Hi, I'm trying to wrap my head around the issue of the equity release

[Peter.gr]

Hi, I'm trying to wrap my head around the issue of the equity release clause in month 54 and how it will affect the IVA my wife and I have. We have agreed to contribute funds of £25k over 72 months with an original debt of around £55k. I think they've also added a 6th year as a clause. We've finished our 3rd year in the IVA and I've realised that our house will have £80k and around 12 years remaining on the mortgage but having value of approx 115-130k.
Does this mean we would be able to finish the IVA early by releasing this equity to settle the 25k or will they ask for more? Should I avoid this and try and get a low valuation, but incur another 12 months of payments?
We're with Grant Thornton (Originally with Wilson Phillips) for the IVA.
We are getting a little tired of the IVA at the moment!

[kazzafunk]

Hi Peter -welcome.

Does it state in your docs how much you are expected to release? Is this in addition to the £25k or part of it?

It would be hard to release equity at present whilst you are in an IVA and most people have a variation agreed to make another 12 months payments.

[Tina Shortland]

Hi Peter - welcome to the forum - sorry to read you are getting tired with your IVA - maybe you need a review with GT if things are proving unmanageable.

With regards to the equity release as Kaza says it depends on how your clasue is worded. If the terms has been extended by 12 months already to make up for the equity then your IVa would be 72 months at your IVA rate and that would deal with the equity. If the 72 months is your IVa terms and any equity is to be on top then you could find you are expected to release equity but if it can't be a further 12 months added on top. If you could release equity via remortgage then it should be built into your proposal that the max your mortgage payment can go up by is 50% of your IVa payment therefore this would cap the amount you would be releasing. It will be far better for you to have a chat with GT to get clarification as it can get confusing over a forum when sorting out the nitty gritty. Hope you get it cleared up soon and the remainder of your IVa goes well.

[Grant Thornton]

Peter - Welcome to the forum, as Tina has advised to sort out the specific details of your case you will need to contact us in order that we can clarify any concerns.
I look forward to hearing from you,
Kind Regards
Karol

[Peter.gr]

I've spoken to to some of the advice staff at GT and muddled through it a little more and it seems there's little I can do at the moment.

If I rephrase the question a little...

If at the time of the equity release clause and its instigation it is found that I would be able to remortgage AND there is plenty of equity available, could that end my IVA? OR will they just take the equity and make us continue paying monthly?

[kallis3]

If you are able to remortgage it is usually for 85% LTV. Obviously your secured borrowings are deducted and your monthly payments cannot be more than 50% of your iva payment. You would pay that money across and then continue to the end of the iva unless you were able to pay the debt in full beforehand.