Lucyl: OK then, in my opinion, based in the info. provided, your IVA concludes after 5 Years - end of. (It does not fail).
Therefore, if I were in your shoes, I would robustly refuse to apply for this extortionate loan. If pressured by my IP, I would have no hesitation in ultimately pursuing a formal complaint and consider legal action against them for 'breach of contract' (it costs nothing to make an appointment with the CAB Duty solicitor to see if this could be a possibility).
Please keep us all updated.
Wish you the very best of luck, and hope you have a successful outcome.
My opinions are just that: Based on my experience and being a self-employed IVA customer.
I have been very interested to read this as next year I have to think about remortgaging and a secured loan was not something that was mentioned. If we had to take out a secured loan we would have to sell our home as there is no way we could afford this in our retirement. My worry is what interest would be lumped on for early repyament.
I think the problem is when you take on an IVA you are desparate and you do not consider this at the time. I do feel it should be spelt our in more detail which I did not feel happened in my case. I was told don't worry about it your IVA will just be extended for 12 months but I now realise this may not be the case.
We have just had to go down the remortgage route and, of course, it was impossible. A secured loan was never mentioned (probably wouldn't get one anyway as we already have three charges on the house) and we've just been told to carry on for the extra year.
For those who are interested in this thread, secured loan is being offered at 16.9% variable or 18.4% fixed. Quite a bit different to if we re-mortgaged at our current rate of 4% abr!
Even if we successfuly remortgaged as a high risk debtor ( we have never missed a mortgage payment) I would doubt it would be at a rate close to the secured loan rate being offered.
Why does your IP feel that a secured loan is suitable for you Lucy - and have they recommended you to a particular company which can provide this finance?
Really? Don't know who gave you that impression, but it sounds like you are being led by your IP / proposed loan provider.
That exceeds the UK's highest ever recorded mortgage rate offered in 1990 at 16.9%apr (15.4% was pretty typical at the time I recall).
It's fair to say though, that remortgaging in your current position will, if other threads on this forum are correct, be nigh on impossible.
Of course its up to you if you want to pay £3K to arrange this product. Personally, I recommend you seek an independent legal opinion on the position of being required to do so by your IP.
Best of luck.
My opinions are just that: Based on my experience and being a self-employed IVA customer.
...I suppose when you could get a decent house for £50-70K, it was within reach. Especially as is was about 3x your income, rather than 5x your income today.
My opinions are just that: Based on my experience and being a self-employed IVA customer.
We have been approached by a specific broker/lender who was introduced to us by our IP.
As yet, we have not approached any high street lenders or valuers to attempt a remortgage of our own back.
We would appreciate advice from any IPs who know about this process or any other IVA clients who have gone through this process in respect of how many lenders and which ones to approach etc
There are very few lenders who will remortgage in an IVA and recently one product was withdrawn due to a backlog of applications. The rate was just shy of 9% for a total remortgage which may well work out a lot more expensive than a secured loan. I am not sure what the fees were but I doubt if they were anywhere near £295.
If property prices rise and the mortgage market improves there will be plenty of people in for a shock when they assume they can extend by twelve months but will be obliged to remortgage.
Maybe so, but not sure it is fair to move the goalposts at this late stage by introducing a totally different product in to the mix, particularly when it has not been mooted as a possible requirement at any point over the past 5 years.
We would expect a higher interest rate on a remortgage than the average man on the street with a good credit rating, but surely by expecting people to start out on a variable rate of 16.9, lenders are setting up many people to potentially lose their homes. Where is the sense in that?
I guess there will be scenarios where a mortgage will be more costly than a loan and vice-versa. Both are usually more costly than extending IVA payments for another 12 Months.
Also who is to say what will happen in 3-4 Years time? As Michael point out, prices could increase, and mortgage companies might relax lending criteria for those of us in IVAs etc.
Surely the consideration in present day is: If you have a choice to take a high-interest secured loan, in lieu of (however unlikely), being offered a re-mortgage offer, as it is cheaper, then great!!!
But as widely discussed on this forum, the chances of getting a remortgage in an IVA seems almost impossible. Thus in most cases, 12 month extension it is if you have the required equity and meet whatever other lending criteria apply, IVA ends if not.
However in this case, the issue now seems to be an IP requiring their IVA customer to take out a secured loan (in breach of the contract terms), rather than offering a choice to do so. The customer, as per their contract, feels that the IVA should instead end - and rightly so!!!
My opinions are just that: Based on my experience and being a self-employed IVA customer.
