Are we still a risk?

[bigpete]

For the Experts;
For those of us who are in IVA's/Trust Deeds and have to release equity by end of term, this is usually via a remortgage, I know that there are less and less products out there and will be the sub-prime market, but, as 'we all' have been paying our full mortgage AND our disposable income for 36 - 60 months, does this have a bearing on getting a remortgage in that 'we' have paid both without fail, have no loans or credit cards outstanding, say, compared to someone who goes for a remortgage having loans and credit cards and maybe a chequered recent history in mortgage payments, or are 'we' still treated as a risk?

[Soulgrowth]

I think this comes back to that age old irony that I have never understood which is why it is that the more credit one has the more one is considered creditworthy!

I think this is a really good question bigpete and will be interested in the experts replies.

In essence, those of us who have addressed out debt issues with a mutually acceptable agreement (IVA) are going to be the ones who will have the most disposable income in the future, rather than those still weighed down by debt. I have wondered for a long time now how this will affect our credit worthiness in the future.

Debbie

[MelanieGiles]

The brokers I work with regularly report that it is currently easier to re-mortgage someone in an IVA with a good payment record, than someone in financial difficulties outside an IVA. This trend may not continue as the credit crunch bites, and I predict that there will be many IVAs varied over the next couple of years as a result.

[Soulgrowth]

I wonder whether things will go full circle and come back to a position whereby mortgages are granted on an individual case basis. I remember when applying for my very first mortgage we were 'interviewed' by our then bank manager (Mr Penny!) for our suitability. It was interseting to see that this point came up on the BBC2 programme during the week.

Thus money will be lent in future on the basis of a personal recommendation and individual integrity rather than if the ticks fit the box.

Debbie

[joh71262]

I have to say that if I was at the beginning of year 4 and they were looking at equity release now, I would be very unhappy about releasing any equity, no matter how small.

When they do the equity release, do they release it to pay the balance of what you owe or do they release as much as they can to repay the debtors over and above what has been agreed if you go full term ?

[Adam Davies]

Hi
As much as you can according to affordability and loan to house value[normally 85% max]
The maximum that you could raise will be equal to your full original debt and IP fees less payments made
Regards