Equity Release

[Alex-55]

I’ve just had my 4th year review and have received a letter saying an initial review indicates that you should be able to release equity.

My details have been passed to The Select partnership who will process this further.

Is it normal for an outside firm to do this work and what exactly will they be doing?

Will I ultimately have to apply for the re-‘ mortgage have or will they? My IVA is with McCambridge Duffy.

[Foggy]

Select often carry out this exercise on behalf of mortgage providers and are well respected for being fair and for following the agreed IVA terms. They will seek a valuation for your property and also a redemption figure to calulate the available equity. Then they will seek a lender who will be willing to provide funds within the IVA terms. If they are unable to do so they will advise McCD accordingly and a 12 month extension to the IVA will apply. If they do find a lender you will apply to that lender through Select. They are very easy to talk to and will answer your queries as they arise.

[Alex-55]

Thank you, that has put my mind at ease. We have £83,000 left on our mortgage and our house is valued at around £150,000 so I believe we could release equity. As things stand are we likely to be accepted for a remortgage?

I must admit I’d rather pay an extra 12 months on the IVA. Thanks

[Foggy]

The remortgage market varies day to day --- a year ago it was looking more likely to get a loan, but with covid and the recession looming (add to that Brexit) lenders are being more cautious, so it is anybodies guess ! Of course the amount you can release will be limited by repayment limit (half the IVA payment) as well as term (cannot go beyond current mortgage or state retirement age -- whichever is later). Although, yes, I can understand that the 12 months would be more inviting for the early finish. Select will discuss all of the 'ins and outs'.

Currently Protocol IVAs have agreed amendments due to covid, which negate the need for equity release and jump to the extension if required https://www.gov.uk/government/publicati ... a-protocol . However, McCD use R3 conditions, so are not part of this agreement --- might be worth asking though.