My father-in-law wants to build an extension to our home

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steve716
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by steve716 » Wed Sep 20, 2017 3:52 pm
hi, we are currently in our 3rd year of an IVA, my wifes father has become unwell and we have offered for him to move in with us, he will sell his home and want to build an extension / granny annexe to our home, how will this affect our equity from the property when we are near the end of the iva?
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Foggy
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by Foggy » Wed Sep 20, 2017 3:59 pm
steve716 wrote:
hi, we are currently in our 3rd year of an IVA, my wifes father has become unwell and we have offered for him to move in with us, he will sell his home and want to build an extension / granny annexe to our home, how will this affect our equity from the property when we are near the end of the iva?



It will increase the value of your home and therefore your equity --- if you are able to release equity come the time the sum will be higher (or on a secured loan, if your IVA requires this). If you are granted a 12 month extension in lieu (usual in cases where remortgaging is impossible) it will make no difference. Would it be possible for him to offer a small lump sum from the sale proceeds to do a Full and Final on the IVA, getting it out of the way --- you could then repay him with what used to be your IVA payment.
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Michael Peoples
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by Michael Peoples » Wed Sep 20, 2017 4:16 pm
Foggy's idea is a good one as at least the IVA will cease. If he wants to proceed he would need to take legal advice and perhaps register a charge against the property for any works/improvements carried out. Closing the IVA is the best idea as otherwise I would suggest legal advice would be needed all round.
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Lisa Thomas
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by Lisa Thomas » Thu Sep 21, 2017 9:04 am
I agree - if possible get him to gift you money to end the IVA early (based on number of remaining contributions plus potential year extension in lieu of equity over £5k) then you can do what you like with the property.
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