85% LTV rule

[AlfieMoon]

Would somebody explain the 85% ltv situation - I know it has been put on here before but I cannot find it and I have been trawling through all the debt questions. We have an outstanding mortgage of £133,000 and the value of the property is approx £190,000 - where would be stand when it comes to month 60 - will we be able to pay for 12 months more or will we need to try and re-mortgage. I have tried to work out the 85% ltv rule but am confused. Many thanks.

[Adam Davies]

Hi

85% of your house value is £161500 so if you take away your mortgage balance of £133000 you have equity available of £28500

However you will not be able to remortgage so expect a 12 month extension

Regards

[winter_blues]

Hi, your LTV is 70 %. That is 133/190k and well within 85% rule. So expect an extension n term of 12 months.

[scooby1963]

I now understand that better too (in relation to my previous post regarding my equity release)

regards, Scooby

[AlfieMoon]

Thanks Andy that is the clearest i've seen it explained thank you so much.

[luluj]

Always ask if unsure .... Always someone about to explain !

[AlfieMoon]

Ta Luluj - I have tried to work it out but wasn't sure and sometimes feel embarrassed as I know I should know having read through my paperwork 100's of times. Thank you all.

[soreloser]

Coming to the end of this now....

I have a joint mortgage with my wife (who is not in an IVA) of £135,000 against value of around £200,000.

We also have a joint secured loan on the house which has a redemption value of £62,000.

Am I right in thinking that the the equity of £65,000 is split between us and my share is £32.5K which is all rendered unrealisable due to the loan in any case so the 12 month rule will not apply?

[Foggy]

Hi --- If the value is circa £200k and outstanding loans (secured) and mortgage total iro £197k, you have equity of £3k.

At 85% LTV you are in negative equity, so, if the terms of your IVA stipulate then there will be no remortgage needed.

Again, according to how your clause is worded, an extension is unlikely too.

[soreloser]

Thanks Foggy - £3Kish then. A dizzying amount to show for 30 years of homeownership and 18 years left on the mortgage so I'll be working til 71. Perhaps we'll end up in a caravan. How did it all go so wrong....

[MelanieGiles]

Can I just recommend that anyone seeking advice about their own equity calculation, does so in conjunction with their own IVA and does not rely on general comments made on the forum. There are still a number of odd equity release provisions floating around, and it would be dangerous for anyone to rely on assumptions - no matter how well meant they are.