To remortgage or not with IVA?

My husband and I are just 2.6 months into a potential 5 year IVA with W3 debt solutions. We pay £370 per month.
When we started we paid £225 per month for 60 months, subject to review (wages increase have caused inrease). In addition, equity in our property that was estimated a t£30.493 then is to be realised at year 4 of the IVA(ie. make us remortgage).
Cost of the IVA is £4113 (nominees fee). Supervisors fees are £75 plus VAT per month.
Our mortgage is with Northern Rock. The secured amount is £107,100.00. We also have an unsecured loan of £30,000 that was not included in the IVA by Supervisors choice/advice.
Our house is roughly worth £120,000 (We bought it at £119k using some of the unsecured loan amount).
The IVA covers debts of £33436.17.

Now I am concerned for many reasons! Alot has changed since equity valuation! Our fixed rate of 5.99% will change to variable rate of 4.79% on 1 June 2011 Only just discovered it is less than our fixed rate!). The potential remortgage point of IVA is September 2011. Now I know variable rate is cheaper I am slightly relieved but I wonder where we stand. Surely no other mortgage company will take us on in our dire situation and if they did surely we would be paying more? Also will IVA make us remortgage whatever the cost? As there is next to no equity will they release us from IVA as it is clear they won't get all their money back?

If I was to be forced into remortgage I would love to move to bigger house but am i living in dreamworld to think that is an option? I'm sure NR have said they would not transfer mortgage.

Any advice would be appreciated.


  • spaceman5
    spaceman5 Posts: 2,716 Forumite
    i have heard from other posts on here that if for some reason you cannot release the equity in year 4, your iva supervsor will normally extend your iva by another 12 months to cover the shortfall.
    Take every day as it comes!!
  • chinup_3
    chinup_3 Posts: 180 Forumite
    one things for sure- You are NOT going to get a remortgage with an IVA in place. I work with several mortgage brokers- hell ccj's are ''mission impossible''. In this clmate= waaay too much ' high risk'.
    remember always -'' life shrinks or expands in proportion to ones courage''
  • adfax
    adfax Posts: 98 Forumite
    I don't know if it varies between companies, but in my case there are various conditions attached to the requirement to release equity.

    Firstly, it is only up to 85% LTV - ie - they do not expect me to mortgage the house for more that 85% of its value. This means that I would have to have more than 15% equity in the property before I had to look at releasing the equity above this. Secondly, as the mortgage and house are in joint names, they can only have 50% of this as the other half is my wife's.

    Thirdly, there are some conditions regarding the amount that my mortgage payments can increase - it is something like the increased mortgage payment should be no more than an extra 50% on top of what I am already paying on my mortgage.

    Given all of these conditions, and the fact that the chances of me getting mortgage whilst in an IVA are just about zero, then I am not that worried.

    And finally, if I have less than 15% equity then there is considered no equity to release the IVa finishes as planned at 60 months. It is only extended by 12 months if there is equity but I can't get a mortgage.

    Sorry for the long post, but I hope that reassures you (but check your IVA agreement as yours may be a bit different).
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