IVA Equity Release: Remortgage vs Secured Loan

Depth_Charge

UpToMyNeckInIt wrote: »

DC: You touch on another good point about a customer's 'sound record of payment'. Indeed, to be eligible for this particualr remortgage product, the 'applicant must not have missed any secured borrowing payments in the last 12 months'.

So simple then to get out of it: If an IVA customer thinks they are likely to get offered this sub-prime mortgage, they simply need be a couple of days late paying ther existing mortgage.

OK, they might end up paying a penalty fee or a small amount of interest. But they also get a nice red flag on their credit file rendering them ineligible for this sub-prime product. Thus forcing their IP's hand to go with the 12-Month extension instead, saving: £thousands...

I have mentioned in an earlier post (some Months ago) that even sub-prime lenders have lending criteria like: 'Not missing a loan/credit card repayment in the last 6 months' (quite a common one that); or not going into 'unauthorised overdraft'.

So another option, if you have the £500 credit limit clause in your IVA, is to get a Vanquis Credit Card (accepted me, no bother) or similar, spend £10, be late paying it back the following month, incur at £12 'late fee' + a couple of quid in interest, and again you have rendered yourself ineligible for a lot of loans.

Alternatively, just go say £20 overdrawn for a few days.

...or do a combination of the above. Each one is easy to remedy.

(NOTE: in all cases, I am only suggesting being no more than a few days late, paying back whatever. I would never advocate going into a bad debt situation).

I would even suggest that even if this risked technically 'breaching' your IVA, accidentally-on-purpose having a 'bad month' is such a small, easy to fix breach, that your IVA will not be in danger of being terminated.

Just a suggestion or two for people feeling 'compelled' to take out a sub-prime loan or remortgage.

Hi

Ooh, you are awful, but I like you:)

!!!!!! Emery I think!

I am having to hold my sides with laughing on this one, great stuff UPTMNII, but I cannot endorse some of this, really, ooh I can't yer know, no, not even me duck:)

My take:)

UpToMyNeckInIt

...Yes, it is a bit sneaky, but so is an IVA company potentially thrusting a secured loan in someone's direction that they were not anticipating (ie: where they are anticipating a 12-Month extension after failing attempted remortgage).

If some IP's want to 'get creative' attempting to increase creditor dividend, then this shows one way that customers can do likewise, to keep IVA repayment to a minimum.

UpToMyNeckInIt

Latest news.

Like it or not, it looks like the 2014 IVA protocol will be amended to enable Secured Loans to be listed as an option in new IVA's:

http://www.iva.co.uk/forum/topic.asp?whichpage=2&TOPIC_ID=56555&#535607

Something for homeowners contemplating IVAs in the future to bear in mind.