Iva last 6 months equity release?

booboobaby

Hi, hopefully someone here can answer my questions. My partner is in the last 6 months of his IVA :T and we have been told to get a valuation of the house and a redemption certificate from the morgage company, the morgage remaining on the house is 61 thousand the house is worth roughly 70 thousand, I have read on here something about an 85% value in order to see if there is equity could someone please explain to me if this is after they deduct the 5 thousand and how it works also my mother has just come into some money and rather than us have to continue paying the IVA for another year or having to remorgage she has offered to give us the outstanding equity, will the IVA accept this or is it not allowed. Thanks in advance x

FoggyBrain_2

Hello. Many ( not all) IPs value the house on a forced sale basis and use 85% of the full market value. So, if the house is worth £70k at full value, a forced sale value would be £63,750. You owe £61k, so the equity is £2,750 --below the £5k deminimis level. Therefore, technically, there is no equity available. However, your IVA pre-dates the modern protocols, so equity might be dealt with differently in your proposal. Some older proposals actually predicted the equity and the less helpful IP's are holding client's to it!!! However, the enlightened ones propose a variation to bring the proposal in line with the modern practice.

If you do need to provide a sum in respect of the equity ( and I would argue with my IP that none is due ... subject to the proposals wording on the subject), then there is no reason why you cannot get a lump sum from relatives.

booboobaby

Thank you for replying, the IVA was taken over by another company and he signed a form to bring the IVA up to date so I'm assuming that the 85% rule would apply. Thanks again for replying this whole thing has gone over my head on more than one occasion.

FoggyBrain_2

Hi again Booboobaby. That form the new IP signes was probably just confirmation that the IVA has run successfully to the time it was taken over. It won't have changed the terms of the original proposal as that would require a variation meeting. Hopefully you have one of the more sensible IP's anyway.

When you get the valuation tell the agent you need a quick sale, otherwise he will value it high (and, at the moment buying prices -- the money actually changing hands -- are between 10 - 20% higher than the levels agents are valuing at!).

booboobaby

Hi again, just had the valuation done this morning, they valued it quite low as the houses in this area are not selling well. I told them i was looking to sell so therefore would get the free valuation, they wrote the valuation down on a contract that they needed us to sign, is this ok to send to the IP or does it have to be a letter or something. If so how can I get them to do this without them charging a fee. any advice much appreshiated thanks.

FoggyBrain_2

It largely depends on your IP as to what they will accept. I have heard some going on internet valuations, one that accepted a note on the back of a business card .... but others want to full blown typed out fur lined version! Which is your comapny? And .. what was the value in the end ? (Just being nosey ).

booboobaby

Hi, the company is Grant Thornton. The valuation was for 62,950.00 for a quick sale, so no equity if you include the 5 thousand rule, which is good in terms of the IVA but I was actually a bit dissapointed as thats what we paid for it 6 years ago. I have someone else coming on monday to do a valuation too so hopefully they will do a proper one. do you think he should just send what the estate agent left me or try to call, as they have been a nightmare to contact lately I'm thinking it may be sorted quicker if he just sends it.

FoggyBrain_2

Ah. GT will want a fur lined version --- but might settle for what you have. I would send it recorded delivery, but keep copies. They are all at sixes and sevens after taking on another company's clients. I fear it will be some time before they sort themselves out.