iva 4th year dilema

peter1977

hi all i new so hello
my partner ad i are in our 4th year of a iva we been told we got to get settlement figures for secured loan and mortgage get house valuation and remortgage offers to see if any equity is in the house to pay of creditors.
trying to do reserch on the net to found out what happens if we cant remortgage was told that the iva company might sell the house and release equity that way and i would lose my home (we have to children as well ) cant bear the thought of that though. other way was extend the duration by paying another 2 years. now my heads in a mess thinking what have i done and im worried gonna lose my house has anyone else been through this
many thanks for your time

trudij

Dont quote me on this, cos Im not a homeowner,so its not an issue - but Im sure one of the reasons an IVA is better than bankruptcy for a lot of people is that they WONT have to sell their home?

hope you get it sorted soon x

Nargleblast

When organising my IVA I was informed that if I could show that I was unable to release any equity, then either I could extend the IVA for a year, or maybe get a family member or friend to chip in a lump sum to help out. As Trudij said, the point of an IVA is to protect your home whilst sorting out your debt situation, so your home should be safe, unless you go bankrupt, when your home would be at risk. Even if you did release some equity the IVA firm would only insist on that if your revised mortgage payments were at a reasonably-affordable level (it should say in your terms and conditions what the maximum revised payment allowed would be). Your IVA company should advise you when it is time to start looking into releasing equity,(about 4ys 6mths in) and inform you of the procedure to follow.

Charco_2

There will be a limit on how much your mortgage payments can be increased by - usually half your monthly contributions.
ie if you pay £250 per month to your IVA, then your mortgage payments can only increase by £125.

You'd probably be better off making extended payments to your IVA for a year (or two if that's what they are saying).

(Go through the figures for yourself, have a look at what sub-prime mortgage rates would be and apply them to your own mortgage use this mortgage calculator to see the effect http://www.bbc.co.uk/homes/property/mortgagecalculator.shtml) To re-mortgage you would probably have to go to a sub-prime lender at a worse rate (because of the IVA). So your choice would be:

1. pay the IVA contributions for another two years (250 x 24 = £6000) or whatever your contributions are!

or

2. remortgage for 15 years at a subprime level which might be a rate 2% above what you are currently paying (a 2% increase on a £100k mortgage would be over £160 increase per month... £160 x 12 months x 15 years = £28,800)

Obviously you could sell too, but that would mean either renting (which is an option) or a new mortgage which would be the same thing as remortgaging.