About to finish our iva in September and doubts about releasing house equity

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Cookie
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by Cookie » Tue May 23, 2017 2:48 pm
Hi we are about to finish our iva in September. They have been in touch about releasing equity in our house . They haven't really explained this to us so don't understand it. I've heard that if we can't then we would be offered a loan. Which will put us back in debt is this correct?
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Foggy
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by Foggy » Tue May 23, 2017 4:16 pm
Hi -- have a read of your proposal as these clauses do differ slightly.

Essentially -- at month 54 you need to get the house valued and work out if your share of equity is more than £5,000. If it is then you should attempt to remortgage to release equity. If this fails, as it usually does, the IVA will be extended by a year. Some companies try to push you down the secured loan route, which, unless your IVA started after 2014, they cannot usually force you to do.
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Lisa Thomas
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by Lisa Thomas » Wed May 24, 2017 8:19 am
After checking your proposals the key is to get a valuation done first to establish whether you have more than the standard £5k of equitable interest. If you don't this won't affect you and your IVA can finish (as long as all other assets etc dealt with).

If it does apply you will likely have your IVA extended for 12 more months of payments as Foggy states.

https://www.youtube.com/edit?o=U&video_id=PHfc85n39U4
Cookie
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by Cookie » Wed May 24, 2017 9:05 am
Hi thanks for the reply my original mortgage was for £70000 the value of the house is around £100000 so I'm guessing we will have to try and remortgage? They haven't really gave us much help explaining it when I've asked
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Ryan
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by Ryan » Wed May 24, 2017 9:12 am
Hi Cookie,

If you were to contact us we would be happy to explain the possible re-mortgage options and timeframes.

Regards
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Lisa Thomas
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by Lisa Thomas » Wed May 24, 2017 10:35 am
Depending on which calculation method is applied to your IVA then if you can get the valuaiton down a little (and presuming ownership is 50:50) you might be able to argue you have less than the £5k...
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Shaun Vickery
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by Shaun Vickery » Wed May 24, 2017 2:11 pm
Based on the figures you have provided it looks as though you will be expected to try to re-mortgage. What will be required by your IP does vary from firm to firm so it might be worth you asking them for guidance at this stage.

Sometimes it's possible to offer a 'full and final' sum (if for example you are able to raise funds somehow). It's always worth weighing up all of your options.
Cookie
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by Cookie » Wed May 24, 2017 2:58 pm
Ok thanks for replying all. How can we remortgage though if in a iva didn't think it would be possible?
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Shaun Vickery
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by Shaun Vickery » Wed May 24, 2017 3:01 pm
It may be possible but it will depend on your individual circumstances. Equally, as I said earlier, what your IP expects you to do or requires from you will depend on which firm you are with.
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Foggy
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by Foggy » Wed May 24, 2017 3:15 pm
Cookie wrote:
Ok thanks for replying all. How can we remortgage though if in a iva didn't think it would be possible?



Years ago when lenders were being more "optimistic" it was possible. During the last few years, impossible and, lately, highly improbable ......
The market is changing all the time ( which is why the clause remains in the proposals ). Currently, however, a few IP's don't even require you ti produce evidence, but most do. You need to see what your own IP requires.
Cookie
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by Cookie » Wed May 24, 2017 3:33 pm
Thanks all for making it a bit clearer. Will wait to hear back from them
Cookie
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by Cookie » Fri Jun 02, 2017 2:49 pm
Hi finally heard from them. We currently have £13000 left to pay and valued the house at £115 which untrue value as looked myself and it's estimated £97000. We can't remortgage so are offering a secured loan over 13 years which what they want back amounts​ to £33000 . So basically add another £33000 debt to the original £26000. I can't afford to do that at . Any help on what I can do please
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Foggy
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by Foggy » Sat Jun 03, 2017 2:34 pm
Assumimg that you have not agreed to any variation accepting 2014 terms and conditions they cannot force a secured loan on you ... you need to attempt to remorgage and, when this fails, a 12 month extension will be applied --- again, assumimg you agree that you do have more than £5,000 equity and do actually trigger the release clause in the first place.

Do not be bullied and ask them to explain any figures they have used.
Cookie
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by Cookie » Sat Jun 03, 2017 3:21 pm
Hi I can remember them asking us to sign something a while ago but just said nothing to worry about just to keep up with records and to help to the end of agreement to run smoothly. I'm beginning to worry this is what they have done they never told what it actually entitled . As I would have never agreed to it . This might not be the case hopefully but they never seem to tell you the full story. This is why I'm having to ask on here. Thanks for your advice much appreciated
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Foggy
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by Foggy » Sat Jun 03, 2017 3:27 pm
Hi Cookie -- I am afraid that there have been many instances of "less popular" amendments being hidden behind a juicy carrot ! Let us hope this was not the case here, but an update to the 2014 Protocol, for instance, seems to be a popular one.
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