IVA help with remortgaging

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Cookie_Clan05
Cookie_Clan05 Posts: 8 Forumite
edited 12 October 2010 at 10:35PM in IVA & DRO
Hi

I wonder if anybody can give me any advice. My husband and I are currently in an IVA which will have been running for 3 years in February. Original debt was for £58000 but then have reclaimed PPI amounting to approx £9000 on debts included in IVA.

MORTGAGE OUTSTANDING £95000
SECURED LOANS OUTSTANDING £50000

paid approx £8500 into IVA and currently pay £239 per month. Can anyone give me any advice on going about a remortgage as I would like to be free of the IVA. Property value approx £220000

Any advice would be greatly appreciated.

Thanks

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  • Charco_2
    Charco_2 Posts: 1,677 Forumite
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    Are you saying on paper that you've £85,000 equity in your property???

    Can I ask who put you in an IVA - although I have my suspicions!!!

    Sounds a little like you didn't really need an IVA... you are not insolvent! Even if you only have share of HALF the equity in the property you were not really insolvent... you might have had a cash-flow problem but that's a bit different!

    However, to answer your question, you will be expected to pay back the full outstanding amount of your debts, plus 8% interest per annum, plus your IPs fees... for payplan this would be as much as 25% i believe (but that's not who i suspected you are in an IVA with!)

    (£58,000 - £9,000 = £49,000 for the amount of PPI you've reclaimed!
    £49,000 - £5,000 = £44,000 for the amount you've paid towards the debts so far minus fees
    £44,000 x 1.08 = £51,321... this is a guesstimate of the amount you'd have to pay...

    This amount will vary depending on:
    - the amount of fees the IP has taken so far
    - when the PPI was reclaimed)

    My advice firstly would be to check to see if your IVA is "Protocol Complaint"... it will indicate this in your Proposal. Basically you are looking to see what it says in your IVA in the event that you wouldn't be able to release equity from your property. (Mortgage companies and banks are simply not lending, house prices are falling).

    Certain creditors will have tried to remove the protocol compliant terms in your IVA but if they haven't managed to do that, then I would sit tight, maintain your repayments to your IVA, and when your fourth year valuation comes around it is unlikely that you will be able to release much equity (if any), then your IVA will be extended for a year and you wont have had to touch the equity in your property at all!

    However, speak to your IP to discuss the terms of your IVA!
    Would you ask the wolves to look after the sheep?
    CCCS funded by banks
  • Cookie_Clan05
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    Hi

    We do have approximately £80000 profit in the house so do you think that an IVA was the wrong option to take and can we do anything about it now?

    Our IVA is held with Blair Endersby - Baines & Ernst. Is there a problem with them??

    The proposal states that in month 54 we have to obtain 2 remortgage quotes. The property shall be remortgaged to a max of 85% loan to value.less existing secured borrowings. The amount of the additional secured borrowings increase shall not exceed 60% of the monthly contributions at the time the mortgage offer is obtained.

    Could anybody shed any further light on it all and if there is any chance of ending the IVA early.

    Thanks
  • Cookie_Clan05
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    Is anybody able to help us further? Can anyone say if there is any way we can end the IVA or will we be best to sit it out until the 54th month and then remortgage as per our proposal? I would rather finish the IVA early if at all possible!!!
  • pool-hustler
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    you have to consider how much was written off.
    Is the amount worth the length of the IVA?It can be reversed and the money you paid is safe.
  • swardean
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    Cookie Clan, believe me you do not want to remortgage, If you did the creditors would take an extra £51k from you to settle the overall debt.

    After 54 months just get try to get mortgage quotes. As you are in an IVA (even with your equity) you will not get a mortgage. You will then pay an extra 12 months payments at £239 per month.

    So you will pay ax extra £3000, that a lot better than £51,000
  • Max_1066
    Max_1066 Posts: 169 Forumite
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    You def don't want to get out of the IVA as it will cost you dearly. In any case getting a remortgage with an IVA in the current climate will be next to impossible I suspect, sorry.
  • Charco_2
    Charco_2 Posts: 1,677 Forumite
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    Sorry Cookie, i threw up a bit of a hornets nest then deserted you - didn't notice the reply!

    Swardean is right... I know the IVA might be a pain but you are certainly better to simply ride it out!

    Come month 54, play down the value of your home in today's market etc, chances fo getting a remortgage are slim (best around seems to be only 70% LTV, not the 85% in your IVA).

    At 85% you'd be expected to release £42,000
    At 70% you'd release £9,000

    Your IVA says you'll need to show that you've tried to get a remortgage (two quotes and refusals OR quotes that are not suitable) - highly unlikely that you will and so your IVA is extended for a year and you're laughing!

    The other thing is, you'll be expected to release the equity from your property into the IVA anyway. So you wont be able to use it as a bargaining tool to end your IVA early.

    You would have to release enough equity to cover the original debts (minus payments so far), plus interest (at the original rates or 8% per annum), plus your IP's fees so far... can be quite a hefty figure!
    Would you ask the wolves to look after the sheep?
    CCCS funded by banks
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