Clarification Please.Long post sorry.

[olympic_torch]

just a cotton pickin minute!.
can you please break that down for a comprehensive school lad that failed CSE maths.
If my house was worth £200,000, and i had £100,000
worth of equity, how much could i realise, and how much would then go to my IVA.
Ta.
x
(I know its late)



Aucto Splendore Resurgo.
(3 down, 57 to go)

[MelanieGiles]

So - let's say that in the final year of the arrangement your property is valued at £200,000 and you had a mortgage of £100,000. You would then be required to seek a remortgage for the maximum amount you could borrow. As you would still be in an IVA with an impaired credit rating, the maximum you can currently borrow is 85% loan to value, so you could borrow up to £170,000, pay off your existing mortgage of £100,000 and leave the remaining £70,000 for the IVA - assuming you needed that much to pay off your debts. I can't remember how much you owe.

These numbers may not be representative of your current position, but the principle is the same. And from my perspective, if I felt that a client could not afford to make the increased mortgage payments into the future, I would always seek a suitable variation, but that will be down to your own IP to decide on at the time.

Hope this helps.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[olympic_torch]

Thank you for that.
When you say "pay off the debt", my original debt was (is) 61k, would the monthly payments i had made over the preceeding however many years be deducted from the original debt.

Aucto Splendore Resurgo.
(3 down, 57 to go)

[MelanieGiles]

Yes - you can only pay as much as you originally owed, plus the IP's fees and costs of course.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[olympic_torch]

Thanks again.
I worked our the 85% thingy today, based on the figures used by GT in my proposal, which was, house value of 140k redemption figure of 96k.
Which comes out at a return of 20k-ish, which is perhaps where my original figures came from.
Do you think i'm getting the hang of this?.
Perhaps i'm not as green as i am cabbage looking after all.
When the year 4 remortgage comes around i will have 11 years left on my mortgage. Can the creditors force me to extend my remaining term?.



Aucto Splendore Resurgo.
(3 down, 57 to go)

[MelanieGiles]

You are definately gettin the hang of the calculation OT - I make it £23k so far and this will only move if your mortgage reduces - are you interest only or repayment, and/or property prices increase.

Creditors cannot force you to do anything with your mortgage you don't want to, they just want their money. If you can only get the money by extending the mortgage period, that is a decision you will have to make at the time, but failure to raise the money will result in failure of the IVA, unless you can persuade creditors otherwise.

Now stop worrying, pur your faith in your IP (you have a very good one working for you I know him personally!), and enjoy the benefits of not having creditors hassling you. All of this is best revisited in a couple of years time.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[olympic_torch]

What you really mean is:
"Shut up banging on about it OT and stop stalking me"

<stomps off in a sulk smiley>

x

Aucto Splendore Resurgo.
(4 down, 56 to go)

[MelanieGiles]

Now, now - you know me better than that! I have been waiting for a rubgy comment from you all week. Was Mrs Torch crying into her tea on Saturday?

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[olympic_torch]

sssshh she's behind me watching big brother.
i have been told never to mention it again or i may wake up missing part of my anatomy.

Aucto Splendore Resurgo.
(4 down, 56 to go)

[olympic_torch]

Melanie.
I have a repayment mortgage.
When you say, "failure to raise the money etc"
Do you you mean failure to raise the balance of my original debt or failure to raise any equity at all.



Aucto Splendore Resurgo.
(4 down, 56 to go)

[MelanieGiles]

Failure to raise the equity money - the £23k we have calculated for now based on the current property value and mortgage redemption.

As you are paying a repayment mortgage, you have the double whammy of rising property values and a reducing mortgage. So each time you make a mortgage payment, you effectively increase your equity, but the element of capital repayment within that repayment sum. Switching to an interest only mortgage option prior to entering into the IVA was probably worthy of consideraton, as this would have limited the amount of equity you eventually have to raise, and have left more disposable income to offer to creditors on an ongoing basis. I know this could be swings and roundabouts, but at the end of the day you may not have had to borrow so much over the remaining term of the mortgage.

Hope I have explained this OK - my teachers at school always used to tell me that if you read someting 13 times you would eventually remember it! And please don't hesitate to post more - others are benefitting from this at the same time, and it is a very important topic which I do not think is properly explained to clients a lot of the time.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[olympic_torch]

"double whammy" eh !.
oh goody.
Still, as i said, it is what it is.
On the plus side, we are in credit at the bank, we are spending "real" money, and I have even started to put loose change back into my piggy bank, which i haven't done since i wore a kipper tie, a crombie and flares.

Aucto Splendore Resurgo.
(4 down, 56 to go)

[aguise]

[:D] I have got a tin too and put my spare change in. Hubby superglued it and we will use it for special days out.

Ang

Please visit my blog at http://aguise.blogs.iva.co.uk/

[Ricardo]

Wow just found this and it answers some off my concerns regarding equity release...melanie giles has quoted more than once that the maximum LTV is 85% which leaves me with no equity....happy dayz. I have the exact same clause in my agreement.

[MelanieGiles]

Glad that we have been of assistance to you Ricardo - even though the original thread is nearly five years old!

Nothing much changes does it - OT and I are still bantering about rugby!!!