Equity Release

Franklee_2

I have just entered my 4th year of IVA. I was wondering if anyone has any recent information regarding the current availability of adverse credit mortgages, maximum LTV etc.

Charco_2

Generally you should be looking at LTV of 85%... What is your current Mortgage and House Valuation?

Franklee_2

Thanks for the reply.
85%, as much as that? having trawled through a few websites i thought i was looking at 50-65%.
Anyway, to answer your question, i have 85k outstanding, house value is approx 135k.

Charco_2

Well the general market feeling is that no lender will lend more than 85% (I know the market has fallen to !!!!!! in the last 18 months but for the purposes of calculating your equity it's still 85%)

So your home is worth £135k... 85% is £114,750 - so on paper the equity you would be expected to release would be around £30k.
Is the house yours alone? Or do you have a wife/husband/partner?

You're going to have to try to find a remortgage (or a secured loan) to release this equity... you might not be able to however! (but at least you can show that you tried). Then you look at other ways to deal with it (like a contribution from a friend or extended payments!)

Franklee_2

Thanks once again.
I am in a joint IVA with my wife, we have the 'extra 12 payments' clause in our agreement. We are both in our middle 50's, so, (i would imagine), the repayments on a equity release of that scale would be fairly punitive?.

Charco_2

Another thing to bear in mind though is that there should be a clause saying that your new mortgage repayments can't go up by more than half of your monthly contributions to your IVA

Franklee_2

Thanks for the info.
We don't have that clause you mention, just the equity release clause, then the option to extend for a further 12 months if equity release fails.