Remortgage & offer

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Post by tracy3167 » Fri Apr 15, 2022 2:30 pm
I am at month 54 of my IVA and was asked to raise £64K equity on a remortgage: my outstanding mortgage is £38K so I needed to borrow £104K to cover everything associated.
The IVA came about due to a 15 year business going under due to fraud. Myself and two business partners had guaranteed an RBS business loan, the rest of the outstanding debt went with the business:
One building society came back with an offer to lend £86K but the monthly repayments would have been too high.
The IVA requested I go back and ask for an amount to bring the payments down to £604 pm.
On making a formal application they have due to affordability and me still having to pay my IVA until Sept only offered a sum of £44k. Repayments of £485pm.
Once the existing mortgage is repaid, early redemption fees and other associated remortgage fees are taken into account an available sum of £1700 remains to offer the IVA.
This information has been sent to the IVA practitioner yesterday for review.
I am 100% expecting them to reject it as if I were to remain on the IVA for the 12 month extension they would receive a further £6K.
However I have 2 questions.
1. If they accept the remortgage sum how am I to afford the repayments of both the IVA and increased mortgage payments? They will have gone up by £200 on what I pay now.
My second question is if they do not accept the remortgage amount my mum has said she may be able to lend me £6500 from her small savings (she’s a pensioner) however due to current rising costs she is only prepared to lend it to me if I can start paying her back at the end of the year. That would only be achievable if the IVA was to end in Sept.
Would it be worth offering this sum to the IVA? Would they consider accepting this as it is only £500 more than if I was to stay in the IVA an extra 12 months and if they accepted it would that terminate the contract after the last payment in Sept? The only benefit to them would be getting their money sooner and a little bit extra.
I have no other options to borrow money but wondered if it would be worth making the offer once I hear back from them regarding the decision on the remortgage.
I have made prompt payments throughout and complied with all aspects of the IVA contract.
Thanks in advance


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Post by Foggy » Fri Apr 15, 2022 3:43 pm
Remember when checking the remortgage --- the usual terms limit this to a maximum of 85% LTV. They also limit the term, which cannot extend beyond the latter of the current term or state retirement age. Also the increase due to the extra lending cannot be more than 50% of the current IVA payment. Usually, by the time this is all finalised the IVA will be close to the end anyway, so you don't end up paying both.

See what they say about the equity amount and, if they go for the extension, think about a full and final lump sum then.
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014


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Post by tracy3167 » Fri Apr 15, 2022 4:29 pm
Thank you, will hopefully hear back from them next week with what they propose
I have just turned 55 so the mortgage term can only be over 11 years and the interest is 6.74% on the 44K being offered. 🙈
If they wish to take that sum I assume I could borrow that amount from my mum instead? Just wondering as my current mortgage interest is 2.59% and ideally would like it to remain that.
I was going to hold back offering any monies until the remortgage decision had been made. I suppose if they extend to the 12 months I have nothing to lose by offering it then but only if they can confirm if accepted the IVA will terminate in Sept.
Just want this bit sorted out where the house is concerned. If they accept a figure after that or I stay on for the extra 12 months at least I know I am in the end zone. This apart from the very start I had been the most stressful bit of it all.
Thanks again


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Post by bowline » Mon Apr 25, 2022 8:17 am
if money is paid in equity release (or as a lump sum in lieu of releasing equity) then your IVA should end at the 5 year point. You don't have to pay another 12 months as well.
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