IVA extension??

jedi82

Am i right in saying that if after 5 years you have more than 85% of the value of yor home still owing on your mortgage then it is considered 'no equity' and therefore will not have to do another year?

Charco_2

Pretty much, yes!

Because you will not be expected to sell your home in an IVA, the only way to realise the equity is through a re-mortgage. No mortgage company is likely to lend you more than 85% of the value of your property so for the purposes of your IVA you have no equity (even if mathematically you have £10,000 or more).

Check the paperwork of your IVA to see what you're agreeing to - you can't be expected to sign up to something you cannot possibly afford in the end!

If you have a small amount of equity (£5k or so) then it is likely you will not be asked to remortgage either. It works out far better for you to make an extra year's payments (say £300 x 12 = £3,600) rather than remortgage at a punitive interest rate that you will be tied into for at least two years.

Also if the only remortgage you can get increases your mortgage payments by more than half of your monthly contributions then generally you will not be allowed or expected to re-mortgage. (So if you're paying £200 to your IVA and a new mortgage will increase your mortgage payments by £100 then you won't have to remortgage)

boxer3

Wow.. What brilliant and helpful advice from all of you. Thank you so much. There will definitely be no equity in our property by the time our iva completes so that will be a pill we will need to swallow and just get on with it. Will certainly check our paperwork charco! Thanks again... Will keep posting on our progress in the hope it may help others.

pool-hustler

can you offer to pay off the last year of an IVA without worrying about a re-mortgage?

swardean

Yes poolhustler, if after 4 years you offer a full and final settlement to the amount of your initial dividend it is likely to be accepted. However your IP will want to know where you got the cash to settle from (can claim it is from faimily or friends)

pool-hustler

SUPERB.
Thats what I wanted to hear. I wait. I have 11 months left.
Can it be done with less than 12 months? How about 6 months?

swardean

In theory yes, but the incentive for the creditor to accept the F&F orffer is that they get their money early. The closer to end of the agreement and the incentive is reduced so they may want you to continue as per orignal agreement (and extra year). So the earlier the better. Good luck

pool-hustler

I'm confused.
If the agreement was for a five year term, how can it be extended by a year?

Charco_2

The choice would be to either release equity (if you have it) or extend the IVA instead.

It will almost always be cheaper to extend the IVA.


(IVAs can also be extended if for some reason you have missed payments or reduced your payments significantly during the proposal)

fino1975

I'm in the final year of an IVA with McCabridge Duffy. My mortgage redemption statement says I owe £59000.00 and I had the property valued at max £65000.00 for sale purposes (even then they were unsure I could achieve this). My IP has informed me that because on entering the IVA I agreed to a £13000.00 pay out in my fourth year (at that time the property was valued at £82000.00) that my IVA will either fail and I'll be made bankrupt or it will be extended by a further year, to be determined at a creditors meeting.

Could some please advise me if this is correct?

Thanks