Inadequate Equity to release?

[zaza78]

Hi all,

I haven't posted for a while primarily because life is busy and am coping well with IVA payments.

Have successfully paid 23 payments so far and second year review coming up in next 2 months.

One question i did have was on the subject of equity release from my home in the 4th year of IVA.

As part of the IVA i signed an agreement with my creditors ( NR main cuplprit) to release both my wifes and my share of equity in the house which was approx 33,000 pounds.

If this wasn't possible then my IVA would extend for a further 12 months etc.

The remortgage would be at 85% of LTV and second charge would be paid first etc before any other equity can be paid back to creditors.

As house prices have come down the likely value of my house is around 200k. 2 years ago this value was somewhat higher at the top end of the housing bubble at around 225k. Pretty much same story in a lot of places.

my mortgage is currently about 80% of house value.

If in 18-24 months time the value of the property is not where it is supposed to be what are the possibilities?

even with my current remortgage payments the overall percentage of equity wont shift all that much ( most likely 5% at most )

feedback is appreciated

thanks

[Michael Peoples]

It depends on the actual modifications proposed by creditors. Unless it has been guaranteed that you do not have to sell your house it is a possibility. For example HMRC have never agreed to the Protocol IVAs and while the existing people in HMRC may accept a remortgage at 80% loan to value, those making the decisions next year or the year after may not. You should seek clarification from your IP as to what your definite responsiblities are.

[MelanieGiles]

We recently had HMRC seeking for the property to be sold during the final year, but managed to outvote them.

[Welsh Boy]

zaza78

An awful lot can happen in the next 2 years with regard to the housing and mortgage market and my guess is it will probably be different to where we are now both with valuations and products available.Tony