Remortgage question

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intrepid

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Post by intrepid » Sun Jun 20, 2010 10:36 pm
Hi all, I am in the fifth year of my IVA and, in order to comply with a clause in the agreement am required to make an equity release of 15k in year five.
I recently contacted my existing mortgage provider and when they heard the reason for applying for the additional funds they immediately advised me that no further funds would be released.
My IVA agreement also contains a clause which suggests that my current IVA could be extended by 12months if a remortgage was not possible.
I contacted my IVA supervisor to advise them of the reluctance of my mortgage provider to release the necessary equity and was advised that they would make enquiries on my behalf in order to source a willing remortgager.
My existing mortgage is currently at what would appear to be an extremely favourable rate of 0.99% above the Bank of England Base Rate (i.e. 1.49% total) and is on a repayment basis.
My two-fold question is this:-
If my IVA supervisor finds a lender who is willing to lend me the additional money at a rate of interest vastly above the current market rates would I be obliged to agree to it and be at risk of breaching the terms of my IVA if I don't agree?
Also, might I be obliged to move my entire existing mortgage to such a lender at an interest rate which will probably be far less favourable than my existing?
Many thanks.
Last edited by intrepid on Sun Jun 20, 2010 10:37 pm, edited 1 time in total.
 
 

Shining

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Post by Shining » Mon Jun 21, 2010 1:17 am
Hi there and welcome to the forum. I am expecting to pay an extra 12 months payment in lieu of the equity return. I'm not sure about you having to agree to change mortgage providors and possibly risk a higher interest charge, but will keep this bumped up for a professional opinion. Well done for getting this far in your IVA x
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Michael Peoples

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Post by Michael Peoples » Mon Jun 21, 2010 9:59 am
You raise a valid point about switching the entire mortgage to adverse rates. However, it is very difficult to obtain any funding while in an IVA unless you have substantial equity.

If this is the case a secured loan would be clearly more beneficial to you but again would be difficult to source. If you are not able to raise the funds or the costs are prohibitive you could ask for an extension or if possible try and get third party funds for a full and final settlement.
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intrepid

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Post by intrepid » Mon Jun 21, 2010 7:15 pm
Many thanks for the comments and thanks for the welcome to the site.
I must say how helpful I have found the forum over the course of the last 4 and a half years. So helpful in fact that I've never needed to register as my queries and concerns have generally been raised and answered by others.
Regarding the remortgage query I guess I will continue to provide whatever information my IVA supervisor needs to pursue a remortgage on my behalf and put my trust in them to limit their search to reasonable lenders lending at current market rates.
Thanks for the help.
Last edited by intrepid on Mon Jun 21, 2010 7:22 pm, edited 1 time in total.
 
 

maister

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Post by maister » Tue Jun 22, 2010 7:47 am
I will be in a similar position with equity in the house.
I am just over a year into my IVA.
I have to supply 2 refusals to lend,then an extra 12 month rule kicks in due to age and the cost and all other factors my IP is already saying that there are very few who can get a re mortgage.
However I am attempting to pay extra each month its difficult so that when the refusals come in I won't have to go down the route of the e4xtra 12 months.

Have you considered going to another reputable lender get the refusal and then submit them both.
 
 

mickyboy

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Post by mickyboy » Tue Jun 22, 2010 7:57 am
I have to remortgage as well in about 40 months. In the current economic situation, i think my IVA will be extended by up to 12 months. At least this way my mortgage won't go up, but i will have to pay an extra possible 12 months. Probably still cheaper than having a higher mortgage for the remaining term.
Can't help thinking that at some time, the rules on equity release will change, to reflect the problems people are having releasing money to put into there IVA's.
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intrepid

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Post by intrepid » Wed Jun 23, 2010 11:18 pm
Had a letter from my existing mortgage provider to confirm their refusal to release further funds.
I will forward a copy to my IP and, having read the helpful posts, will endeavour to seek further funds from a few more reputable 'highstreet' lenders.
At least that will provide proof that I have genuinely been attempting to raise the necessary funds to release equity.
Thanks again.
 
 

kallis3

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Post by kallis3 » Wed Jun 23, 2010 11:32 pm
I think you only have to provide a couple of remortgage refusals.

I doubt if your IP will be able to provide any more help.

You may find that you have to continue for a further 12 months.

Speak to your IP about this.
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plasticdaft

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Post by plasticdaft » Thu Jun 24, 2010 8:58 am
I still maintain that extending the IVA by 12 months is far more favourable than a costly remortgage(sub prime lending doesnt come cheap with high APR,high fees,high costs to get out of the mortgage etc etc). You also keep any equity in the property.
I cant imagine an IP would be able to find a mortgage for you any easier than you could find one yourself,so expect to carry on your IVA payments for a further 12 months.

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Continuing to rebuild our credit worthiness.
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