www.iva.co.uk

I am just about to enter my 4th year of my IVA. I have the equity release clause, what will happen if the banks won't allow us to re-mortgage?

Just when I thought there was light at the end of the tunnel.
[V]

Hi Zeb and welcome to the forum

The answer to this will really lie within your proposal, so dig it out and have a good read through. You may be required to pay an extra years' contributions, but this should have been fully explained to you by your IP from the outset.

If in doubt have a word with your IP who ought to be able to explain this to you.

Thanks Melanie, I will do that.

Bit of a bummer, but the way I look at is that if I have to remortgage to release whatever equity, I will be paying more into my mortgage for a long time.

If I have to continue on with 12 months payments, it will be a lot less and then I will be debt free with no increased payments anywhere.

I guess so, also with the value of property going down there won't be so much equity to release??

See what it says in your proposal as to what happens if you cannot release any equity or the value of that equity has diminished.

I know with ours that if we have less than £5000 equity, then the house is taken out of the equation and the IVA will conclude in 5 years and not the 6 it will do if we can't remortgage.

My IVA was approved in Aug 2008 and I have to get my house valued in year 5. If there is more than £5000 equity we have to remortgage if there is less we will have to pay for another year which will mean our IVA will run for 6 years. As I have been diagnosed with lupus and will be 44 when we are in our fifth year I am going to try and see if I can continue paying the IVA for another year as dont want to remortgage incase my illness gets worse Locko

Sorry to hear about your illness Locko.

I know it's a long way away, but I can't see house prices having bounced back to what they were a year or so ago. You might find that you're ok.

Thanks Kallis, thats what I keep hoping as at the moment due to the secure loan we are in negative equity. Purely selfish reasons I hope the house price dont rise!!

Unfortunately, we had some equity when I went into the IVA, ok that will have gone down now, but by the time I come to remortgage, the secured loan will have about 12 months to go, and my mortgage is a repayment one, so the capital will have come down, so I think I will have to try for the remortgage!

Sorry to hear about your illness Locko x

In 5 years, the financial markets and the housing economy should recover to about 60% of what it was in 2007.Its true that House price tends to lag behind in recovery. But no one wants the turmoil to continue. Businesses cannot sustain itself in this state of no demand for goods and services and burning through cash. Governments cannot borrow more and more with post dated tax revenues(you are paying) to pay for bail outs and guarantees for mortgage interest holidays etc.

An entire next generations could be liable for losses incurred - would anyone want their kids to pay even more tax than themselves so that people now can have 0% interest mortgage payment interest for life and low food prices ??? Its all about knock on effects.

In less five years house prices should stop decreasing,it cannot continue to drop 1 percent a month as from Aug 2007 till 2013 as it would mean over 45%.No...that would be national disaster.

Some Equity will return in that 5 years, no I do not think it will be back to 2007 prices(that will be more than 5k easy).Why does does people want Eq in their property to vanish??? It is oxymoron- everyone looses out, everywhere. Think global not ME ME.

Are you in an IVA Kalla? You've probably said but I can't remember. I know if I was in an IVA I would want my property to be in negative or very low equity so that I wouldn't have to remortgage. Maybe that is selfish, but why would anyone want to extend their mortgage if they didn't have to.

Kalla - the recession will be over within 12/18 months and inflation will come to our rescue and property prices will start to rise. It has all happened before 1973, 1989 etc. Wait and see!