IVA + Remortgage

drknot · Joined: 22 Aug 2007 Posts: 1

Good evening,

Currently I owe approx £60,000 in unsecured loans and CC's.

I have a mortgage and owe roughly £60000 on that.

The house value is approx £150,000 so I presume that as part of an IVA I would be asked to remortgage for roughly the full amount of the debt, as the total mortgage value would be £120000 and approx 9 times my salary, there is no way I would be accepted for a mortgage of that value.

So who would arrange it? If it was one of the lenders, I presume it would be a rate most favourable to the lender and therefore not actually reducing my repayments.

Lots of other questions, but gradually finding the answers in previous posts, thanks for a most informative site.

BigBaldTone · Joined: 04 Jan 2007 Posts: 5

Not that I'm an expert, but here's me opinion...

If you owe £60k in loans etc, and have a mortgage of £60k - with a potential house value of £150k - then surely you'd not need to even consider an IVA.

I realise you may not be able to afford to re-mortgage, but where there's a will there's a way and with £90k potential equity in your property - I'd seriously look into utilising that to clear your debt. Surely a remortgage repayment is less per month than the total you're paying on your current mortgage and loans etc??

Whilst an IVA is great for those with very little assets and lots of accumulated debt, it deosn't seem to be the case for you......

Remember, if you go the IVA route - it's for 5 years, your credit rating is screwed, and possibly (as has happened to me) you get potential job offers refused due to failing a credit check.

But, this is only my opinion.......and the choice is yours to make after all

John · Posted: Thu Aug 23, 2007 9:18 am Post subject:

Hello DrKnot (and welcome).

Due to recent events such as a colossal boom in the property market, and the fact that large lenders are now trying to compete with the sub-prime sector, you may well find middle-grounded assistance out there.

One would presume that your repayments to unsecured debts of approx £60,000 may be rather high. If you were to remortgage, the repayments are likely to be lower than the amount you are paying. In practice, you aught to be able to afford the remortgage. If you speak to a mortgage broker, they should be able to assist you further.

With regards to an IVA, it doesn't sound like you would be suitable one. Based upon the information you have provided, it does not sound like you are insolvent.

If you complete our Debt Analyser on the main-page you will then be given a response from our advice model, and someone could call you back with your options.

An informal debt management plan may be a better option if you cannot afford to remortgage. However, if you have defaults and your unsecured credit is will collections agencies, these agencies may write off some of the debt in a Full and Final settlement.

Finally, please think carefully before remortgaging your property. If you cannot maintain the repayments your home may be reposessed.

Best of luck. John

Boo · Joined: 18 Jun 2007 Posts: 8

DrKnot,

welcome to the forum.

After reading your first post, it looks like you have to look at all options available to you. You are lucky to be in a situation to have the equity to repay the debt although it is tied into your property.

if you are looking into remortgage, as would seem a good option to you, becareful how much you re-mortgage for! make sure you can afford to meet the repayments as if you fall into arrears, they will repossess your home and take all the equity! this is something you obviously want to avoid at all costs.

Have you considered selling your property? If you cannot afford to re-mortgage, this maybe the only other option and you will have a nice deposit left to start again. Maybe your creditors may accept reduced settlement fees if you pay them in full....

It may be worth your while calling one of the IVA firms though to see if there is any advice they can give you...

As BigBaldTone mentioned, if you were to go into an IVA, it would be shown on your credit rating to but to be honest, If you are insolvent (which you will be if you need an IVA ), it will already have scarred your credit rating. I found that my debts i had before entering into my IVA did enough damage to my credit rating anyway, my IVA made no difference.

I do hope this helps.

Boo x