Our house has been valued at £215,000 & we have a mortgage of £173,163 - the IVA is only in my name but the mortgage is joint.
Will my share of the equity be less than £5000? [?]
(I have the 85% LTV, £5000+ equity =remortgage or extra 12 months payments / IVA ends if less than £5000 equity clause)
Thank you!
Last edited by dancer on Mon Jun 30, 2014 6:33 pm, edited 1 time in total.
I calculate you have 80% LTV. Even with £5k allowance you fall within 85%. An extension or remortgage/secured loan is likely. I don't think the mortgage being joint makes any difference to equity issue.
winter_blues ,I am not sure you are correct. Any equity will be split between interested parties (i.e. him and his wife). And only if his share of equity is over £5k should he need to extend.
So on the above figures I this the agreement should end with no call on the property.
Thank you - am I right in thinking that 85% LTV on the above figures is £182,750 & the 'equity' is the difference between this & our outstanding mortgage?
That is how I have always calculated it, dancer --- but, lately it seems IP's are coming up with more inventive interpretations to force an extension.
The wording of this and many clauses in an IVA are very "woolley" and open to interpretation. My feelings are that this was originally intended this way to allow IP's a little wriggle room to accommodate various individual's differing circumstances. However, the impression I get, all round, is that IP's are getting much less sympathetic and more bent upon increasing dividends. My cynical head links this with the trend by creditors to base fees on a percentage of monies collected.
I might add that it appears to be the larger, more impersonal, companies that do this.
Last edited by Foggy on Mon Jun 30, 2014 8:27 pm, edited 1 time in total.
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
Unfortunately I am with a larger & impersonal company! Having received a/standard letter from yet another 'caseworker' I am concerned that they will have their own interpretation of the equity clause!
If the IVA is proposed in accordance with the IVA Protocol, then the equity you have falls within the deminimis limit - however you will need to check the terms of your proposal documents and seek clarification from your IP in this regard. Hopefully this will not result in an extension of time.
This is a valid question.
Both my wife and I are in separate IVA's. When setting these IVA's up, we were both liable for the full amount of any joint accounts and indeed I believe the creditors get a payment from both IVA's.
Now the interesting part. Assuming we have a joint mortgage for 240,000 and the house is valued at 300,000. In the same line of thinking, we are both liable for the outstanding amount of the mortgage i.e 240,000 each. Therefore, would we need to release equity ?
Sorry forgot to ask, do IP's also consider the penalty amount that would need to be paid should I leave my current mortgage provider in order to release equity - not that anyone else would offer me a mortgage whilst in an IVA.
Yes - IPs do take into account redemption penalties in calculating equity sums, and I imagine that you will both need to look at equity release but do check the terms of each IVA to be sure.
