IVA company asking me to remortgage my home

DFS

Hi all.

I am currently in my last year of my 6 year IVA with StepChange.  They have just emailed me saying that as I agreed to remortgage my property as part of the agreement, I need to get a redemption statement from my mortgage company.  The emails says 'The amount required to repay all the debts secured on the property is deducted from 85% of the property valuation.  It says if my net worth share is over £5000, I will have to remortgage.   How can I calculate this roughly?  My property is worth around £82k.  As of 31/12/22 the total redemption sum was £58k.

Can anyone help?

Thanks

fatbelly

Are you saying your equity is 24k?

85% of 82k is 69.7k. Mortgage is 58k, leaving 11.7k for release (in theory)

Have a read of this

https://debtcamel.co.uk/iva-equity-release/

ManyWays

StepChange are usually reasonable to deal with and will not ask you to take out a secured loan. And no lender is likely to offer you a new mortgage.

StepChange are probably going through the motions before saying you will need to carry on paying for another year, you need to think how hard that will be. Has your mortgage gone up? 

DFS

Right, so Stepchange has replied and claim my property is estimated at 98k which is totally not correct.  Can I question this value as its worth no more than 82k

sourcrates

Of course you can challenge this, and I would do so, very vocally.

fatbelly

Get a valuation that you are happy with.

Step change have probably just used Zoopla or similar

DFS

Hi all

I replied back to Stepchange asking them where they got they overly inflated valuation from and got this reply:

The valuation on your property was completed by an Independent online desktop valuation tool.

If you feel the valuation is too high, I can refer this to a local estate agent or you could provide a valuation of your own.

I must advise that even if your valuation was lower for example by £20,000, this would still leave over £5,000 equity in your property and you would still be required to proceed with a re-mortgage request.

Please let me know how you wish to proceed so I can consider your options.

So do you think they will want the whole amount of equity?  Would it be better to get my own independent valuation and I assume when re-mortgaging, my monthly payments will increase defeating the object as I can only just afford my current monthly payment.

fatbelly

It's definitely best that you get an accurate valuation.

As I said before, they spent 30 seconds on Zoopla

The fact that they are saying that a remortgage is required does not mean that you will end up with one. You may not be a very attractive to be proposition when it gets to the final decision by an actual lender.

You would then just make an extra 12 payments