Hi
I have been in an IVA since September 2008 and have 2 payments left, however a few months ago I was told that to satisfy my creditors I agreed to take out another loan against my property and make a final payment.
I have now been in touch by a third party agency saying that I had agreed to remortgage up to 85% of the valuation of my house and that my creditors were anticipating a payment of £20,742.12 This I was never told at the beginning of the agreement. I have also just found out that all the time I was paying my monthly amount this was merely covering the costs.
Hi Steve. Have a good read of your proposal and see what it says about equity release in there. Whatever it says is what you agreed to and signed up for. The IP cannot force you to do something not catered for in the proposal.
I doubt the payments have been merely covering costs, as the creditors would never have agreed to that in the first place. Again the costs will be outlined in your proposal and Chairman's report.
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
When I said covering of costs the monies given to my creditors seems nothing to what the IVA company have taken. I have been told that I will have to take out a loan of roughly £9000 plus broker fees which add up to an extra £2000 plus interest and over 15 years and hope my creditors except this.
I have been looking on this site and please advise if poss.
House valued say £80,000,(open market) owe to mortgage 42,000 leaves £38,000 house house 50/50 so therefore leaves £19,000.
Now if I have this right 85% of house value £72,250 again minus £42,000 leaves £30,250 50/50 split leaves £15,125 What is the maximum loan?
I have seen also on this site that the value of your house should be that of a forced sale and not what they usually go for, is this correct.
Sorry one more question.
I was wondering also after reading other peoples experiences, is it just possible to extend the period of the IVA rather than take this additional loan, I really do not want to take this out due to the this lasting 15 years.
Yes, generally the equity is based upon 85% -- which on an £80k property is £68k. Less the outstanding mortgage, leaves, £26K.
Now, where are you getting this 50/50 split from ?
Again, this all boils down to what is stated in your paperwork.
In modern, protocol compliant, IVAs the general clause is along the lines of : at month 54 you should attempt to release the equity by remortgage (assuming it's over £5k). If you are unable to release the equity then the IVA gets extended by 12 months instead. This generally costs you a lot less in the long run.
Many older clause are being varied to align with the modern version by calling a variation meeting.
Who are you with and what does it say in your paperwork ?
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
There has been a number of post recently where the IP has tried to force the client to take out a loan. I was of the understanding that Protocol compliant IVA's only allowed for the re mortgage or 12 more payments.
As has been said already have a good look at your paperwork.
You may have a minimum dividend to achieve and you do have substantial equity in the property. Your IP does have to act as an honest broker and bear in mind that you can remortgage in a couple of years and remove the secured loan. If you do remortgage you will be switching all the borrowings to adverse rates so a secured loan could be the best option.
I was been told that I shouldn't be worse of than I am now, my mortgage is a tracker mortgage and the rate is only 1.49% and if the way things are with the banks now and they do not change then in a couple of years I might not be able to secure a remortgage. It is not the paying back the money that is concerning me it is all the broker fees etc that they seem to be able to charge and I am not in a position to challenge these, as I have to pay it and that is the only way that this is going to get finished.
Is there any other options available to me? I am not in the position to get any financial help from any friend or family member.
Do you actually have your paperwork there? A protocol compliant IVA generally has a clause along the lines of the property must be valued in month 54. If there is more than £5k equity you must attempt to release this equity by remortgaging. If you are unable to secure a remortgage then the IVA is extended by 12 month instead.
They also put limits on the remortgage in that it must be 85% LTV, not more than 50% of the IVA repayments over the original mortgage and will not extend the mortgage beyond normal retirement age.
We have had posters here who were requested to take out a secured loan instead of the remortgage, but, as theit proposals said "remortgage" the IP was unable to force a secured loan on them and the 12 month extension was granted as originally agreed.
You are not with DFD are you ?
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
A remortgage is a remortgage. A secured loan is not the same thing. Check your paperwork carefully as the wording is key. If you are expected to remortgage you cannot be pushed into a costly secured loan.
Paul
Discharged today the 8th feb 2012. View is much brighter now.
Continuing to rebuild our credit worthiness.
It says remortgage and then in section 3.9 it says remortgage/secured loan. Can someone please advise.
3.7 VALUATION
After month 54 of the arrangement the Supervisors, with my co-operation, will obtain a professional valuation of the property referred to at paragraph 4.2. My co-operation will include (as well as my overall requirement to co-operate) using my best endeavours to complete a remortgage at the earliest opportunity. The valuation obtained for remortgage purposes detailed below will in the absence of an obvious error be accepted as adequate by the Supervisors. I will provide the Supervisors with an up to date redemption statement from the mortgagee(s).
3.8 RELEASE OF EQUITY
I will also obtain two mortgage quotations from reputable brokers and/or mortgage lenders. If my Supervisors are satisfied that one of these quotations demonstrates that I am seeking to remortgage for the maximum achievable, I will accept and proceed with a remortgage in line with the higher of those quotations. An acceptable quotation is one which provides for a remortgage at a maximum of 85% loan to value of the property less the existing secured borrowings “LTV less secured sums” but subject to affordability criteria as detailed below. The sums raised may be lower than the LTV less secured sums if I can demonstrate that the mortgage will result in funds being introduced into the arrangement which equate with either 100% of my share of equity or payment in full to creditors. The amount to be introduced will not exceed 100% of my share of equity.
3.9 AFFORDABILITY
The mortgage offer must take into account my ability to afford the mortgage payments. For the avoidance of doubt, the amount by which my monthly mortgage/secured loan payments increase as a result of the refinancing to release equity, should not exceed more than 50% of the amount of my monthly contribution that I am paying into my arrangement at the time the mortgage offer is obtained.
3.10 RECEIPT OF SUMS IN LIEU OF EQUITY
I will complete the remortgage by the end of the IVA term. The whole of the net proceeds after
the repayment of all existing secured liabilities must be immediately paid into the arrangement. If I am unable to procure any new mortgage facilities, this will not be viewed as a failure to comply with the terms of the Arrangement and my Supervisors will have the discretion to consider accepting alternative proposals including:-
• Third party sum equivalent to the value of my share of equity, or
• A maximum of twelve monthly contributions beyond the 60 month term at the same level as paid in the fifth year of the arrangement.
My IP Kingsgate have got together with Select Partnership and offered me a secured loan of £7,750 plus charges £1992.50 at a monthly payment of £122.63 over 15 years
I agree with plasticdaft ..a remortgage is not a secured loan and I dont see how you can be pushed ino it ....apart from paragraph 3.9 it only talks about a remortgage not a secured loan .
