4th Year of arrangement

[marce3000]

Good morning. I am getting a little confused and wondered if some one could put this in a language I undersatnd please? We have had a letter regarding the 4th year of our arrangement and introducing funds. \we have to obtain a current property valuation.
Question 1: Can we just get a estate agent round and pretend we are thinking of selling and get the valuation in writing?
Redemption statement of current mortgage.
Question 2: We have last years, May 2012, do I have to get this years or wait until May 2013?

Our agreement then starts talking about 85% loan to value as this is where I get lost! Now I am sure properties in our area are roughly £110,000 and as of last year our mortgage was at £89,351.
Our IVA company have advised us to apply for mortgages which we know we wont get however to go through the motions. We cannot approach our mortgage company as they went into administration!
Question: Do we just go to any reputable high street lender, ie the big banks, waste our time and their's to get the rejection letters??

Now this bit, sorry it goes on! Where the debtor is unable to obtain a re mortgage the IVA should be exyended by up to 12 months. The amount by which the additional secured borrowings increase shall not exceed 50% of the monthly arrangement contribution at the time the the mortgage offer is obtained. (confused by this as it states unable to obtain a re mortgage)?
Where it is demonstrated after month 54 that the equitable share is less than £5,000 (gross) the property is to be excluded from the arrangement without extending the exsiting term. The costs of re-mortgaging to release the equity shall be deducted from the mortgage proceeds and the monthly payments deducted from the contribution. If the increased cost in the mortgage means that dividends to creditors fall below £50 per month after fees, monthly payments are stopped and IVA concluded.

So that is the propery valued and equiry release bit, Now we have the duration. Contributions will be for a period of 60 months unless early conclusion is agreed by creditors. The duration of the arrangement may be extended at the supervisors discretion in order to complete any final administration but creditors must receive final dividend payments within a further 3 months of the duration detailed above unless there are payments in lie of equity still to be introduced.

I really am confused. Please can some one explain in very simple terms?

Thanks for reading

[winter_blues]

Right, yes you can try estate agents and make out that you need a fast sale on a 3 month sale basis . Some are getting wise to free valuations and pester you afterwards but you should be ok. I used story that I was separating and needed quick sale.

Equity is a complicated area. You will have one of the newer from 2008 protocol compliant IVA's which makes things easier with regards to equity.

So if you have 89, 351 mortgage on house worth 110,000 that's 81% LTV . Your net worth is calculated after deducting 15% equity. So , your share of your net worth is less than £5 k after the 85% rule. I.e you would have to have equity in excess of 15% of your home value plus £5k . You have equity in excess of 15%. You have roughly £4k after 85% rule . Your mortgage would have to be 93.5k to hit 85% LTV .

It's close so valuation will be critical but there is a good chance you won't have enough equity and therefore no extension should be required.


Hope this helps.

[winter_blues]

The extra months are there in case you had payment holidays or a shortfall in the dividend . Standard clause but if you have not missed any payments or had payments reduced beyond the I.p's discretionary 15% then all should be ok.

[back on track]

you wont have to apply for a remortgage if you have less than £5000 equity in your property.
here how i see it
110,000 @ 85% ltv=£93,500
mortgage left=£89,000(allow a bit)
93,500-89,000=£4,500
so you are under the £5,000 de-minus and you wont have to re-mortgage and your iva will finnish at month 60.
so the lower valuation you can get the better.

[marce3000]

Thanks both for your help, I think I understand now.

[marce3000]

Had estate agent around today and they would put the house on at £120,000! By my calculations (have estimated mortgage owing from last May to be approx £86,551) so it looks like we will have to go down the re mortgage road. Does any one know if we can just apply for a mortgage on line to get the rejection letter? Felt really bad wasting the estate agents time. Thanks in advance

[back on track]

was that valuation for a quick sale?
also if you need to get more than one evaluation.
a quick sale figure is usally around 85% of the standard evaluation.

[marce3000]

The letter I had from IP asked for a current property valuation so I only got one around as I thought our property would be roughly the same as a property by ours that has just sold for £108,000 but was marketed at £110,000. They are going to put the price in a letter to me so when I get the letter I can call and ask re quick sale.

[mole]

Also, is it just you in the IVA? If it is and you are married then the equity available is split between you and your partner. So if after a LTV of 85% you have £4k equity. You share that with your partner is you have just £2k each.

That would move you even further away from that crucial £5k threshold.

[marce3000]

Yes I am married and we are both in the IVA. I am getting so confused! The IVA company told us to apply for a mortgage just to get the rejection letter but I am not sure how much we should be asking a mortgage company for? As the estate agent said £120,000 do we ask for a mortgage for that much even though they would put the house on the market with offers around £120,00 doesn't mean we would get that price. We checked Zoopla which have the house on around £115,000, can I send a copy of this even though Zoopla has all the houses in my street on in the wrong area! They have it on as being in a more desirable area.Funny when the estate agent was here though as I really felt like we were going to move house! Also if we approach our bank for the mortgage rejection surely they are going to get annoyed as we know we will be rejected. Is it better to try some one else and be upfront about the IVA? questions, questions, sorry.

[marce3000]

Also, just wanted to ask, one of my creditor's still has not put a claim in 4 years on. Is there a cut off date on which they can put in their claim? Thanks