i am in an iva but dont understand the re mortgage bit
it says the amount of equity released will be based on affordability
re mortgage will be a maximum of 85% loan to value
the incremental cost of remortgage will not exeed 50% of monthly contrubtion
caps on total equity release not to exeed 100% of outstanding unsecured liabilities.
as i am in a interest only mortgage i probably wont have much left over as i have zero equity now.
does this mean in three years they stick the agreed extra year on then the building society kick us out of our home at retiring age,all because i changed to interest only mortgage to try to pay creditors before my iva.
maybe i shouls have just gone bankrupt,or can i still do this...
jake
It is confusing a bit as there aer so many rules involed, but basially what you've typed is it.
if you house is worth say £92500 then the mortgage company will only loan upto 85% of the worth of the house. This is then £78k If you owe £75k then you have £3k equity.
Our proposal says that anything over £5k equity is required, so this £3k is too low, therefore the iva would conclude at 60months
If for instance there was £10k equity you would have to try and get a re-mortgage for the bit that is requested, this can not increase your monthly mortgage payments by more than half your IVA payment. So if you paying £200 IVA your new mortgage payment can not increase by more than £100.
If you are lucky enough to find a company that will loan you the re-mortgage then thats paid over and thats the end of your IVA.
If, as most of us will find, you are not able to get another mortgage then you will have an extension of up to a year on your IVA.
Hope that makes it a bit clearer.....it took me a long time to get this straight in my head. And I've not yet had my creditors meeting LOL
You can still go bankrupt, and if you have negative equity in your property this might be more sensible if you are taking a long term view about property ownership. Who advised you to go to an interest only mortgage, and surely the equity release provisions were carefully explained to you prior to you agreeing to sign your proposals.
