www.iva.co.uk

hi, i am just entering the final year of my iva and have read through the terms and conditions and something is worrying me. its about my mortgage, it says something about getting my house valued and any equity they could take off me but this was not mentioned to me when i first applied. the actual wording is very complicated so i wonder if anyone can explain what happens at the end in plain simple english. thank you clive.

Hi I had my house valued after 54 months I'm in a six year iva.they got a value of the Internet sites sent me the valuation.then I sent my last mortgage statement.I owed 85 grand on my mortgage the valuation was 100 grand so I didn't have any equity in my house as it is 85% of the valuation

Basically in month 54 you have to see if there is any equity in your home. If there is less than £5000 your iva should end on the 60th month. If there is over £5000 equity then you will be asked to try and remortgage but due to your circumstances you probably won't be able to, therefore your iva will continue for another 12 months to make up any shortfall. It will then end. This is the position we are in now, it should definitely have been mentioned when you were taking out your iva. We are with freeman jones and they went through a company they used to see if we could remortgage but as suspected we couldn't. Therefore we had a 12 extension. Hope this helps!

There is different wording in proposals and modifications. Some mention 85% loan to value and others mention 85% 'of your interest' which are two entirely different things. It really does depend but your own IP should be able to tell you based on your individual proposal.

Good summary by Shaz and advice from Michael - you need to check the wording of your T&Cs. Also if you don't have any equity it won't affect you.

What is the difference between the two; (a) 85% LTV (b) 85% 'of your interest'

Your interest is based on the entire value of the property whereas 85% loan to value [LTV] leaves you with at least 15%. For example, if you own a property worth £100k and your mortgage is £85k then you are mortgaged to 85% LTV. This would mean that there is no need for an extension and your property would be excluded if the condition refers to LTV.

However your 'interest' in the property is £15k so you could have to find 85% of this if the proposal or modifications state so.

Ok thanks for clarifying this. My proposal mentions both when it comes to the equity part; the first paragraph mentions 85% LTV then the third paragraph mentions 85% of your interest. But as part of my month 54 equity etc they are trying to use the third paragraph whereas I believe they should be using 85% LTV, this is why I asked for clarification. Does this sound right they refer to both as I am so confused with it all.I know I have discussed the equity in another thread, but just want to know the difference between the two.

This should have been discussed with you at the time of the meeting and each modification explained in detail. Each modification or condition must be adhered to so if your property is exempt due to loan to value your IP must then look at anything else. If it states 85% of 'your interest' elsewhere then this must also be looked at and that normally means an extension.

For example, if one creditor asked for 50% of overtime and another asked for 75% then the IP may list both modification but operate on the 75% figure. The IP can sometimes use their discretion in these instances or try and resolve it at the time of the meeting of creditors.

Hi Clive.01 sorry for gate crashing your thread but I am at the same stage as you and I agree the wording of proposals are difficult to understand and can give different meanings to how the IVA company read it to how we interpretate it which is the problem I am having now. Hope you get yours sorted, it will be interesting how you get on.

Thanks Michael for explaining this, I remember being asked to be available on the day of the meeting but no conversation took place with us but never mind. Its never been explained to us until now when we are at the month 54 stage although yes its in the proposal but to the lay person like me and hundreds of others it is not explained very well, but thanks for explaining it now.

It is a shame that you look to be caught by this and likely means another year of the IVA. You probably had the months counted down and this will be disappointing. You could ask the IP to call a meeting and ask creditors to close the IVA especially if the equity is less than 15%.

I know Michael to be honest I received the letter last week stating we had over £5000 equity and I honestly thought they made a mistake thats why I queried it. Disappointing is an understatement as I was hoping everyting would conclude next Jun/July as desperately need another car and was hanging on till then. How would I word that to my IP as would want to make sure it is worded correct, many thanks for your advice very much appreciated.

Ask the IP to call a meeting of creditors requesting the IVA be closed down as under the current protocol guidelines your property would not qualify for an extension. Creditors can only say no and you get the extension anyway but they may accept.

What is the value and the current mortgage?

As of month 54 Dec 2015; outstanding mortgage £132500
outstanding secured Loan of 29700
House valuation x 1 = £175000 the 2nd valuation asking price of £175000 with view of receiving offers in region of £1700000.
If we joined IVA in 2011 would we be under 2008 or 2010 protocal ?