? If you have LTV of say 50% I am sure even in an IVA you may be able to remortgage somewhere.

Do you have to prove no-one will give you a mortgage or can you just go to a known strick lender who you know will not touch you.

[kallis3]

I very much doubt I would get a remortgage even with a good LTV. Mine is 85% hat I have to try for, and although we have a fair bit it won't be that much and of course the value will have gone down since the initial valuation. The other deciding factor will be our ages and the length of time we have to go on the mortgage. Your extra payments can't be more than 50% of your IVA payment.

As far as I am aware you will have to try a couple of reputable mortgage companies.

[mole]

Thanks Jan, that is what I figured I guess if anyone had that much equity at the start they probably wouldn't get accepted into an IVA in the first place.

[kallis3]

We had about £50k equity at the start against debts of £83k. We have to try and release £28k in the fourth year. Can't see it happening somehow.

[Sensible77]

To attempt to remortgage I contacted my current mortgage provider and my bank, who both gave me letters confirming that they wouldn’t consider me for a remortgage due to me being in an IVA. Just these two letters were sufficient for PayPlan. Like kallis3, we have equity in our property, but I don’t think anyone in an IVA could raise money with it at the moment. The lending market may change in the future but I can’t see it happening for a while yet. With an additional 12 months payments my creditors will receive a dividend of 38p as opposed to 48p with the potential equity, but this is still above the minimum dividend of 30p as detailed in my Chairman’s report.

[ramla]

Again, thanks for the reassurance x
God, the sleepless nights I would have had without this forum!
thank you all x

[kallis3]

It's unlikely that anyone will be able to release anything in the forseeable future.

Don't worry ramla.

Know what you mean about the forum though - it's priceless!

[andrea1968]

Our equity will be looked at at month 54-our iva is already set at 72 months due to the request of Northern Rock(our main creditor and mortgage lender).I believe that the extended term may have been asked for because we dont believe that - equity or not -a remortgage is feasible.So either way our minimum dividend will be covered-which is preferable to worrying for the next 4 and a half years!!!Northern rock (NRAMs)policy is that we will not be offered further lending ever on our mortgage-so the chances of us remortgaging are next to zero-thank God!!
So at least one creditors got their head screwed on and is thinking long-term.

[kallis3]

Must admit that I'm not worried and have already resigned myself to the extra twelve months. I shall approach our current mortgage lender but can't see us getting anywhere as we already have two loans with them and one with Black Horse, so no chance!

[Shining]

I think I'm resigned to an extra 12 months too to be honest but at least there will be an end....eventually x