Could we release equity in our home to finish iva early?

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paul737
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by paul737 » Wed Jan 24, 2018 7:26 pm
Hi , we are in the 4th year of an iva.
We are wondering if we could release equity in are home and offer this the creditors to finish the iva early.
We have a mortgage of 115000 and a secured loan of 28000 the house is worth 200000.
We pay 850 a month on the iva and have 20 months left.
Is it possible to do this and what would be a reasonable amount to offer
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Foggy
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by Foggy » Wed Jan 24, 2018 7:32 pm
There are "early exit loans" available, but not all creditors like them being used. I know Shaun Vickery has access to such products and Ryan Radford might have also. Their details can be found under the "Quick Links" tab ( top left) then under "The Team" on the drop down --- they are in yellow towards the bottom of the list.
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Lisa Thomas
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by Lisa Thomas » Thu Jan 25, 2018 10:34 am
Based on 20 months left your offer would need to be based on future contributions of £17,000.

Have you included the 12 month extension due to the presumed equity clause in your T&Cs?

If not it will be 32 months so closer to c£27k.

I think you will struggle to remortgage due to your credit rating but hopefully Sean or Ryan can help you.
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paul737
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by paul737 » Thu Jan 25, 2018 6:19 pm
Thanks for the reply Lisa.
I was on the understanding that the extra
12 months only comes into effect if you cant remortgage after year 5.
In your opinion is it impossible to get a re-mortgage.
Thanks.
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Foggy
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by Foggy » Thu Jan 25, 2018 6:23 pm
paul737 wrote:
Thanks for the reply Lisa.
I was on the understanding that the extra
12 months only comes into effect if you cant remortgage after year 5.
In your opinion is it impossible to get a re-mortgage.
Thanks.


In a F&F offer you have to assume that there will be an extension, or prove that there won't be. The offer will have to match the extra 12 months or the creditors would simple prefer to hang on for an extra years payments --- you can't head that particula hoop off and you do have to jump through it at some stage.
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Ryan
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by Ryan » Fri Jan 26, 2018 3:19 pm
Hi Paul,

From your figures you are already borrowing 71% of the value of your property so based on the figures that Lisa has quoted it's highly unlikely you would be able to raise the amount required at this stage. Lenders who may lend whilst an IVA is still recorded against you in all likelihood wouldn't look to lend above 65 - 70% of a property's value.
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Shaun Vickery
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by Shaun Vickery » Mon Jan 29, 2018 12:59 pm
Hi Paul, yes it is possible. The amount you would need to offer would generally have to be sufficient to tempt your creditors into accepting it (they are often quite flexible as long as HMRC aren't involved!) but it would also depend on the amount that you are able to raise.
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