iva after-assets timescale

bleep27

hi, inheritance in terms of IVA say house must be sold asap or mortgaged to fulfil debt in full.


my query is immediately? surely I get to til the end of the agreement to sort...by then I have a better chance of getting a 55%LTV mortgage?


please help, anyone settled due to asset inheritance how long did you get?


in panic mode.


thanks

longtermplanner

hi bleep,

sorry can I ask for a few more details:

You are currently in an IVA, when did it start? Did you have a house at the start of your IVA?

You have recently inherited some money and/or a house? And the value of this is enough to pay off your IVA in full? Has the estate actually gone through probate yet? Who is the executor?

You don't want to sell the house you have inherited, instead you want to get a mortgage on it and pay off the IVA with that money - is this correct?

bleep27

2.5 years in (no defaults), didn't have house at start, recently sold my house and they hold all funds, recently inherited house only, no cash so im paying for probate bills etc. probate under way and im not executer. I want to mortgage as otherwise no home.

UpToMyNeckInIt

Hi bleep,

Even with a 'free' house, whilst in an IVA you are extremely unlikely to get a mortgage of any sort - certainly not on the high street.

I am aware of one remortgage product from 'Magellan Homes' available to IVA customers at 7.55% with a LTV of 65%. Have a look:

http://www.magellanhomeloans.co.uk/media/6336/Magellan%20Homeloans%20Product%20Guide%20August%202013.pdf

You should also try a whole of market mortgage broker. For example, I am aware of several current and ex-IVA customers who have had some success using companies like 'The Select Partnership' and 'Zebra Money' (Google them). They also both have reps. who post on another IVA forum, and both seem to offer decent advice in the circumstances.

They should be able to assist you with getting a mortgage or a secured loan against the property, as should any other decent mortgage broker, assuming you are determined to keep it.

Good luck.

bleep27

most important question is the timescale I have in which to find a mortgage, as I have 2.5 years to go, obviously I will owe less then, but IV want me to mortgage now? is that usual?

UpToMyNeckInIt

bleep27 wrote: »

most important question is the timescale I have in which to find a mortgage, as I have 2.5 years to go, obviously I will owe less then, but IV want me to mortgage now? is that usual?

Difficult question to answer.

I think your IP is treating this inheritance as a windfall, and thus want it realised ASAP. I believe they are in their rights to do this as well unfortunately.

Well worth you digging out your IVA paperwork, and looking over the EXACT wording relating to windfalls or 'after-acquired' assets.

This is as opposed to treating this inherited property like your own home ie: where 'standard' terms usually apply which require you to attempt equity release in Month 54.

It is a difficult situation, and a bit of a long-shot: I would advise that you attempt communication direct with your IP (ie: not a case handler), together with your proposal to release equity later on, when as you correctly assume, it will be considerably more straightforward to do so.

Do keep us posted. Good luck.

sourcrates

One point to note, is that should you be unable to re-mortgage, then the usual course of action is to extend the IVA by a further 12 months, you may find that option more appealing than having to re-mortgage, as, lets face it, you will be hard pressed to find a provider who will lend to you, I believe under the terms of your IVA you have to try 3 separate lenders, who you choose is up to you, especially if the 12 month extension is more preferable, if you know what I mean !!

UpToMyNeckInIt

sourcrates wrote: »

One point to note, is that should you be unable to re-mortgage, then the usual course of action is to extend the IVA by a further 12 months, you may find that option more appealing than having to re-mortgage, as, lets face it, you will be hard pressed to find a provider who will lend to you, I believe under the terms of your IVA you have to try 3 separate lenders, who you choose is up to you, especially if the 12 month extension is more preferable, if you know what I mean !!

It is a fair point, but I think the standard equity release clauses only apply to your main residence as may be the case at the start of the iva.

My understanding is that if you inherit any property afterwards, that it is treated in the same way as any other asset.

To introduce the equity release clause now would probably require a variation meeting, and a very supportive IP.

Worth a go for sure, especially as the OP wants to live in the property, but I am uncertain if creditors would go for it, or just demand immediate sale/equity release to repay 100p in the £ right now.

longtermplanner

I am assuming in what follows that the value of the house is going to be sufficient to pay off your debts plus IVA fees in full.

