IVA and possible re-mortgage

Boltonbwfc

Hi all

Just a quick question. I am with StepChange and into my 3rd year of the IVA. My question is in the 5th year if I have equity in my property who will apply for the re-mortgage given that I will still have bad credit rating? and how much would that re-mortgage be? I had a debt of about 45k before entering the IVA? Thanks.

Boltonbwfc

Foxy-Stoat_3

Hi

You would need to apply to re-mortgage nearer the time and go from there.

I am afraid no one will be able to tell you how much your mortgage will be in 2 years time as:

1. no one knows whats going to happen to the BOE base rate (if any)

2. interest rates for bad credit

3. how much cash you will need to re-mortgage by

4. your monthly payments on your iva

5. how much your IP will ask you for on the 5th year.

If you can't obtain a re-mortgage or if there is little or no equity then you will just have to pay an additional 12 months.

I wouldn't worry about it for at least 18 months.

National_Debtline

Hello there,

IVAs set up by Stepchange adhere to the IVA protocol. The protocol rules are desigend to ensure fairness and transparency across the various IVA providers. The Insolvency Service has a section which is specific to equity clauses which you may find useful; here's a link:

http://www.insolvencydirect.bis.gov.uk/insolvencyprofessionandlegislation/policychange/foum2007/plenarymeeting.htm

Best wishes,

David @ NDL.

Boltonbwfc

Hi again

Forgot to ask. Does having a secured loan on your property also come into play if the IVA are looking to re-mortgage at 54 months? Thank you.

headstuckinsand

Foxy-Stoat wrote: »

Hi

If you can't obtain a re-mortgage or if there is little or no equity then you will just have to pay an additional 12 months.

You will need to check the way your agreement is worded but I believe if you have no equity or less than a specified amount of equity (e.g. £5k) then the agreement comes to a finish at the end of the 5th year.

You would only be asked to pay another year if you have sufficient equity (after the 85% LTV rule - see other posts) and are unable to remortgage or release the equity by other means (e.g. a loan). The additional costs to release the equity would also be taken into consideration by the IP.

It's also worth bearing in mind, if you are asked to release equity, whether it's more beneficial to do another year of the IVA or not e.g. If you are asked to release say £10k of equity but are paying £500 per month into the IVA then it's actually better to do another year as it's only going to cost you £6k.

But as Foxy says, I wouldn't worry too much about it until closer to the time as no-one really knows what's going to happen to the housing market over the next couple of years.