Supervisor Wants Equity Release

Templemore

My wife and I are in a joint IVA that has less than 6 months to run ( 5 yrs) and at the time it was agreed it was explained that there would be a requirement to look at remortgaging towards the IVA cessation date, but they explained that it was highly unlikely that a lender would offer a loan/mortgage because of our age ( currently 6 & 65). It would be probable that we would have to extend the IVA by another year and then be clear of it. My wife is employed and me, self employed with a dwindling income and a relativelay small private pension. State pension is 66 earliest.  The Supervisor has written and suggested that we speak with his nominated specialist broker to attempt to release equity for the benefit of the creditors. We have a substantial interest only mortgage, fully upto date and have both worked hard to maintain the smooth running of the IVA.

The new products in the mortgage market place may mean that we DO find a lender and this scares the "proverbial" out of both of us because the equity is all we have left. How far can they go in taking equity and does our age come into the equation ?

mwarby

My reply from the other thread

I think you still need to attempt equity release, if/when that fails you can look at extending the IVA. There’s a lot of equity there, I can imagine the creditors being keen to try and release some. Worth bearing in mind that it may have been a close thing between IVA and bankruptcy for the creditors, as bankruptcy would have released all that equity 

mwarby

You might want to take a look at https://debtcamel.co.uk/iva-equity-release/

The rules aren't set in stone an IVA is individual, the bits below are based on common terms

Basically they can't force you to go above 85% LTV, the payments have to be affordable and can't be more than half your IVA payment

Your age isnt a consideration in terms of the IVA unless you have special terms in the agreement itself, but it will make finding a willing lender that bit more difficult

Neutrinno

Templemore said:

My wife and I are in a joint IVA that has less than 6 months to run ( 5 yrs) and at the time it was agreed it was explained that there would be a requirement to look at remortgaging towards the IVA cessation date, but they explained that it was highly unlikely that a lender would offer a loan/mortgage because of our age ( currently 6 & 65). It would be probable that we would have to extend the IVA by another year and then be clear of it. My wife is employed and me, self employed with a dwindling income and a relativelay small private pension. State pension is 66 earliest.  The Supervisor has written and suggested that we speak with his nominated specialist broker to attempt to release equity for the benefit of the creditors. We have a substantial interest only mortgage, fully upto date and have both worked hard to maintain the smooth running of the IVA.

The new products in the mortgage market place may mean that we DO find a lender and this scares the "proverbial" out of both of us because the equity is all we have left. How far can they go in taking equity and does our age come into the equation ?

Any equity for creditors is capped up to 85% LTV and new payments on a mortgage can't exceed half of your IVA payment on top of your existing mortgage payment. Any new mortgage would also be on a repayment basis, so given you have a 'substantial' interest only mortgage, the likelihood is it won't be possible to remortgage converting to repayment within half the IVA payment on top of your current mortgage payment. This would just leave a second charge mortgage option. Your ages WILL be taken in to account, as any new mortgage can't exceed the LATER of your SRA or current mortgage end date. It will have to be fully affordable for now and the future, so your retirement income would be taken into account.

Templemore

Thanks for that guidance - the mortgage broker/specialist lender suggested by the Supervisor is due to phone me today - it's good & comforting to be pre-armed.

Templemore

Just a follow up on my question and the replies. I have now had confirmation from the specialsit broker that they will be unable to source a mortgage to release equity and they will advise the IP accordingly. There is no mention of a secured loan in the IVA papers, so am I correct in assuming it will go straight to an extra 12 months ? We will have 17 repayments left if this is the case and our son has offered to pay this and suggested that we ask for a discounted settlement figure. At our age it is not our intention to borrow any money so having the IVA on our credit record for 12 + months isn't an issue.

Neutrinno

Templemore said:

Just a follow up on my question and the replies. I have now had confirmation from the specialsit broker that they will be unable to source a mortgage to release equity and they will advise the IP accordingly. There is no mention of a secured loan in the IVA papers, so am I correct in assuming it will go straight to an extra 12 months ? We will have 17 repayments left if this is the case and our son has offered to pay this and suggested that we ask for a discounted settlement figure. At our age it is not our intention to borrow any money so having the IVA on our credit record for 12 + months isn't an issue.

That is the likelihood yes. If there is no remortgage option then your paperwork should propose a further 12 months of payments. 
Yes you are within your rights to offer a full and final settlement based on the remaining contributions or less.