3 YEAR REVIEW OF IVA, EQUITY Release (single IVA but joint Mortgage)

JCCM

Hi, I'm looking for some advice or to hear from someone who has been through something similar.

I have an IVA and joined the IVA whilst single. I then met my partner and due to him being able to put down a deposit and being refered to a mortgage lender through my IVA provider, who would consider me with bad debt we were able to secure a mortgage.

I was told by my IVA provider that at my 3rd year review they would request a mortgage redemption figure to look into whether equity was availiable to cover the outstanding IVA payments and the IVA would then cease.

I questioned at the time how this would be considered as the IVA is mine but the mortgage is in 2 names. I was told (over the phone) that they would only consider 75% of my half of the equity.

Myself and my partner have since married and now have a child and one on the way. I have been asked to provide a mortgage remdemption figure in line with the 3rd year review.

I have been advised by my mortgage lender that I would not be able to take equity without settling the mortgage loan in full as it is a very basic mortgage and not transferrable to another property etc.

I have relayed this to my IVA provider who have now advised if the equity is enough but cannot be released they will add 12 months onto my arrangement. This has never been mentioned to me before.

So I know that is alot of history etc but the major questions I have taking into account all of the above are;

1. Now that we are married can they consider all of the equity or as the IVA is just in my name should it still only be 75% of my half?

2. Can they just extend the IVA by 12 months if my mortgage lender (whom they reccomended) will not release any equity?

Any advice or suggestions will be gratefully recieved.

Thank you for your time.

debtinfo

2. yes they can extend your IVA if it was in your original proposal, i presume that you did read it prior to signing

Charco_2

First thing is that it doesnt matter much WHEN you got the home (before or after the IVA) or who recommended the mortgage broker... the point is you'll have an asset to consider when the IVA ends (I really hope - but you probably weren't advised - that you took into consideration somehow that the first £x amount of equity belongs to your partner for the deposit he laid down!)

So now that you have an asset you will need to work out how much value it has that you can realise for the benefit of your IVA. So it's perfectly normal that you would be required to provide a mortgage statement and a valuation of the house.

Not sure what your mortgage provider is saying, because you're not looking to transfer it to another property - are you? - but yes there might currently be penalty charges for redeeming your mortgage early (which would mean there is less equity for you to release which obviously would work in your favour!)

I have relayed this to my IVA provider who have now advised if the equity is enough but cannot be released they will add 12 months onto my arrangement. This has never been mentioned to me before.
This is normal. What is the value of your home? What is the mortgage including redemption value? Bear in mind there would be legal costs too in remortgaging. How much equity is there in your home? (Can you ringfence the amount of the deposit your hubby put down? How much equity is there then?) Half it because that's all that is legally yours!


1. Now that we are married can they consider all of the equity or as the IVA is just in my name should it still only be 75% of my half?
No, your husband's share of the equity is your husband's still!

2. Can they just extend the IVA by 12 months if my mortgage lender (whom they reccomended) will not release any equity?
If you are unable to release equity and there is a significant amount to release then yes you may be required to extend your IVA by 12 months. But only if you personally have £5k or so to release! If you have more than this then a 12 month extension may not be enough! Alternatively, could your husband or other friend or family memeber lend you a small sum instead of the equity?

This would be slightly easier to answer if you could give us a clue about the questions above in red - nearest guess is fine! And also the bit in purple

JCCM

Charco, that is actually very helpfull thank you. My main concern is that my Husband shouldnt be penalised for the bad debt I accquired before I met him so your advice on his half of the equity puts me at ease.

If there is sufficient equity in my share and it can be released into my IVA I am happy to pay it, but I am not sure whether it can be done with the type of mortgage I have.

I have requested the redemption figure and will speak to my IVA provider as soon as it comes through.

Thank you for your help.

Charco_2

Just spoke to someone there and I would imagine (especially in this rocky economic climate) that there would be very little equity for you to have to release.

First thing is DEFINITELY argue that your husband's deposit is his own!
If it wasnt for your husband you would not have an asset at all but you are certainly willing to address your own equity - does your husband have proof that he forked over whatever the amount of the deposit was? (A cheque stub, something from the solicitor, and paper trail?)

So the time you take the value of your house, subtract the mortgage (including redemption charge, and fees), then subtract your husband's deposit - is there much left?

After that consider that the equity might not really be a 50/50 split because if your husband earns significantly more than you then he's paying more of the mortgage than you! (It's not a divorce settlement so you dont just get half)

Wait and see what your IP comes back to say to you when you give him the paper work but dont simply agree to pay whatever figure he gives you, ask for the maths as well and if you dont like it, give him some maths of your own!