My wife and I entered an IVA in Dec 2013 with debts of £345000. Our original payment was £200 then reviewed to £238 and now £583.
When we entered the IVA I was self-employed and my wife was working 30 hours per week.
Fast forward nearly 2 1/2 years, my wife has had a promotion and is working full-time hours and I am also employed full-time with the same (public sector) employer.
Our mortgage is now just under £150,000 and a conservative value of our home would be £300,000. It is a repayment mortgage and we have always maintained payments of this. Based on this I would consider us to be Equity Rich!
I've not seen anyone else suggesting this or saying that it has been done, but
a). Would it be acceptable to the creditors to clear debts with credit in the form of a mortgage
b). Would my current mortgage lender Nationwide) be likely to advance funds to us in these circumstances.
We have really turned a corner, and I think the IVA has now done it's job of getting us through an extremely difficult period so would very much like us to be able to use some of our "wealth" to return us to a more normal life.
Hi. You will not get a further advance from your lender, but Shaun Vickery, one of our two mortgage brokers on forum, has access to a product where the lender will offer secured lending to bring an IVA to a close by releasing some of the equity.
This could, if successful, end the IVA early, but you will not return to "normality", as you put it, until the IVA is off your credit records, which will be 2019 regardless of finishing early. Furthermore the secured loan will be at a higher rate.
However, bearing in mind that you will be looking at a 12 month extension, and the possibility of your IP pushing secured lending further down the line, it is worth discussing with Shaun, then your IP, as you cannot decide without the relevant figures.
Last edited by Foggy on Thu Apr 14, 2016 9:46 pm, edited 1 time in total.
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
Thanks for that Foggy.
I'm just batting the idea around in my head at the moment.
I understand what you say about normality, but my wife and I are both committed to not seeking credit in future so the stain on the our credit rating shouldn't be too much of an issue!
I would be interested to hear what the higher rate of a further secured loan for this purpose would be, if Shaun reads this thread.
Hi and welcome to the forum. As Foggy says, Nationwide would not consider this and it is important to avoid applying to lenders 'randomly'. Whether it's possible and/or appropriate will depend, to a large extent, on your other circumstances but it's certainly worth considering your options so that you an make an informed decision.
Specialist Mortgage Advisers. Highly Commended at the British Mortgage Awards.
Would the Nationwide not consider further advance purely on the grounds of the IVA? Our payment record with them has always been good, our outstanding balance with them has consequently reduced. Along with the reduction over time of the amount outstanding under the IVA the amount we would need to cover the full amount of our debt, plus our existing mortgage would be a LTV of about 55-60%.
From my point of view, given that we would have no other credit, we could more afford this than at any other time since our first mortgage in 1988.
It would never have been my intention to tout around different lenders, but I thought it would be worth a punt with our current lender.
I doubt they would regardless of your record with them.
Sharing from experiences of dealing with debt
The greatness of a man is not in how much wealth he acquires, but in his integrity and his ability to affect those around him positively.
Bob Marley. http://kallis3.blogs.iva.co.uk
On what grounds do you feel they would not lend? I'm not saying they would but , as time has moved on we could demonstrate that we are now in a position of solvency. I know there are will be legal definitions regarding time periods etc. but for us it would seem that what I assume is meant to be a vehicle enable people to right their own particular ship is now acting as a punishment!
We have never taken credit with a view to defaulting and from the start of this process have accepted that this is credit we have taken and it will be all paid back. We accept our responsibility for taking the credit. Creditors must also take their share for taking a punt. I think if we repay the whole amount of the IVA, NO harm NO foul.
Because you have the IVA on your record is enough to put any lenders off and most will ask if you have been in an IVA or had an arrangement with your lenders.
Unfortunately, they will also not know that you won't get credit again even if you tell them that.
Sharing from experiences of dealing with debt
The greatness of a man is not in how much wealth he acquires, but in his integrity and his ability to affect those around him positively.
Bob Marley. http://kallis3.blogs.iva.co.uk
Lenders do not have to have what we might consider a valid reason for refusing an application. They each have their own ( largely unpublished and ever changing) criteria.
There are some that will lend, if the IVA has cleared from your record, some that will lend after another 3 or 6 years have passed and a few who declare they will never lend to someone who has been in an IVA.
Personally I think these lenders are demonstrating the height of hypocrisy in some cases. Many have been pretty close to the edge themselves, some bailed out by us, the taxpayer and most have been guilty of what amounts to fraud in their own dealings as well as defrauding their customers over PPI (selling it in the first instance, then, when caught out, refusing valid claims again and again!).
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
I understand that lenders are not obliged to lend. I was asking the question to see if there is a protocol, etiquette or precedent! It may be worth a try as I feel we can assemble a pretty strong case. After-all they still need to lend money to some-one.
Anyway since I started this thread, just a couple of days ago, we heard that something has turned up re PPI, so I'll wait to see how we get on with that.
I absolutely agree with you re lenders. They got carried away by their own greed. It takes two to tango!
There is no protocol or precedent - each lender has their own criteria. Unfortunately there are probably more people with a clean record that they can lend to than those of us who have had financial problems.
Sharing from experiences of dealing with debt
The greatness of a man is not in how much wealth he acquires, but in his integrity and his ability to affect those around him positively.
Bob Marley. http://kallis3.blogs.iva.co.uk
I'm afraid to say that, although I entirely appreciate that you feel able to put together a sound argument to justify Nationwide lending to you again, you may actually inadvertently damage your prospects further in doing so. I have been down this path with customers many, many times before. The reality nowadays (please don't shoot the messenger!) is that individuals within a lender are rarely empowered to make even entirely logic judgements and therefore you either fit their criteria or you don't. It's the computer says 'No' syndrome and I'd stake my reputation on the fact that Nationwide will decline your application, despite the fact that you may receive some initial encouragement, by which time you may have another credit search recorded against you. I'd strongly recommend you seek specialist guidance before you do anything too material.
Specialist Mortgage Advisers. Highly Commended at the British Mortgage Awards.
