I wonder if anyone can offer their advice - My husband & I have a joint IVA and have just 3 month to go to complete the 5 years. As part of our agreement we are supposed to raise a re-mortgage (the figure originally quoted for re-mortgage was £21k)or if we are unable to raise a mortgage then we would continue paying for a further 12 months.
We have been in contact with a mortgage advisor who was recommended via our IVA company. He has managed to secure a re-mortgage but it would only mean introducing approx £7k.
Our IVA company have stated that if we could raise £5k now with the re-mortgage but then continue payments for an additional 12 months @ £750 per month then they would not need to approach the creditors for a variation meeting as we would have achieved the minimum dividend of 48p in the pound.
However, I do not think that the mortgage company will agree to us continuing the payments and would only be willing to give us the re-mortgage on the understanding that the IVA was fully completed.
My IVA company are saying that, if this is the case, then they would have to apply for a variation meeting to see if the creditors would accept a lower dividend and that they could say no and it would obviously cost money for the variation meeting.
My questions are:
Do we have to raise a mortgage if we can or can we reject the remortgage and continue for 12 months paying what we currently pay which is £1,200 per month?
Or do you think that we can insist to our IP that they put forward the £7k that we can raise and offer a F&F offer to the creditors even though they could reject it and it would have cost money to do this?
We are so confused on which way to go.........any help would be appreciated.
hi firstly welcome to the forum. It's unusual to read these days of a remortgage being offered and it's ususal for the 12 extra payments in lieu of equity.
I'm not sure of a concise answer for you so we'll keep this bumped up and one of the IP's that post will be along very soon to offer some excellent advice.
IVA final payment left the bank on the 26th January 2013...looking forward to a debt free future.
Agree with Lesley, I've not heard of anyone being able to remortgage at all.
Welcome from me as well.
Sharing from experiences of dealing with debt
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I too am surprised that we have been offered a re-mortgage due to the current climate.
We were actually offered a re-mortgage by the same company last year but with 15 months to go on the IVA at that time the creditors insisted that we carry on paying up until the end of the IVA 5 year period. The mortgage company then withdrew their offer as it was conditional on the IVA being completed.
We are now over 1 year on and the company are still willing to offer the re-mortgage but our IP is saying that the same principle applies and that we would in effect have to pay the lump sum from the re-mortgage but then have a 12 month extension paying an additional £9k (£750 pm x 12).
It will be intesresting to see if the experts agree or if there is an alternative that we had not considered.
Wish I could be more helpful but I'm merely someone within an IVA, however, I'm confident within time one of our IP's who post will be along hang in there x
IVA final payment left the bank on the 26th January 2013...looking forward to a debt free future.
I would imagine that if you have agreed at the outset of your IVA to a "re-mortgage" clause and subsequently are able to obtain a mortgage within the terms of your "re-mortgage" clause, then you will need to take out the mortgage.
However, notwithstanding the above, I would be very sceptical of accepting any recommendation from whatever IVA Company in relation to particular remortgage Companies. I honestly dont think its good practice to have IVA companies, Mortgage brokers and creditors sharing from the same teapot so to speak....there could quite possibly be a "conflict of interest" and not to your benefit.
Last edited by Pennyless on Wed Oct 05, 2011 1:05 am, edited 1 time in total.
I came into this world with nothing and still have most of it left!
Didn't think that if you re-mortgaged then you would have to do the the extra 12 months as well. It would appear that as your re-mortgage is considerably less than that anticipated at the start of your IVA then you are expected to make up the shortfall by paying less for the next 12 months (ie monthly payment less increase in mortgage). I would be tempted to ask the company to go to a variation meeting and offer the equity as full and final, after all you have complied with all that has been asked of you. If they say no... then you will have lost nothing and know that at the end of the next 12 months you will be debt free.
I agree with kaykay, I would ask the matter to be put to your creditors, whilst your IP can advise you, they dont know which way your creditors would vote at the end of the day.
The offer should be "finish at the end of 5 years and they get the remortgage money OR you just carry on as you are till end of year6!
You only have a remortgage provided the IVA goes away, so its up to your creditors to decide which they want, Remember you probably have to pay the extra repayments on the mortgage for 15 to 25yrs (just guessing) so in the long run the IVA remortgage will be around for a long time to come!
Many thanks for you replies -
KAYKAY - This is what I thought of doing but was put off slightly by the IVA company stating that by making an offer of a F & F that was quite a lot less than originally required it would be likely that the creditors would refuse the variation. Their thought were that by paying an additional £9k on top of the £7k then they would not need to apply for a variation as it would mean that we would meet the minimum dividend promised at the outset.
I was just wondering where we stood in terms of insisting that the "lump" from re-mortagage be offered as F & F and then was rejected. If it is that we just revert back to paying an additional 12 months then it may be worth the risk - it is just that the IVA company kept stating the costs involved in calling a varioation meeting etc.
Pennyless - I would normally tend to agree with you but the mortgage company is actually a reputable building society with a "normal" APR.
Sorry jpj - must have been typing our replies at the same time.
I agree with you in terms of the length of time to pay the remortgage v paying off the IVA - however, if we do manage to finish with the re-mortgage then we will paying £300 pm less then we are paying with our current provider.
My thinking was that this £300 together with the £1200 we have been paying every month to the IVA would enable us to pay additional into the mortgage for the next 6 months to pay off the extra lending - hope that makes sense!! It still early in the morning for me!!
My take on this would be that I am guessing your proposal states to remortgage to release £21k into the IVA or continue for a further 12 months?, if that is the case then you clearly cannot remortgage for £21k, only £7k so yes I would be offering that as a F&F or no remortgage and continue with an extra 12 months, I wouldn't be prepared to do both as that's not sticking with the original agreement anyway, good luck x
I would certainly ask the IP to arrange a variation meeting to offer the £7 as a F & F. How much is a variation meeting? I thought it was around £300 (but I could be wrong). Sounds like your IP is trying to avoid the variation meeting for some reason!
I think my IP charged £500 for each of my variation meetings!...obviously if the remortgage is accepted as a full and final you will save on the IP fees for year 6 anyway!.
My full and final offered below the amount promised at the start of my IVA ( i think creditors do realise the world is a different place from when you started your IVA nearly 5 years ago) and it was still accepted.
I am a little mistified as to why your company are reluctant to a variation meeting (I beleive the costs of which are around £500.00).
Our original proposal was to release £34k by way of equity release in year 5 to ensure a minimum divident of 73p in the pound. We were unable to re-mortgage at all so a variation meeting was called with the following proposals.
12 months extra payments at current monthly payment in lieu of equity (this gave them an additonal £10.5k as oppose to the anticipated £34k).
Waive the original dividend 73p - new expected dividend based on above 50p.
Removal of property from the arrangement.
All the above were accepted.
In my opinion if you can re-mortgage and raise 7k it is better than not having any equity at all, so don't see why you should pay an extra 12 months as well...
Please note this is just my opinion, I do not know the legalities behind IVA's as everyone's is individual as the name suggests. Perhaps an expert will be along soon to help.
