Equity Release

[wakeywakey]

Hi Guys
Month 54 has arrived and Unity want me to Equity Release using SP
This is so stressful!
Obviously I don't think that is in my best interests as I am 62 and wife 60
I reckon we have £35,000 equity between us and still owe £40,000 of the initial debt
What are the chances of getting a remortgage do you think and can we turn down a secured loan if offered?

[Foggy]

If you are offered a loan you cannot turn it down as long as it fits the terms IE the term does not go beyond the later of your current term or state retirement age and the repayment attributed to the released amount does not exceed 50% of your IVA payment.

Select are normally pretty good at sticking to the 'rules' and are often far easier to work with than your IP is !

When I was in my IVA there was a clear distinction between a remortgage and secured loans and they could then insist on the remortgage but could not force a secured loan, as they are different beasts. However, as time has passed, this distinction has become very much blurred. However, as I said, Select do try to act fairly and within the terms agreed in the IVA.

[bowline]

How long does your current mortgage have to run?
How large are your current IVA payments and are they affordable now, with gas&electric having gone up, petrol, food etc? This is important as the cost of any equity release has to be less than half your monthly payments so if you can argue your current payments need to be reduced a lot, it may mean that no equity release is possible.

[wakeywakey]

Mortgage runs till 2025 but no way of paying it off, so looking to remortgage once out of the IVA
But now we will have a secured loan so won't be able to remortgage more than likely.
I feel this is forcing us into selling our house before 2025, whereas the whole point of the IVA was to keep our house.
We had already asked Unity to reduce payments because we are really close to not being able to afford the £260 per month payments (£130 each)
Asked them to make it £110 each due to massive costs rise but they never got back to us, probably because they knew this ER was due?

[kallis3]

You will not be forced into selling your house. At worst you will have an extra 12 months added on in lieu of equity.

[Foggy]

The affordability will also affect the amount you can release ( if anything). You might be restricted to half the IVA payment, but that is, in no way, a minimum ---- the IVA terms might say £130 is within the terms, but any potential lender has to carry out due dilligence and ensure you are not overstretched, especially in the light of the current cost of living hikes.

[wakeywakey]

You will not be forced into selling your house. At worst you will have an extra 12 months added on in lieu of equity.

How do you know?
I'm not really feeling any certainty from anyone!

[wakeywakey]

And if Unity already know this, why put us through this hell?
Surely they must know if and what someone can afford before they send this to the brokers?
I just don't get it!

[Foggy]

You will not be forced into selling your house. At worst you will have an extra 12 months added on in lieu of equity.

How do you know?
I'm not really feeling any certainty from anyone!

You will either release a sum of equity or extend by 12 months --- they will not force you to sell the house. Let Select do their thing and then see where you go from there.
A secured loan, if it comes to that, should not stop you remortgaging once the IVA has cleared down.

[Foggy]

And if Unity already know this, why put us through this hell?
Surely they must know if and what someone can afford before they send this to the brokers?
I just don't get it!

Unity have to "put you through this hell" because that is what was agreed by you and your creditors at the outset. Speak to Select --- they are easy to get on with. And, no, Unity won't know what someone can afford, or what is even available on the market --- it is not their field of expertise.

[wakeywakey]

And if Unity already know this, why put us through this hell?
Surely they must know if and what someone can afford before they send this to the brokers?
I just don't get it!

Unity have to "put you through this hell" because that is what was agreed by you and your creditors at the outset. Speak to Select --- they are easy to get on with. And, no, Unity won't know what someone can afford, or what is even available on the market --- it is not their field of expertise.

I'm sorry, but I disagree with you. Unity know everything about me, far more than a broker, so they know that I simply cannot afford a loan or a remortgage.
If I am asking them for a reduction 2 months ago due to shortages in expenditure, then obviously I am seriously under pressure. Which part of "not coping" do they not understand.

Even if Select find we can't afford anything and we have an extra 12 months iva payments, I will still think it's a disgraceful way to treat someone.
I've played the game for 5 years nearly, gone without food, household goods etc. My boiler is non efficient but I can't afford a new one. All for someone who I never heard of to tell me I have 40k equity which the creditors desperately need, oh "and you agreed 5 years ago", come on, anyone would agree to near enough anything to get their IVA passed wouldn't they, doesn't mean they ever thought it would happen?

[Foggy]

Wakeywakey --- please, do not apologise for disagreeing with me. You are as entitled to your views as I am to mine.

I appreciate your frustration, having been in my own IVA, with it's own hurdles.

My last word on this topic will be to wish you luck going forward.

[wakeywakey]

Some people on another forum have said I should have missed the last few mortgage payments, then Select wouldn't be able to even consider a loan because of the missed payments. Too late for me now, but an interesting tactic?

[kallis3]

I don't think that would help - you could end up losing the house and going bankrupt at the worst but ultimately it will affect your credit rating even more.