Can anyone explain how this works. I understand essentially what it is - amount borrowed against value of the property as a percentage. How is it applied to my IVA? and what does it mean 85% of my loan to value share???
I can never remember quite how this works. I know that we have to try and release 28k for our equity clause.
I'm sure someone else will come on and explain.
Sharing from experiences of dealing with debt
The greatness of a man is not in how much wealth he acquires, but in his integrity and his ability to affect those around him positively.
Bob Marley. http://kallis3.blogs.iva.co.uk
Our debt was 80k plus so in reality it's not a great deal and if we could release it then it would mean we'd pay back 69p in the pound.
However, we won't be able to release it due to the current climate and our ages so we'll continue on for a final year.
Sharing from experiences of dealing with debt
The greatness of a man is not in how much wealth he acquires, but in his integrity and his ability to affect those around him positively.
Bob Marley. http://kallis3.blogs.iva.co.uk
Cookies, Essentially if your mortgage is 85% or more of the value of your property i.e house valued at £100,000 and your mortgage is £85,000 then that is considered insufficient equity in order to release any to creditors at the end of your IVA. But please do check your own individual proposal as new Protocol arrangements also include a £5000 figure that is referred to a "de minimus" i.e if less than 5K equity and that is taking into account removal costs then it is considered minimal and therefore = NO EQUITY. And do remember if no equity = no equity!. I see alot on here people worrying about extending another 12 months but again check your proposal as mine says extension is in lieu of equity.
Ok, so you need to work out what 45% of the value of your home is and then 85% of that figure is the maximum value they would ask you to remortgage to, so say 45% of the value of your home was 50k, 85% of this would be 42.5k so if your mortgage is more than 5k less than 42.5k then you would be expected to try to remortgage or extend your IVA for a further 12 months
Thanks lem now I can work out if I will be expected to remortgage.
Just worked figures out and it seems I will have a lot more equity than 5K. How much will I be asked to pay into my IVA assuming I could get remortgage?
Last edited by cookies68 on Fri Nov 04, 2011 2:57 pm, edited 1 time in total.
It is night on impossible in todays current financial climate to remortgage when you are in an IVA, I believe some older IVA' though expected the debtor to remortgage to 85% of the loan to value, so if you worked out that based on the figures I quoted above, your mortgage was 25k and the value of the shared ownership was 50k, the 85% LTV being 42.5k then you would be expected to remortgage the sum of 17.5k (I think!) that's of course if this sum didn't exceed the debt owing at the time of the remortgage, but also significantly, your new mortgage payments can only increase by 50% of your monthly IVA payment, so again, figures are a bit dubious without going into specifics.
If you can't get a remortgage (which as I said is almost impossible during an IVA) then they usually ask for a further 12 months extension of your IVA then it concludes, but again like everything, you need to look at the detail of your IVA proposal carefully as they are all very individual and deal with equity specifically to you
