Me and my wife are in the 5th year of an IVA with Grant Thornton and we have been asked to attempt to release equity as per the equity release clause.
The details of the house are:
A
Valuation 235,000
Mortgage 209,000
My understanding was that under the 85% LTV clause, then I shouldn't have to release any equity at all as
235,000 x 85% = £199,000 approx which is less than the mortgage amount so I assumed that there was no equity to release.
Grant Thornton have told me that it is based on 85% of the equity in the property so:
Valuation of the Property £235,000.00
Less Mortgage Redemption £209,129.99
Less Selling Costs (3.5%) £8,225.00
Equity Available in the Property £17,645.01
85% of the Equitable Interest £14,998.26
Therefore, they have asked us to try to release £14,998.26.
I didn't think that this was right.
I am assuming that they are right bit can some of the experts confirm that what GT are saying is correct?
It all depends on the exact wording of your proposal, but in principle, they are wrong !
The current Standard Conditions, which I believe do not differ in this respect from earlier editions, show an example of the calculation being the manner in which you first calculated equity.
Have a look at your paperwork and see which conditions GT are using.
Other Firms have tried this, been challenged and backed down. There is a current battle between GT and another forum member on this matter, where GT are not backing down, but have produced a flimsy arguement. Hopefully somebody with a better memory than mine can post a link to the thread.
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
It may depend on what modifications were proposed. I have seen 85% of the debtor's interest in the property is to be introduced and if that was proposed then GT are correct. I agree with Foggy that you need to read the proposal and then check it against the Chairman's Report.
Hi Brendan.ll
As Foggy has said I have been having the very same problem with Gt my previous post explains all. Sorry not sure how to post a link but am sure someone will help me out with it.
They did back down on the 85% LTV but the £5000 equity each is still an ongoing dispute which is now with their head of Quality and Risk Management and we are awaiting a response
Last edited by vlc1507 on Thu Apr 23, 2015 5:41 pm, edited 1 time in total.
