What options are there instead of equity release

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paul822
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by paul822 » Thu May 17, 2018 10:32 am
My wife and I have a joint IVA (most of debt was business related) and we're approaching 6 years. We have plenty of equity in our home and are aware that we will have to look at a possible re-mortgage to release funds. As others have mentioned, it is unlikely that our current provider and other high street lenders would entertain lending us more money but I believe there are other options which the IP can suggest. I was wondering what these are and whether we are obliged to use them?
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Foggy
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by Foggy » Thu May 17, 2018 11:11 am
If you have the pre- 2014 terms they usually only offered the choice of remortgage if possible or extend if not. Later versions introduced secured lending. However the trend amongst a few firms is to now get an outside firm like Select or Perinta to examine the possibility of secured lending for an early exit loan -- which is used as the basis for a full and final offer to end the IVA early. Sometimes the figures do seem to stack up, but not always. If you have the earlier terms they cannot force other alternatives on you, but it is always worth exploring.
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Lisa Thomas
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by Lisa Thomas » Thu May 17, 2018 11:14 am
NB you will have interlocking IVAs, not a joint one.

The equity clause usually kicks in after year 5, not 6 on most standard IVAs - was yours always meant to be 6 + 1 instead?
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paul822
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by paul822 » Thu May 17, 2018 11:22 am
Lisa Thomas wrote:
NB you will have interlocking IVAs, not a joint one.

The equity clause usually kicks in after year 5, not 6 on most standard IVAs - was yours always meant to be 6 + 1 instead?


We were told from Day one that our IVA would be 6 years and that there was an equity release clause, but no other methods were mentioned.
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paul822
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by paul822 » Thu May 17, 2018 11:25 am
Foggy wrote:
If you have the pre- 2014 terms they usually only offered the choice of remortgage if possible or extend if not. Later versions introduced secured lending. However the trend amongst a few firms is to now get an outside firm like Select or Perinta to examine the possibility of secured lending for an early exit loan -- which is used as the basis for a full and final offer to end the IVA early. Sometimes the figures do seem to stack up, but not always. If you have the earlier terms they cannot force other alternatives on you, but it is always worth exploring.


As we have so much equity in our house I would prefer to extend our agreement by a year rather than add a large sum to the mortgage. Another factor is that our son goes to University in September which would mean our payments in the last year reducing as we will have to support him - he will get minimum maintenance loan due to our income.
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Lisa Thomas
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by Lisa Thomas » Thu May 17, 2018 3:44 pm
Are you sure it hasn't already been extended and you are already in the final year?

Please check your terms to see if it was definitely 6 years plus the year extension or 5 plus a year.
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Shaun Vickery
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by Shaun Vickery » Thu May 17, 2018 4:57 pm
It very much depends upon who your IP is as to what they will require but I would keep your mind open to the options available to you before you jump to any decisions.
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paul822
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by paul822 » Fri May 18, 2018 9:33 am
Lisa Thomas wrote:
Are you sure it hasn't already been extended and you are already in the final year?

Please check your terms to see if it was definitely 6 years plus the year extension or 5 plus a year.


It was definitely a six year agreement from the start - can't remember whether this was because it was joint or because it involved business debt.
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paul822
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by paul822 » Fri May 18, 2018 9:36 am
Shaun Vickery wrote:
It very much depends upon who your IP is as to what they will require but I would keep your mind open to the options available to you before you jump to any decisions.


Its Aperture.

I don't see there much of an issue between which is my favoured option - a lump sum of approx. 30K which goes on to my mortgage and which I'll be then be re-paying for the rest of its term, or another year paying a reduced amount because of the change in circumstances (a second child at University).

I'm just concerned that we could be coerced into taking out a secured loan if, as I expect, the high street mortgage providers refuse an application to re-mortgage.
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Lisa Thomas
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by Lisa Thomas » Fri May 18, 2018 10:12 am
Given the age of your IVAs I doubt the secured loan would have formed part of the terms and if so doesn't need to be considered. You really do need to look at both IVA proposals and any mods.
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kallis3
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by kallis3 » Fri May 18, 2018 10:44 am
What does it say in your paperwork?
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Shaun Vickery
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by Shaun Vickery » Mon May 21, 2018 11:05 am
It may be that my firm will be involved in the review but if, as you say, you have a significant amount of equity in your property then a re-mortgage might well be a realistic property and what was included in your proposal. If however a second charge mortgage is a better option then it's well worth keeping your mind open to other options.
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paul822
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by paul822 » Tue Jun 26, 2018 11:51 am
Lisa Thomas wrote:
Given the age of your IVAs I doubt the secured loan would have formed part of the terms and if so doesn't need to be considered. You really do need to look at both IVA proposals and any mods.

Ok, sorry for coming back to this after a while.

I've checked my paperwork - IVA started on 28/9/11 with a projected final payment of 28/9/2018 - seven years not six. The final payment is now 28/10/18 due to a month where we had massive car bills. The equity release/additional 12 months is in there.

The agreement only mentions equity release via a re-mortgage NOT a secured loan, which is good news. However, I've had no communication from them at all regarding starting the process of valuing the house and seeking a re-mortgage. Do they have to remind you or should I just crack on. Its Aperture and they're rubbish at communicating. Should I e-mail them to let them know I'm starting the process?

Finally, I'm hoping the agreement is extended as we have a lot of equity in the house but with my son going to University in September we won't be able to pay the same amount as now, and this is a stipulation of the agreement. is the final year, following a failure of equity release, subject to an income and expenditure review?
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Foggy
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by Foggy » Tue Jun 26, 2018 12:10 pm
Why was it a 7 year term from the start ? It is usually 5 or sometimes 6, with the potential for a further 12 months in lieu of equity release ?

There should be a review twixt the final basic term and the extension term, but any reduction would need to be agreed by creditors, and such agreement may not be forthcoming.

Aperture are not known for responding to clients, but I would contact them and ask them what they require in this regard --- they sometimes engage a third party to carry out the equity release exercise for them.
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paul822
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by paul822 » Tue Jun 26, 2018 12:23 pm
Foggy wrote:
Why was it a 7 year term from the start ? It is usually 5 or sometimes 6, with the potential for a further 12 months in lieu of equity release ?

There should be a review twixt the final basic term and the extension term, but any reduction would need to be agreed by creditors, and such agreement may not be forthcoming.

Aperture are not known for responding to clients, but I would contact them and ask them what they require in this regard --- they sometimes engage a third party to carry out the equity release exercise for them.



Yes, it was a seven year term from the start - this was explained as necessary because of the existence of personal and business debt.

I will contact them today but start the equity release process in any case, having read some other posts on the forum as I don't want to extend this nightmare any further than is necessary.

If they won't accept a reduced amount from September I'm not sure what will happen - my son's education should not be curtailed because of the sins of his parents and I can't pay what I don't have.
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