What has been people's experience of being able to release equity for IVA?

Get expert opinion. This is the place for new questions to be posted.
10 posts Page 1 of 1

mike709

User avatar
Posts: 12
Joined: Sun Aug 18, 2019 6:34 am

Post by mike709 » Tue Apr 28, 2020 10:29 am
Hi All

Wonder if you could offer any advice.

I am about to start my IVA in June but am a little concerned on the Equity release/loan clause

My house has been valued at 209,000
I have about 136,000 still to pay on Joint mortgage (My partner is not included in the IVA and only need to release my share of 85% of equity)
I have 20 years left on my mortgage taking me to the age of 59
My debts are 38,000
I pay £290 back each month which will pay back 17,880 back - over 5 years
Stepchange is the IVA provider

I have gone on another website (debt camel which i found a link on this website) - that has a calculator which has helped a little to work out i would have the equity to pay the debt.

My question is whilst i can appreciate no one can look into 5 years into the future what has been people's experience of being able to get credit/remortgage/loan to pay of the remaining debt?

My worry is that if i get remortgage for the remaining £20,000 this will end up costing me more then my original debt with interest with all the step changes fees/mortgage interest and i end up paying for longer. Rather then a payment plan which would take 9/10 years

I notice questions have been raised on the forum relating to this subject but cant find the specific advice I require that has also been answered recently.

Many Thanks for any advice given

kallis3

User avatar
Forum Expert
Posts: 76004
Joined: Mon Mar 17, 2008 4:02 pm
Location: United Kingdom

Post by kallis3 » Tue Apr 28, 2020 10:39 am
At the moment, it is highly unlikely, but, as you say, who knows what will happen in five years time.

The other option is a secured loan.

With the amount of equity you have, have you thought of equity release rather than an IVA? You get rid of your debt and have no mortgage to pay.
Sharing from experiences of dealing with debt
The greatness of a man is not in how much wealth he acquires, but in his integrity and his ability to affect those around him positively.
Bob Marley.
http://kallis3.blogs.iva.co.uk

Foggy

User avatar
Forum Expert
Posts: 31366
Joined: Fri Dec 17, 2010 11:14 am
Location: United Kingdom

Post by Foggy » Tue Apr 28, 2020 11:43 am
Even if you have, say, £20,000 equity to release, the loan you gat will be limited by the term --- end of current mortgage of state retirement age, whichever is later, as well as the repayment amount, being half of the then IVA payment. Those glass ceilings could also limit the amount available, as can the interest rate --- a crippling rate of interest will lessen the amount you can borrow and you re-finance the loan after the IVA is completed, to a healthy rate. Currently extensions are more common than equity releases, but this changes daily.
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
http://foggy.blogs.iva.co.uk

mike709

User avatar
Posts: 12
Joined: Sun Aug 18, 2019 6:34 am

Post by mike709 » Tue Apr 28, 2020 1:00 pm
No to be honest never thought of Equity release

The subject of the house is a delicate one as my partner wants no involvement with the debt - albeit she sighed a form agreeing to the proposal on the house.


Tue Apr 28, 2020 10:39 amkallis3 wrote:
At the moment, it is highly unlikely, but, as you say, who knows what will happen in five years time.

The other option is a secured loan.

With the amount of equity you have, have you thought of equity release rather than an IVA? You get rid of your debt and have no mortgage to pay.

mike709

User avatar
Posts: 12
Joined: Sun Aug 18, 2019 6:34 am

Post by mike709 » Tue Apr 28, 2020 1:02 pm
Okay thanks for your advice - thats what i thought .. in which case i still think i am making the right decision at this moment in time
Tue Apr 28, 2020 11:43 amFoggy wrote:
Even if you have, say, £20,000 equity to release, the loan you gat will be limited by the term --- end of current mortgage of state retirement age, whichever is later, as well as the repayment amount, being half of the then IVA payment. Those glass ceilings could also limit the amount available, as can the interest rate --- a crippling rate of interest will lessen the amount you can borrow and you re-finance the loan after the IVA is completed, to a healthy rate. Currently extensions are more common than equity releases, but this changes daily.

kallis3

User avatar
Forum Expert
Posts: 76004
Joined: Mon Mar 17, 2008 4:02 pm
Location: United Kingdom

Post by kallis3 » Tue Apr 28, 2020 1:04 pm
Do you have any join finances? If so then an IVA will impact on her credit record.
Sharing from experiences of dealing with debt
The greatness of a man is not in how much wealth he acquires, but in his integrity and his ability to affect those around him positively.
Bob Marley.
http://kallis3.blogs.iva.co.uk

mike709

User avatar
Posts: 12
Joined: Sun Aug 18, 2019 6:34 am

Post by mike709 » Tue Apr 28, 2020 2:53 pm
The mortgage is in joint names / other then that we dont have any bank/finance accounts in both names
Tue Apr 28, 2020 1:04 pmkallis3 wrote:
Do you have any join finances? If so then an IVA will impact on her credit record.

kallis3

User avatar
Forum Expert
Posts: 76004
Joined: Mon Mar 17, 2008 4:02 pm
Location: United Kingdom

Post by kallis3 » Tue Apr 28, 2020 3:39 pm
It will impact on it hopefully not too much.
Sharing from experiences of dealing with debt
The greatness of a man is not in how much wealth he acquires, but in his integrity and his ability to affect those around him positively.
Bob Marley.
http://kallis3.blogs.iva.co.uk

abbiesmum2003

User avatar
Posts: 950
Joined: Sun Dec 02, 2012 8:50 pm
Location:

Post by abbiesmum2003 » Tue Apr 28, 2020 4:04 pm
Try not to worry about it too much. As long as you know it needs to be considered in 4.5 years time. So many people seem not to know then get a shock towards the end.
So much can and will happen in that time frame noone will be able to say for sure.
From my experience, we completed our 60 payments and had £70k equity in house. Due to the multiple clauses in the equity release feature we only released £8k to finish our IVA.
You might have £20k equity now but it certainly doesnt mean youll release all that to the IVA.
Cross that bridge when you come to it, just remember its your responsible towards the end to prompt about it-so get the valuations and mortage redemption figure etc. Its not down to IVA company to remember. Its your IVA, not theirs.

mike709

User avatar
Posts: 12
Joined: Sun Aug 18, 2019 6:34 am

Post by mike709 » Tue Apr 28, 2020 6:14 pm
Thanks for your advice
Tue Apr 28, 2020 4:04 pmabbiesmum2003 wrote:
Try not to worry about it too much. As long as you know it needs to be considered in 4.5 years time. So many people seem not to know then get a shock towards the end.
So much can and will happen in that time frame noone will be able to say for sure.
From my experience, we completed our 60 payments and had £70k equity in house. Due to the multiple clauses in the equity release feature we only released £8k to finish our IVA.
You might have £20k equity now but it certainly doesnt mean youll release all that to the IVA.
Cross that bridge when you come to it, just remember its your responsible towards the end to prompt about it-so get the valuations and mortage redemption figure etc. Its not down to IVA company to remember. Its your IVA, not theirs.
10 posts Page 1 of 1
Return to “Ask IVA Forum and Industry experts”