Equity release - 4th year

bubblesqueak

Hi,
I've been on this site before and requested info. re: negative equity but have recently found out that there may be 'some' equity in the house. My husband needs to release £22,500 in year 4 (next Aug.). Current mort =£164,000. House has been valued at £185,000. Our joint earnings would meet the £185 BUT obvioulsy we can't release it because of the LTV ratio. Does anybody have any experience of what may happen? Will our creditors bankrupt us and force us to sell? We have a 10m old baby and a 7yr old daughter and haven't missed a single IVA payment.

TakeittotheLimit.

If theres no equity then usually you would pay into the IVA for another year extra,it should really say so in the chairmans report you would have got when you IVA was accepted.

bubblesqueak

There is some equity. About £21,000 (maybe £30,000 at the absolute outside) but becuase of loan to value ratios we won't be able to tap into it with a remortgage. Not sure how this is normally viewed.

Dr_Hook

It's usually phrased realisable equity, so while there may be equity in the property but you can't remortgage to release it due to the LTV, it isn't realisable.

Like TITTL said, you can probably expect a 12 month extension to the IVA, but check your chairman's report or speak to your IP to be sure.

baileybee

Hi there. I really don't think you need to worry as we were told recently that if by year four we can produce two letters to say we cannot remortgage the house to release equity - either because of finances or LTV then we will just have to pay IVA for one more year but the house will always be safe (as long as keep up the payments!)

Good luck

Plumsy_2

s Reading this thread has helped me also, as we are going into the 5th year and told we will have to go to a 6th year. What is an LTV?

hopefulfooluk

Plumsy wrote: »

s Reading this thread has helped me also, as we are going into the 5th year and told we will have to go to a 6th year. What is an LTV?

LTV = Loan to value

It is expressed as a percentage - eg a lender offering a maximum 85% LTV will only lend £85,000 on a house worth £100,000. So even though there may be some equity there, if releasing it would push the mortgage past the lender's LTV limit, it's not accessible.