IVA - Can we sell our house?

chirpychick

Hi
We have been in our IVA 3.5 years.
At the time it wasn't an option to sell up because our house had fallen into negative equity.
However, in the lovely south east house prices in our area specifically have increased.
We have more equity in the house.

Is it a possibility to sell the house, pay off our debt and move into rented?

Would the IVA allow this?
Will phone them to discuss but just looking for some info.

debtfree2016

Hi Chirpychick, not sure why you want to do this..... Firstly yes you would need the approval, secondly you will have trouble trying to get back onto the property ladder and having an IVA on file will mean anyone wanting to rent to you will possibly refuse due to credibility.
If you look at how long it takes to sell a house plus add on 3 months for a decision from the creditors. You could well be on the final part of the home straight of the IVA anyway.
Best of luck whatever you choose.

chirpychick

debtfree2016 wrote: »

Hi Chirpychick, not sure why you want to do this..... Firstly yes you would need the approval, secondly you will have trouble trying to get back onto the property ladder and having an IVA on file will mean anyone wanting to rent to you will possibly refuse due to credibility.
If you look at how long it takes to sell a house plus add on 3 months for a decision from the creditors. You could well be on the final part of the home straight of the IVA anyway.
Best of luck whatever you choose.

We have a few reason why we would be looking to do this a big part of it is space as since getting into the IVA we have had a little boy and we just don't have space (my husband is sleeping on the sofa lol).
MIL would be a guarantor for us if we needed one to go into rented. I don't know if this would be a help.
We have been told (and witnessed others where we live) that our house is very likely to be snapped up within a matter of days - weeks at most. I'm not stupid enough to expect that is will definitely be the case, but I do know from previous experience that around where we live it isn't unusual.
I phoned payplan today who were so unhelpful!
We have been asked to provide a current mortgage letter which we can provide and also a written valuation of the property (we have someone coming round tonight to do the valuation). Obviously we know that how much our house is worth with the clincher.
I worked out that we would be paying them 3k more by ending the IVA early this way (and in effect paying back every single penny we ever borrowed including payplans fee's) in comparison to say succeeding in a re mortgage and releasing equity a year down the line.
And in fact if we are unable to succeed in releasing equity by way of re mortgage and stay in the IVA for the 6th year then they will all be loosing out on 15k.
So the odd's seem to be in our favour.

We really want the fresh start alongside the extra space which is becoming a serious problem.

It is stressing us out so much that we could end up with "refused a mortgage" on our credit file for another 6 years after the IVA is complete making it impossible for us to move and remortgage in the future.
And if we do manage to remortgage then we will be stuck paying a huge mortgage for a really long time and still unable to move.

I don't forsee it being too much of an issue getting back onto the property ladder, we will still have equity leftover after paying off all our debt, not to mention the opportunity to rebuild our credit file in the meantime whilst adding to the deposit.

maybe i'm seeing things through rose tinted glasses and i'm fully aware of that possibility hence my post

longtermplanner

chirpychick wrote: »

I don't forsee it being too much of an issue getting back onto the property ladder, we will still have equity leftover after paying off all our debt, not to mention the opportunity to rebuild our credit file in the meantime whilst adding to the deposit.

I am assuming that property prices have risen quite a lot then.

There will certainly be some amount at which you can settle your IVA early. I suggest you come back here when you have the valuation (make sure it is a realistic one!) and we can discuss how much this will be. It will depend on
a) the amount of equity after paying off the mortgage and any secured loans and EA fees, solicitors fees
b) your debts at the start
c) the amount you have paid so far, your current monthly payments and how many payments to go
d) whether just one of you have an IVA or both

chirpychick

longtermplanner wrote: »

I am assuming that property prices have risen quite a lot then.

There will certainly be some amount at which you can settle your IVA early. I suggest you come back here when you have the valuation (make sure it is a realistic one!) and we can discuss how much this will be. It will depend on
a) the amount of equity after paying off the mortgage and any secured loans and EA fees, solicitors fees
b) your debts at the start
c) the amount you have paid so far, your current monthly payments and how many payments to go
d) whether just one of you have an IVA or both

Thank you I really appreciate your offer of help.

And yes house prices have shot through the roof.
We have arranged for a 2nd valuation to be done just to make sure we are getting a realistic view.

Will get back to you later.

chirpychick

a) the amount of equity after paying off the mortgage and any secured loans and EA fees, solicitors fees £23-28k (dependent on what the house sold for
b) your debts at the start £70,699.80 (including payplan's fee's)
c) the amount you have paid so far £24,583
your current monthly payments £518.50 (it was higher but since had a baby and lost my job so this is the lower amount.
how many payments to go 17 (but obviously they may well ask us to continue for year 6 if we cannot release equity by remortgage
d) whether just one of you have an IVA or both Both and the figure is the combined amount

I'm a little more hesitant now because i just feel very bogged down with all the figures. Would be interested to see it through somebody else's eyes

chirpychick

Just to say we have thought about it with a clearer head and we wont be selling the house.

debtfree2016

Hi Chirpychick


When the time comes, you will look back at this thread and hopefully smile.


Best of luck.

Giggles_Fairy

I think thats your best choice chirpychick as based upon the figures you have put you would not be paying off all your debt (based upon 71K at start, which I'm presuming doesn't account for the higher supervisor fees that can be taken with more realisations being paid in) - so it is a much more complicated procedure with no guarenteed outcome.

chirpychick

I think it was just the prospect of waking up one morning and being debt free! That day will still come i know.

I'm not sure what we will do about the lack of space but for the time being we will have to get on with it.

what i don't really understand is, in the final year, when tell you to remortgage to release equity your chances of that are pretty much nil right? with all those defaults and the iva on your credit file?

if so you have to apply for 3 mortgages to prove you couldn't remortgage so will you then be left with "refused a mortgage" on your credit file? or do you have to declare it when you do apply for a mortgage when your credit rating has improved?

Nobody i speak to seems to know the answer! I have spoke to a friend who is a financial advisor today and even she has said she needs to ask a colleague about it because she doesn't know

debtfree2016

I'm not sure, but what I do know is each time a search is done for credit Mortgage or Loan this creates a footprint on your credit file. I'm not sure they can actually see who or why, when they do a credit check.