Secured loan etc

memberme

In the last year of an iva we have to try and release monies available within the 85% LTV agreement.

1). Where does one go to get a home valuation? Or is that an automatic part of the application for a secured loan. Especially one independent of a loan provider, such that it's realistic if not on the cautious side, and given free.

2). Probably will have 10 grand of equity. Seams a hard alternative to have another full 12 months of payments added if i can't secure a loan for that amount over say 14 years ( when existing mortgage finishes) for £80 extra per month and end the iva at normal time.

I guess that's what we signed up for

UpToMyNeckInIt

I have heard that many IVA customers simply call round 2-3 Estate Agents (just don't tell them it's an IVA valuation, or they may want to charge you for it - albeit, you should be able to get your IVA provider to pay any professional fees).

Just say you want a quick sale, and would like the property marketed on a 'forced sale' basis and valued accordingly.

Many IVA's are happy with a 'forced sale' valuation, but mine requires an 'open market' valuation, so do check the wording of your proposal.

Then, after you have sent the Estate Agents on their way, they will no doubt start to phone you daily. You want a valuation in writing, so just say to them that you are away for a few days and to put the details in the post.

That should yield the written valuation required.

I assume you have done the 85% LTV calculation to come up with the £10K figure.

Are you saying that a 12-Month IVA extension would work out dearer than a 10K secured loan at 17-19%APR?

Most IVA customers seem to prefer the extra 12 Months, as that usually works out a lot cheaper.

Good luck.

memberme

Thanks.

I agree its not cheeper but i pay 900 a month and on a 6 year agreement due to northern rock.

For me to end the iva on time and pay 80 a month would be unoticeable. A further year extension is a pain in the !!! to contemplate.

Thanks for the advice and i will check the wording

I notice most discuss remortgaging including the outstanding mortgage owd. Do iva providers not allow an independant secured loanindependant to the original mortgage which would stay as it is? This would be far easier to arrange.

UpToMyNeckInIt

I do see where you are coming from, and whilst a lot of the chatter on this and other iva forums is 'anti-secured loan', you make a compelling argument for one.

You touch on an interesting point in that a remortgage in the conventional sense will involve moving your entire property debt to an alternative product. If you were successful, this would be at a sub prime rate.

The advent of the 2014 protocol allowed equity release via secured loan, but only for new Iva's. Saying that, I see no reason why you could not attempt equity release this way.

On the plus side you keep your prime rate mortgage, whilst borrowing only a relatively small amount at a relatively poor rate.

Indeed if you were a 'Debt Free Direct' customer, they may well have asked you to take this route anyway. They work with a firm called 'The Select Partnership' who specialise in assisting iva customers with secured loans. Might be worth looking them up, as well as trying a few other companies, to see if you can work something out.

If you are successful, it is worth remembering that once your credit rating is restored at the end of year 6, you may then be able to switch to a lower apr product. So check for early redemption penalties with any loan you may arrange.

Good luck and let us know how you get on.

longtermplanner

memberme wrote: »

I notice most discuss remortgaging including the outstanding mortgage owd. Do iva providers not allow an independant secured loanindependant to the original mortgage which would stay as it is? This would be far easier to arrange.

Most IPs (I would say all, but you can never tell!) would be very happy to listen to a proposal for you to take out a secured loan rather than a remortgage, even if your IVA terms say a remortgage. Anything which gives your creditors the same end result (ie 10k!) would be acceptable, it may require a vote of your creditors but it would be easily approved.

You are hoping to get 10k repaid over 14 years at c £80 a month? That suggests an interest rate of about 4.5%. That isn't going to happen. You may well get charged two or three times that much for a secured loan (which is a second charge, ranking behind your mortgage) as you have had an IVA.

AND most secured loans are variable rate, so it could increase over time.


Even in your case, where you are making very high monthly repayments it is far from clear that a secured loan is a good choice for you.

UpToMyNeckInIt

... Fair point, the secured loan apr's for iva customers that I have seen are typically 12-14% variable, or 16-19%fixed rate.

Arrangement fees of £1500-£2000 are not unheard of either.

Still, I understand the OP's predicament. Even repaying £150pcm on a loan frees up £750 pcm. This will clearly allow a much less restricted lifestyle, than forking out an eye watering £900 pcm for another 12 months, even though this would be the cheaper option.