www.iva.co.uk

Hi all,

I have just had the call from Select re the equity release... Have given details over to them etc.

Just to be straight can anyone confirm the method used by the IPs to get the 85% LTV calc sorted?

I'm going along the lines of:-

(House value x .85) - Mortgage / by two due to joint ownership.

Any confirmation would be great.

That is the way most work it out --- there are a few who take 100% of the value less the mortgage and 85% of that figure. Sometimes they back down, sometimes not. The Protocol clause is ambiguous although legal opinion is that the intention was to do it your way.

Ive ran a few different versions through my spreadsheet and like you say.... each has a benefit to someone!

Hi

Calculation should be 85% value of property less existing mortgage/secured loan. The remaining equity would be calculated at 50% as just your IVA and property jointly owned, if this figure is above 5k you should try to remortgage. If below 5k there should be no need to try and your IVA should conclude at the end of year five

Regards

Agree with Andy and Foggy; my (PJG) IVA explicitly demonstrates this on my documentation which is nice to have.

Cheers for all the answers. It would appear that Select were planning on using both shares of the equity to gain a remortgage.

So, as we are very tight on the 85%, do fees etc get taken into account? As this would put the final nail in the coffin for a remortgage.

Values of our house are upto £18,000 in difference!

Also, Select say a remorrage is not possible and I would have to use a secured loan over 15 yrs!!!- this is not in my terms, it explicitly says remortgage.

Sorry for the barrage of questions, this has a mojor impact on the next 12 months of my life, and just need to go into the final conversation with DFD eyes wide open.

Cheers all.

They cannot force a secured loan on the old conditions, and, in any event, it could not run past the end of your current mortgage and the repayments cannot exceed 50% of your IVA repayment.

Is it me or is DFD getting mentioned a lot recently on the board?

Foggy,
As I suspected! They cant get me a remortgage so its dead in the water - Now just need to get the valuation right so i know if theres an extension coming! To their credit, they did say that they could only use 50% of my current payment value to get a deal with.

I suppose that I need to now get a valuation done and go from there.....

In fairness to Select their job is to report what can and cannot be done and in most cases nothing can be done. This allows the IP to then close or extend and means the debtors do not have to waste time [and possibly damage their credit file even more] getting pointless rejections.

This info plus a current valuation should be enough for DFD.

Hi Simon1883,
Please drop me an email (address is in my profile), with all your contact details and I will get in touch to discuss your issue further.
Look forward to speaking to you soon.
Regards,
Evette Everest

Hi Evette,

details sent over. I look forward to receiving your call....

Simon

Michael,

Select have been very good throughout. No real pressure, just get them the info they want and they go off and do thier thing.

I think the secured loan option that was offered, was a sort of sales pitch. The advisor said they could defo sort something out that would enable me to close down the IVA now, and then look at getting me a competitive re mort in 12 months.

I might just give them a bell post IVA and see where the land lies.

I'm quite interested to see how this pans out

It is an option and many people choose the secured loan route. It does reduce your payments by half and gets you out of the IVA quicker meaning no more loss of bonuses, overtime etc. You can then look at shipping the lot once the credit file clears up so while it is not the correct option for everyone it is certainly worth having the choice should you so wish.

There are of course downsides but if everything is well explained then the client can make up their own minds. A few of ours have obtained secured loans and the offers have always been accepted and the clients have always seemed delighted.

Michael,
Now you expain it that way it does make some sense. I guess that I'm not oblidged to offer the "maximum" available, rather something that is affordable to me and meets the minimum release criteria?

I spoke with Select late last night and we agreed to go our separate ways, based purely on the fact that they wanted me to do 10k over 15 yrs, which IMHO far exceed the LTV of the property.

I might give them a call and see if they can release say, 3k (1 year of payments) and offer this a F&F as opposed to an extension. I guess the plus side to that is I would also be building my credit rep again as this would be from a lender rather than more IVA payments.

With regrds to Andy's comments re the equity split, DFD are insisting that my wifes share should also be used! They are claiming that I should have declared at the start that she was not willing to use her equity at this stage of procedings.
However, nothing in any paperwork that I have implies this. With her equity, I (we) are above the 5k and that way DFD can enforce some form of equity release.

God knows what the best option is!