Problem in future!!!!!!!!!!!!!1

[stickman]

Thinking of IVA but could be problem in the future.
Mortgage to go to interest only, no 4 year equity release,mort at 113k. If I go on iva at 5 year point mort still at 113k but I will only have 5 years till I retire and obviously could not afford repayments on 113k over 5 years.
Any advice please
Thanks

[Adam Davies]

Hi
If I understand your post correctly you are thinking of going into an IVA and will be required to convert your mortgage to interest only for five years with no equity release in the final year.You are then concerned that you will only have five years left to turn back to a repayment mortgage and clear your mortgage.
After the five years you will have all your disposible income to yourself so could use this to repay your mortgage,however I think that you need to speak with a mortgage broker to find out how much you would have to increase your mortgage payments by to compensate for the missed five years of capital repayments.
Regards

[stickman]

Thanks Andy,
You read the post correctly and as you have summised I will have all my disposable income back again at the end of the iva however with just using the FSA mortgage calculator a 113k mort over 5 years =2207 pmth.
Currently paying 1286 diff of 921 can't see how I'm going to do anything.

[MelanieGiles]

I think that you will struggle to get an IVA these days without a final year remortgage, regardless of age, as even if this is not provided for in your proposal, your creditors are likely to modify it in at the creditors meeting. You are, however, very wise to be concerned about moving your mortgage to interest only when you are so close to retirement.

How much equity is there currently in your property? And have you thought about downsizing or even selling and going into rented accomodation, in order to help repay your debts before retirement.

[stickman]

Thanks Mel,
Approx value of house 130k = 17k equity. If I considered downsizing who would give us a mortgage with current credit problems,also house prices around here are of similar value and trying to get somewhere to rent is nigh on impossible and rents are so high you might as well buy.
All advice greatly appreciatedas at my wits end can't see any way out BR not even an option.
Thanks again.

[MelanieGiles]

Assuming that your mortgage is therefore £113k, and using the formula of borrowing additional monies based upon 85% loan to value which now forms part of IVA protocol, you would only be able to borrow a maximum of £110k and therefore there would be no equity to raise.

I appreciate that this is subject to future fluctuations in the property and mortgage market over the next few years, and that the issue of affordability when you retire is still an issue, but you are going to have to live somewhere at that time.

If you go bankrupt now, the equity in your property will vest in a Trustee who will need to recover it for the benefit of the estate.