This inherited house will not fall into the equity release clause, it is an acquired asset. No way will the creditors agree to getting less than 100p in the £. It's not worth talking about less, because the important issue where you want the IP's backing is in the timing.

didn't have house at start, recently sold my house and they hold all funds,

How come 2.5 years into an IVA you have managed to acquire and sell a house? And inherit another one? This is all sounding rather complicated!

Let's clarify: How large were your debts going into the IVA? How much are you paying per month at the moment? How much 'additional funds' does your IP hold? How much is the inherited house worth?

Where are you living at the moment? In this house? In that case you are presumably paying no rent so you can make a higher IVA monthly payment?

How large is the house? Is it possible to get a lodger in and pay the rent into your IVA?

What I am looking for is a way to pay 100p in the £ into your IVA without needing to remortgage at all if possible.

Is the executor a professional or some relative / friend of the deceased? You can't do anything with the house (sell or remortgage) until it is transferred into your name. I would suggest that going extremely slow on the probate and transfer is a useful first step is the executor is likely to be receptive to helping you like this.

bleep27

I am assuming in what follows that the value of the house is going to be sufficient to pay off your debts plus IVA fees in full. yes

This inherited house will not fall into the equity release clause, it is an acquired asset. No way will the creditors agree to getting less than 100p in the £. It's not worth talking about less, because the important issue where you want the IP's backing is in the timing.

Quote:
didn't have house inherited house at start, recently sold my house which was in the IVA and they hold all funds,
How come 2.5 years into an IVA you have managed to acquire and sell a house? And inherit another one? This is all sounding rather complicated!

Let's clarify: How large were your debts going into the IVA? How much are you paying per month at the moment? How much 'additional funds' does your IP hold? How much is the inherited house worth?

Where are you living at the moment? In this inherited house? In that case you are presumably paying no rent so you can make a higher IVA monthly payment? yes

How large is the house? Is it possible to get a lodger in and pay the rent into your IVA? no

What I am looking for is a way to pay 100p in the £ into your IVA without needing to remortgage at all if possible. No prob still owe 25k even with paying extra 500 a month



Is the executor a professional or some relative / friend of the deceased? You can't do anything with the house (sell or remortgage) until it is transferred into your name. I would suggest that going extremely slow on the probate and transfer is a useful first step is the executor is likely to be receptive to helping you like this.


Thanks im gonna have a look at options but aim for £100p somehow, possible with an extension but still tough. But will be easier in 2.5 yrs when debt has reduced. I need to buy time!

UpToMyNeckInIt

Sadly, I don't think you will have time on your side. I think LTP is right: It won't be long before your IP is demanding that you repay your IVA in full, either by selling up, or releasing the relevant amount of equity.

Apologies for making some assumptions here, but:

...you could look into taking out a sub-prime secured loan to clear the IVA at say, £250ish pcm (ie: roughly half your existing IVA repayment, so should be a viable option) over the next 12-15 Years (assuming an apr of 15-20%) - still way cheaper than a mortgage, and there is always the possibility that you can switch the loan to a lower apr product, once your credit file recovers (6 Years after the start of your IVA). ...and you are c£250pcm better off in the interim, than you are at the moment (obviously, as you will not be forking out £500pcm on your IVA).

WAY better than lose what is now I assume 'your' house (which will be forced on you - and I think you know that): At which point you risk being consigned to renting for the next 3.5 years ('cos you are not likely to get any mortgage). You will then be in danger of either 'frittering' away any surplus cash; and/or house prices will likely continue to rise, and you may find you have insufficient deposit/affordability to get a mortgage. 3-4 years down the line, for a comparable property.

Many people on this forum are understandably very wary of these sub-prime secured loans, but I think you may be the sort of customer where such a product may provide you with a considerable advantage over the alternative - IF you can get anyone to lend the relevant amount.

Worth discussing the above with your IP, and see what they think.

Sincerely hope you find a way forward which allows you to keep the house. Let us know how it goes.