Couple of questions regarding repaying payment break and remortgaging

[Andy.79]

Couple of questions
1. I had a payment break of 3 months when I was paying £577.50 per month now I'm being told that when I finish IVA 03/17 I have to pay that 3 month break at my current monthly sum of £721 is this right? Doesn't seem fair
2. Am I right in saying that if I can't remortgage I may have to pay another 12 months towards IVA

[kallis3]

Hi and welcome,

You should be paying back just the payment break as far as I am aware so that does seem a little high.

Have you had your house valued? Is there equity and what does it say about remortgage in your paperwork.

[watzki]

It should be what you were paying at the time.
We had a month payment break when we were paying £622
Now we pay £572 but we have to pay £622 at the end for the payment break
They can't have it both ways,stand your ground and tell them it's unacceptable to have to pay more

[Foggy]

As above, you should make up the monetary shortfall only. So pay the rate at the time of the break.

[Andy.79]

I have spoke to them and they read a clause out from my iva which you could interpret anyway you'd like,
Basically that my supervisor is allowed to give me a one off payment break up to 6 months as long as it's added on at the end of the iva which I have no problem with at all, I begrudge paying back £721 a month x3 when I was £577.50 at the time. How can I tackle the issue?
Kallis3- I haven't had my house valued yet October apparently, my iva says "if I am unable to obtain a re mortgage for any reason, supervisor has the discretion to implement one of the following 1. A 3rd party sum equivalent to 85% of the value of my interest in the property or extend the iva by 12mths with the aggregate sum paid to him being limited to 85% of my interest in the property, what ever that means! Help!!

[Lisa Thomas]

The point of the break is to allow you to make up the arrears, which would be based on the sums due at the time. I don't feel your IP is being fair or commercial on this point. I would challenge and potentially take it further as a formal complaint.

The equity point options are:

1. Remortgage (virtually impossible)
2. Find a third party to pay lump sum in lieu of the equity
3. Extend your IVA for 12 months of further contributions in lieu of the equity

These usually only apply if your equity is over £5k so in the first instance consider getting another valuation.

[Andy.79]

So it will only be extended if they find I have equity in my house and I fail to remortgage it?

[kallis3]

Usually, but you may find that you have to take out a secured loan if that is what it says in your paperwork.

[Lisa Thomas]

Yes unless as Kallis says you have terms about the secured loan but I think this may be a more recent term.

[Andy.79]

Hi finally had my house valued, it's been valued at £150k,
So am I right in saying that they will value my property at 85% of this, which would make it 127.5k?
My mortgage balance is approx 125k so does that mean there is no equity in my house?

[kallis3]

Hi,

Speak to your IP company and let them know the valuation and see what they say.

[Andy.79]

Ok thanks very much, just a bit confusing to say the least

[kallis3]

You should get a proper figure as to the amount owing on your mortgage.

[Foggy]

MOST will work out equity thus:

Valuation £150,000
85% = £127,500
Less secured lending, say, £125,000
Equity = £2,750
No release and no extension.

SOME use this method:

Valuation £150,000
Less secured lending, say, £125,000
Equity = £25,000
85% = £21,250
Attempt to release or 12 month extension applies.

As you can see, very different results! Which method they use should be detailed in your paperwork, either by reference to the Protocol (annex 6 or 7) or, better still, with a worked example. Some proposals are conflicting and you might need to stand your ground.

So .... you need to gather accurate figures as well as read and re-read your equity release clauses so you know them inside out.

[Andy.79]

The exact wording with regards to my equity release is as follows

At the review date I will obtain a valuation of my property. If that valuation shows that 85% of my interest in the property (after deducting my share of the mortgage and/or secured loans) is less than £5k ( net of all costs to take out a new mortgage) then I need contribute no more to the arrangement.

If that valuation shows that 85% of my interest in the property (after deducting my share of the mortgage and/or secured loans) is above £5k or more (net of all costs to the out a new mortgage loan) then I will seek to remortgage my interest in the property and introduce this money into the arrangement.

Any advice greatly received as to which way they will work my equity out?