www.iva.co.uk

Hi,

Just after a little help please as I'm really confused. We are coming to the end of our fourth year. We were originally told that we would pay four years and then would have to release equity of £20,000 in our house. They told us this meant getting a re mortgage at the end for this amount. Then when we got the final court papers to sign there was just mention of equity release - again when we queried this they told us it meant the same thing - four years payment and then a remortgage for £20,000 at the end.

The company changed hands during our second year and we heard nothing from them (just like the previous company) apart from a welcome letter and everything will stay the same letter.

As we have reached the month which we thought would be our final payment we have started to look for a mortgage and have been told by a bank and a building society they wouldn't give us a remortgage (which we understand). However, yesterday the man we were dealing with also told us (off the record) that it sounded like we would have to go to a non high street mortgage lender with higher rates and stay with them for 6 years until our history is clear and we would then be able to apply to the high street. He also told us that it sounded like we would also have to pay back more than £20,000 as our house had £30,000 equity in it. Our total debt was for £38,000.

Will we have to pay all of this and does that mean that there will be additional supervisor charges as well (which is a joke because they have not been in contact at all). We just want this to be over - just feel we were not told everything in the beginning.

Any help would be gratefully received.

Thanks

Cathy

Hi Cathy
If you look some other post on the forum - this appears to be the one issue that causes concern.
Due the mortgage market at the moment - you may find it impossible for high street lenders to agree to remortgage, even Sub prime lenders are difficult and extremely expensive.
You may find the creditors want to extend the IVA for another 12 months in leu of equity. Check the wording on your IVA contract also speak to your IP direct to set your mind at rest

Cathy -

this £20 000 supposed equity, is this what recently valuations stated, or is this an old amount since the start of the IVA ?

If its an old amount you may find a couple of new valuations may give a more accurate amount based on todays housing market.

If you hang on here - someone else with more experience will advise us both !!

Hi Ginger,

No the £20,000 is what we agreed to pay at the end of the IVA after completing four years of IVA payments.

When we tried to get a mortgage yesterday they used an index linked amount (which they said was the value of the house when we originally bought it and what they thought houses of similar values would be valued at now - which they said left us with about £30,000 equity - but they couldn't help us because we had an IVA).

Rather than computer valuations - some people get a few property agencies around to to preform an actual valuation on the understanding they may want to sell.

Valuation vary enormously - even with the same types of property (ie condition,GCH double glazing etc etc).

Please hang on someone else may have something diffrent to add

It will be almost impossible to get a remortgage and even if available the rates would be penal. Speak to your IP and either extend the IVA by twelve months or if possible introduce a third party lump sum. It would not have to be anywhere near £20-30k and either way you could remain with your existing lender and not be obliged to go down the subprime route.

Hi - thanks for that.

Michael does that mean if we extended and could may be get extra money (say if I could get a second job) and pay extra for the next 12 months then that would be the end of the IVA in total?

Thanks

Sorry - if you carry on paying your IVA does it only last for 5 years max or can it go on after that?

Depends on the wording of the iVA - but because of the mortgage market being as it is - instead of equity release - some peoples IVA are being extended for another 12 months,(same payments) to help increase the payout to creditors.

I belive Mel (Ip on here) has stated in the past that she has dealt with IVA longer than 5 years.

Honesty if you have your IP (personal) email address, it may be worth writing your concerns down and emailing him for clarification

My IVA is over 6 years! I was asked to increase by 12 months due to walking away from a property that had equity in it!

Cathy,

What is the exact wording of the equity clause in your original proposal? given the stage you're at I would guess that yours is not a Protocol IVA.

You need to get an accurate valuation of your property and up to date redemption figures from your mortgage and secured loan(If any) lenders and then look at exactly how much equity you actually have using the 85% LTV calculation.

You also need to see if there is a minimum dividend clause as this may also affect the time that the IVA runs for.

Once you have done this you will be in a much better position to look at your future courses of action and discuss these with your IP.

Hope you get this sorted soon, best wishes.

My iva was over 6 years! I was asked to increase by 12 months due to previously walking away from a property that contained equity without taking any!