how is Release of Home Equity decided

[n.j]

Possible Release of Home Equity - how is it decided whether this happens and how is the amount calculated?

[pbeck]

In the final year of the IVA the property will be revalued and you will obtain statements of amounts owing on the mortgage and any secured charges.

If the total of the mortgage and secured debts exceeds 85% of the value of the property you will be required to obtain a remortgage offer equivalent to 85% of the value of the property, once the remortgage has paid off the old mortgage and any other secured debt anything left over will be paid into the IVA.

The provisos are that: 1. If the property is jointly owned and only you are subject to the IVA then only your share of the equity release will be paid in, 2. If the remortgage yields less than £5,000 it will not be proceeded with, 3. once the remortgage happens, any remaining IVA payments will be reduced by the extent to which your new mortgage payments are higher than before and 4. The limit of increase of mortgage payments will be limited to 60% of the monthly IVA payments.

Philip Beck - www.freeivaadvice.co.uk

Licensed Insolvency Practitioner and IVA specialist

[Adam Davies]

Hi
Philip,is the new protocol suggesting a 50% limit rather than the 60% ?
Regards

Andy Davie
IVA.co.uk Spokesperson and Website Manager

About me:
http://www.iva.co.uk/andy_davie_profile.asp

IVA Helpline: 0800 197 4838
http://www.iva.co.uk/iva_helpline.asp

[pbeck]

Maybe you've just told me something new, I haven't looked at the new protocol, I wonder where you can download it from ?

Philip Beck - www.freeivaadvice.co.uk

Licensed Insolvency Practitioner and IVA specialist

[MelanieGiles]

The new protocol is being rolled out at a meeting on 29 January 2008 which I am attending - I have seen a draft which suggests 50% but I will report more after the meeting.

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

To have me propose an IVA for you, please visit:
http://www.melaniegiles.com/ivaEnquiry.asp

See customer feedback at:
http://www.iva.com/iva_companies/IVA_Advice_Bureau.asp

[northumbrian69]

Which percentage takes priority??
If the monthly repayment on an 85% remortgage was to cost more than 60% of the IVA payment would the percentage required to be raised for a remortgage be reduced??
Experts I hope this makes sense, I know what I mean [:D][:D]

[Adam Davies]

Hi
Yes,the amount you have to release will be governed by the 50/60% clause upto a maximum of 85%ltv
Regards

Andy Davie
IVA.co.uk Spokesperson and Website Manager

About me:
http://www.iva.co.uk/andy_davie_profile.asp

IVA Helpline: 0800 197 4838
http://www.iva.co.uk/iva_helpline.asp

[n.j]

I am sorry, I am new to this. I cannot get a grip with the various percentages. Could some one reply using hypothetical numbers please?

Say IVA payment was £900 entering 4th year (after increasing in stages).

[pbeck]

What this means is that if you're on the 60% clause, then the new mortgage must not have payments higher than the old one by more than 60% of your IVA payments, being £540. So if your old mortgage payments were £1,000, the amount to which you are required to remortgage would be limited by a mortgage which does not require payments of more than £1,540. Also, the new mortgage will be limited to 85% of the value of the property.

Philip Beck - www.freeivaadvice.co.uk

Licensed Insolvency Practitioner and IVA specialist