equity release in final year questions

[anais743]

A couple of questions about final valuations at the end of ivas?

1)Is this compulsary and written into all IVA's .

2)Is the valuation done by a estate agent like at the start of the iva or by a valuer nominated by the IP/creditors.

3) What is the formula for the equity release? eg loan to value percentage threshold and how much goes into the IVA?

4)If you meet the above criteria how do you release the equity? how can your take a further advance with your mortgage provider if you have an IVA on your credit file?

[MelanieGiles]

Hi there

1) Yes, this is now a requirement under the IVA protocol and you are unlikely to get creditors to accept an arrangement without such provision.

2) You will obtain a local estate agent's valuation which will be confirmed by that conducted by the lender in the event that you are required to raise equity.

3) The percentage is based upon lending of 85% loan to value of your property. This money is firstly used to discharge your current secured borrowings and any surplus is then paid into the IVA for the benefit of your creditors - subject to the new mortgage not costing more than 50% of your current IVA contribution. You will then cease making contributions to the IVA and it can be closed. There is also a £5,000 deminimis limit, below which you will not be required to pay over anything.

4) You find a lender who will be prepared to lend to you. There are many lenders who currently lend to people in IVAs so that is not usually a problem.

[anais743]

thanks melanie.

1) What happens if you cant find a lender willing to lend?

[Adam Davies]

Hi
Then your IVA will conclude at the end of year 5 without the equity release
Regards