Remortgage while in IVA

[zaza78]

Hi All,

Well I am halfway through the 4th year of my IVA and my IP has written to me requesting am open market evaluation and 2 offers remortgage to release the equity in my property.

Last evaluation I had done was 8 years ago (200,000 pounds). Not sure where the market is right now but I don't think it would haved moved much from this upwards but I still need to go through the process.

Last property in our postcode to sell was back in Jan 2009 for 215,000.

Current mortgage balance is around 155,000 and I have a second loan with First plus (have requested settlement statement for this) of around 28,000. So a remortgage is highly unlikely I suspect even with another evaluation upping the market value.

I had a couple of questions with regards to process here.

1) What is best practise for conducting the open market evaluation i.e. Approach Estate Agent, Existing mortgage lender etc.

2) I was going to approach my existing lender for a remortgage quote but who else should I get quotes from?

In my IVA agreement I do have the statement regarding failure to release equity could mean an extra 12 months of payments (again I would think they would look to increase payments substantially to cover loss of equity).

The only reason for the equity inclusion was Northern Rock.

Hopefully someone can direct me here as I am in a bit of a blur as to which way to go.

[Shining]

Hi, I would approach an estate agent for a valuation and obtain quotes for your remortgage from any lender as I'm almost certain they won't be able to accomodate you.

They can only increase your payments if you have the disposable income I would have thought or how will you live.

I'm not at that stage just yet in respect of remortgage and will follow this thread with interest to read above posters views.

[MelanieGiles]

I suggest that you get the property valuation done on the basis of a forced sale, obtaing a current mortgage and secured loan redemption statement and send them to your IP. If you have a loan to value of more than 70% loan to value, there is no hope of you re-mortgaging at this moment in time.

[olympic_torch]

Is 70% now the 'norm' used by ip's for equity calculation?

[Foggy]

Generally an extension will be at the same payment rate as the rest of the IVA .. it is not designed to recover the total "lost" equity.

[kallis3]

I know that mine will be a lot less than the equity. Not sure what we are supposed to release LTV wise but our equity has dropped by about £35k since starting the IVA.

[olympic_torch]

I just wondered what the current ltv percentage was, purely to try and calculate if i am in de minimis.

[kallis3]

I think it depends upon your equity initially OT. Do you have any at all?

[olympic_torch]

When you say initially do you mean at the start of the iva?
If you mean at 4 years in, on the face of it, based on what our properties are selling for and my outstanding mortgage i have approx 30k

[kallis3]

I don't think you'll fit the deminus (or howevever you spell it!) criteria that has to be under £5k.

I know we won't fit that.

[olympic_torch]

I must have the wrong end of the stick? I thought the equity was calculated on a maximum ltv percentage?, for some time, a figure of 85% maximum ltv was being quoted on the forum, but in an earlier reply melanie mentioned 70%.
if i wok out my equity on that basis i have approx 5k

[olympic_torch]

"wok out"
Wot a numpty

[kallis3]

I have no idea OT! Hopefully one of the experts can come on and help - I know I have too much equity for that figure ever to kick in unfortunately!

Did you have a chinese for tea last night?

[olympic_torch]

Tee hee.
As the Beatles said, "we can wok it out"

[olympic_torch]

What i mean is, i understood that a mortgage lender would only lend a certain percentage of your house value for a remortgage, and that percentage is less for credit pariahs such as ourselves. The most recent house to sell by us went for 120k, at a loan to value rate of 70% i only have 4k of equity.