www.iva.co.uk

what happens when you have to remortgage in year 4 to 5, if your existing lender wont lend to you and you are happy with them, can you be forced to use the iva companys reccomended lender at a higher interest rate?

Hey casper90, welcome to the forum. An expert will be along shortly to answer that for you, hang in there. Viki X

Most certainly not - as there could be a hint of a conflict of interest here. Shop around and find the best deal available for you at the appropriate time.

You should be speaking to an independent financial advisor. I would be surprised if there is anything in your proposal that states that you should use the IVA company's mortgage advisor.

It will depends what your proposal and modifications state, but just speaking to your original mortgage provider who turns you down may not be acceptable

thanks for the prompt reply, my iva started in july 2006, my total debt all unsecured was £132,000, total to be repaid is £62,000, including an equity release in year 4 to 5 0f £31,000, 75% of equity at that time, i have been with my lender, barclays/woolwich for a long tiome and i have a base rate lifetime tracker linked to my current account of base rate plus 3/4, i dont think any other lender is likely to offer me anything like that, there is an affordability clause in the iva (payplan) but who determines what is fair, as i would have to swap my whople mortgage of £103,000 as well im assuming therefore paying increased increased interest charges on the whole mortgage, also if you remortgage in year 4, your mortgage payments will increase, is this increase deducted from my monthly payments for the remaining year year left on the iva, payplan very vague on the issue whenever asked, your forum is very informative, just love to have time to read all the postings!

Hello Casper and welcome to the forum. I am sorry to hear your IP firm's 'vagueness' re the 4th year equity release. My proposal ( drafted by Melanie Giles) is crystal clear on the subject. It says:

‘ Monthly contributions may then cease in order to accommodate an increase in mortgage payments and the supervisor may take steps to conclude the arrangement having first written to creditors to ensure there are no objections to the IVA being completed early’

Could your IP not do the same?

Hi Casper

I would get the house revalued to find out what it is worth now,realistically priced for a quick sale!!
If it isnt worth as much as you thought,you might not have to remortgage.

Some flats in some areas have dropped 30% in the last year or so.

The mortgage increase will be deducted off your IVA payments, which is fine whilst your in the IVA,but once you leave Barclays it will sadly be years before you get a rate to match!
Im with barclays and I looked at moving to another lender and borrowing another £15k to do my full and final...my mortgage would have rocketed from £950 to £1,650 !!!

I wouldnt leave Barclays without a fight...maybe agree to add an extra year to your IVA if your valuation is a little low!! (worth it ,to keep your good barclays rate!)

that was my thoughts, if house prices drop dramatically over the next 2 years, (i must be one of the few people hoping they do!)then i would be unable to remortgage for the full £30k, and i would hope to extend the iva for another year to compensate, i think a lot of people in iva's with equity release clause will find themselves in this position which could be beneficial!i will dig out my iva proposal and check the wording myself, though i havent had any problems with paypal and i have kept my monthly payments at £531 after 2 reviews, a lot better than the £2600 which were the minimum payments i was paying on the 15 credit cards id maxed out trying to rob peter to pay paul!its nice to find so many people in this position on this fantastic forum, i just wonder if the lenders and iva companies study it too for information to their benefit!

I dont think lenders are hunting for customers at present...its more the other way round!