IVA and Releasing Equity in last 6 mths

Chels1905

Hi Everyone,

I hope someone can answer this question please...

I am in my last six months of my IVA and have been asked to get a valuation on my property with a view to releasing any equity there may be.

My IVA agreement states:


'If that valuation shows that 85% of my interest inthe property (after deducting my share of the mortgage referred to above) isless than £5,000 (net of all costs to take out a new mortgage) then I need contribute no more to thearrangement in respect of the property.

If that valuation shows that 85% of my interest in thevalue of the property (after deducting my share of the mortgage loansreferred to above) is £5,000 or more (net of all costs to take out a newmortgage loan), then I will seek to re-mortgage my interest in theproperty and introduce this money into the arrangement.'

My property has been valued at £144,000 and my mortgage is £138,900. Does the above mean that if I take out a mortgage for 85% of the £144,000 which is £122,400 and therefore less than £5000 so no requirement to re-mortgage or make any further payments past my last one in December this year? Or have I got this completely wrong.

Thanks for any replies.

milliemonster

Hi and welcome, what this means is that 85% of your valuation is £122.400, if your mortgage is more than £5000 less than this (so would be £117,400) then you would have further payments to make or aim to secure remortgage/secured loan to release the equity.

As your mortgage is clearly much more than this, you don't own enough equity to release so your IVA should finish on time. Unless there is a clause in your IVA which states you will release X amount by way of remortgage at the end???, some older proposals did state this, if so, you need to get your IP to hold a variation meeting to have that term removed to allow your IVA to complete at month 60.

Chels1905

Thanks, that is what I thought. I will check my agreement but I don't recall any other clause as you describe.

So hopefully I will be all paid up on 27 Dec 13. Happy New Year:rotfl::rotfl::beer::beer::T:T

cheesedoffwithdebt

HI Chels- I am not sure your IVA will be over, sorry. In my agreement, if I cannot raise additional money through a mortgage (which like you depends on the loan to value being less than 85%) then you may have to continue the IVA for a further 12 months. I am assuming I will have to do that, because house prices are not moving, but I think that's quite a standard clause- I would ask your IP about it or check the original agreement. If you are able to end early please post!

Anondebtadvisor

I agree with MM and the calculations, you should not have to extend your IVA by a further 12 months, however some IPs still try and get you to extend so speak with your IP as they may require upto date valuations from you.

FiatFan_2

Agreed with MM, it is solely at the discretion of your IP and they (based on my agreement) can give you as little as 7 days notice of intention to extend your agreement should such realisations fall short. I would suspect a shortfall of equity release would be just cause to extend for 3-6-12months. again at the discretion of your IP.

Just curious, has your agreement got a time-scale for completion certificate in it following completion of payments?

Please let us know how you get on

Anondebtadvisor

I know some people coming to the end of their IVAs have a fight on their hands when Ips have asked them to extend even though they are about 85% LTV and dont have £5000 equity!

If you have the valuations etc and know you shouldnt have to extend your IVA dont just accept it and make your objections known.

IPs cant have the equity clause in the IVA and then do whatever they please!