If you have a bad credit rating, it can be difficult to get a loan with a decent interest rate. This is why it is crucial to discuss any new loan with your IP or financial advisor. If you do not, you can put your home and finances at risk. If you don’t make your repayments on time, you could end up being declared bankrupt and losing your home.
An IVA is a legal way to restructure your debt. It will stop your creditors from repossessing your property or taking any other legal action against you. Your IVA advisor will examine your debts and let you know which ones are more important. It is important to research your advisor before you hire them. They will also work with your creditors to help you get the best deal.
A secured loan IVA will also allow you to keep your assets. This type of IVA is a good option for those who are unable to risk losing their property to creditors. It involves a trust deed, which gives legal title to a trustee who holds the property as security for the loan. This simple legal document can secure a variety of different types of loans.
Often, taking out a secured loan is cheaper than remortgaging. The interest rate on a secured loan is much lower than the interest rate on a normal mortgage, so it can be a good option for many people in an IVA. However, if you have equity in your home, it may be necessary to remortgage during the final year of the IVA.
If your share of equity in your property is PS5,000 or more, you may be able to get an equity release loan and remortgage your property. The new mortgage must be worth at least 15% of the property’s value. The new mortgage must be paid off within six years or before you reach the state retirement age. Equity release will also shorten your IVA term to five years.
If you are considering an IVA and want to borrow more money, you must discuss it with your IP. You need to explain your circumstances and discuss the options available. The IP will need to approve your application, otherwise it will be ruled that you are violating the terms of your IVA. This could lead to a termination of the IVA or even legal action.
You must be able to afford your new mortgage payment. The new loan repayments must not exceed 50% of the IVA payment. However, you will still be required to make monthly payments in order to maintain the IVA. Your IVA Supervisor will review your application six months before it is complete. He or she will decide if the new mortgage repayments are affordable and will not put you in a worse position.
In a secured loan IVA, the borrower will take out a loan against the equity in his/her house. In return, the lender will deduct the equity release fees from the amount owed to your creditors. This arrangement is often used near the end of your IVA. It will delay repayment of your unsecured debt.