Negative Equity and the equity clause

[caraf]

Hi
In our iva we have the 4th year equity clause, which states we must have our house valued to release any equity into the iva, up to 85% of its value. We are currently in negative equity and with house prices going down, it is highly unlikely there is going to be anything to release ?? what happens then ?

[debbiw]

Hi Caraf, if at year 4 you have no equity to release, then your IP will call a creditors meeting, and maybe extend your IVA for another year, I think.. One of the experts will say if i am wrong x

[pbeck]

No, the IVA will not be extended, if your existing mortgage is over 85% value of the property, you will not have any equity to release, just continue making the monthly payments for the remainder of the IVA and the house will be excluded.

Extending the term would be an option if you were obliged to release some equity if your existing mortgage were less than 85% of the value of the house, but, for whatever reason, could not obtain a remortgage.



Philip Beck

Licensed Insolvency Practitioner and IVA specialist

[Beechy]

You will nedd to look at the Statement of affairs again to see if there is a figure of equity release. I dont think there will be if you had negative equity at the start of the IVA.

This clause is a catch all just in case there is equity at this point.

Contact your IP for further qualification of this if you are not sure

Dave Beech

[caraf]

who pays for the valuations ?

[Beechy]

It is normal for you to pay the valuation fee

Dave Beech

[caraf]

approx. how much can this be ?

[Beechy]

Check with some local companies, I am sure some one who deals with valuation in the forum will advise

Dave Beech

[Andrew Graveson]

The cost of the valuation is set by the mortgage lender chosen.

In some instances free or refundable (upon completion) valuations can be found. Mortgage brokers can help with this.

Sometimes family and friends could help pay for the valuation and a sympathetic IP might allow their reimbursement from the proceeds of the remortgage.

Andrew Graveson
Mortgage Broker & Bright Oak Debt Management
andrew@brightoak.co.uk
www.brightoak.co.uk

[mikebdomain]

If you are in negative equity and there is not much chance of your being able to remortgage check with your IP to see if they will accept a desktop valuation (priced around £25).

As a packager we instruct valuations direct, and do not depend on lenders to decide who we will or will not value a property with. Check with your broker to see if they provide this service.

The price of a valuation will depend on the value of your property.

FREE ADVICE IS THE BEST ADVICE

LEYBRIDGE LIMITED
Whole of Market Mortgage Broker & Mortgage packager
Specialising in adverse credit.

Directly Authorised Firm FSA No:313790

CeMAP 1,2 & 3 qualified
F.P.C 1,2 & 3 qualified
Financial Planning Certificate
Certificate in Regulated Customer Care
Certificate in Regulated General Insurance
Associate of the Charted Insurance Institute

see feedback and testimonials at:
http://www.leybridge.com/testimonial.php
Check out my blog at:
http://mikebdomain.blogs.iva.co.uk/
Please read our Initial Disclosure Document(IDD):
http://www.leybridge.com/Leybridge-IDD.pdf

[Andrew Graveson]

Hi Mike,

Hope you had a good break?

Why would a client be better served by a valuer instructed/paid by a packager such as yourselves rather than the lender?

I presume there must be a benefit to make the additional organisational work of scheduling and invoicing worthwhile for you?

Andrew Graveson
Mortgage Broker & Bright Oak Debt Management
andrew@brightoak.co.uk
www.brightoak.co.uk

[MelanieGiles]

I would not accept a desk-top valuation from anyone as I find them unreliable. I tested this on my own property recently, and it was 33% out! The answer is to ask a local estate agent to carry out a free valuation. We request this on all of our property owning IVA cases with little difficulty, and Countrywide Surveyors will do one for £60 if this is not possible. Easily affordable, and if this indicates that sufficient equity may be available for the IVA, then the IP should authorise the payment of the mortgage company's valuation as an expense of the arrangement.

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

[mikebdomain]

Andrew - because of the cost savings and if the applicant is not taking out a mortgage or is not able to remortgage they may still need a valuation and some packagers are able to offer this service, the benefit is the addition to the bulk purchasing discounts.

I agree Melanie desktop vals are not as accurate as a proper valuer coming out to see your property, but they are cheaper and in my experience a lot more accurate than an estate agents valuation. The desktop valuation system we use is AVM via Hometrack and are issued with a confidence level, we find they are usually within 10%.

Countrywide (or similar a similar surveyor) is a much better option if they are now taking instructions direct from consumers.

FREE ADVICE IS THE BEST ADVICE

LEYBRIDGE LIMITED
Whole of Market Mortgage Broker & Mortgage packager
Specialising in adverse credit.

Directly Authorised Firm FSA No:313790

CeMAP 1,2 & 3 qualified
F.P.C 1,2 & 3 qualified
Financial Planning Certificate
Certificate in Regulated Customer Care
Certificate in Regulated General Insurance
Associate of the Charted Insurance Institute

see feedback and testimonials at:
http://www.leybridge.com/testimonial.php
Check out my blog at:
http://mikebdomain.blogs.iva.co.uk/
Please read our Initial Disclosure Document(IDD):
http://www.leybridge.com/Leybridge-IDD.pdf