Re-mortgage and IVA'S

scojam

Hi, can anyone help please, we are in our 56th month of an IVA and should finish in June 2011, we have only just be asked to look into re-morgaging for equity yet when we checked all the info we received at the beginning it said we would be asked in the 4th year. We weren't and now with only 4 months left have been asked, do we still have to do this?????

bernard828

The norm is for any remortgage to be completed in the final year of the IVA within the last six months of conclusion. The normal wording is that they will take 85% of the value of your house and then see if there is more than £5,000 equity in it. If there is, then you are to use up to 50% of the money you're paying into the IVA to increase your mortgage / secured loan payments by and get some of that money out of there. Your final few IVA payments reduce by the amount extra you pay to the mortgage, and if distributions to creditors fall under £50 per month as a result, the IP might end the arrangement early. If you have more than £5,000 equity, but you can't get a remortgage, then you're probably looking at an extra year in the IVA.

Without looking at the contract, it's not possible to tell what's in it or whether that formula has been followed, but the above is the basic standard method of dealing with equity in IVAs and 95% of normal standard IVAs will deal with homeowners in this way.

Hope that helps.

FoggyBrain_2

I might add that Bernard's formula tends to apply to more recent "Protocol Compliant " proposals. Older ones are not as helpful, often citing a specific amount to be raised regardless of the actual equity --- however, these can often be varied, as creditors are more enlightened these days.

clueless1682

Hoping someone could help - I'm asking on behalf of my In-laws who are coming to the end of their IVA. Mother in law is getting stressed out over what comes next so trying to reassure her!

They're due to come the the end of their IVA next month and they've been asked to get a redemption figure on their mortgage and get 2 quotes for a remortgage. I think I understand what happens if they can get the remortgage ok, but what if they can't? I know how banks are these days, bit different than 5yrs ago when they first started this.

Thanks in advance!

FoggyBrain_2

It largely depends on what it says in their proposal and chairman's report. These days most proposals are based on a common protocal and are, therefore, largely similar. However, in the early days the emphasis was more on the I in IVA (Individual) and proposals varied on a case specific basis.

clueless1682

Thanks, I'll see if I can get a look through their paperwork to see what it says. Mum in law is a bit too stressed out to read through it all so I'll try get a look.