Equity Release

[MelanieGiles]

I think you will struggle everywhere to try and raise money out of that property in the current climate. What does it say in your IVA document about not being able to remortgage?

[ram]

Thanks for your valuable inputs.
My IVA document says..''in the event we are unable to realise £12000, we will realise the maximum amount available to us''
this will mean that we will release the maximum equity £8750 in our case and thats it.
There is no clause about not being able to remortgage. There is no clause about extending the IVA period in the contract. So it is wrong for my IP to say they will talk to the creditors to accept an extension of my IVA!!!
Ram

[kallis3]

You will find these days that a lot of IP's will be going to the creditors to ask for an extra 12 months.

[MelanieGiles]

If the maximum amount available to you is £0, then presumably you will have complied with the terms of the IVA?

[kallis3]

I do find equity release so confusing!

[MelanieGiles]

Most IPs do as well Jan! There are still so many conflicting modifications in older cases, that I for one am glad of the clarity provided within the IVA protocol - even if I don't agree with equity raising at all!

[kallis3]

I suppose the creditors have to try and get as much money back as they can, and it is one way of doing it.

[iamsobad]

With regard to equity release
My IVA is personal to me and not my partner if I am close to paying 100% of my debt and due to my age being over 60 by then.
I have the valuation after 4 years in place and its likeley my mortgage debt will be only 70K in £350K property
Can the creditors pursue my share for the interest as I may well extend by 6 months to pay the full 100percent.
Or once the debt is paid in full or F and F agreed is that it.

[kallis3]

You will never pay back more than 100p in the pound plus fees. I would have thought that if an extra few months would cover this, the creditors might view it favourably.

Hopefully Mel will pick up on this, but perhaps wise to speak to your own IP and see what he/she has to say.

[iamsobad]

So the fees come into it as well
I didnt realize that they were part of it
I was due to pay 58% but due to the financial climate improving Iv already paid 9k in 6moths and that will double over 12 months my orig debt was 77k and by my reckoning i will hit £73k after 60 payments.
My big issue with the equity release is my mortgage at the moment it will not finish till I am 67 my 5 years in iva will put me over 62.
So it left me 5 years to build for retirement the fees will take me another 12 months to pay
Is this normal Melanie.

[kallis3]

Yes, fees do come into it as you are paying for your IP to look after things during the IVA.

You may find that you do not have to do an equi9ty release if you are paying back more or less what you borrowed, but this is something you should take up with your own IP.

[MelanieGiles]

How much debt do you feel you will still have at the end of the five year period, and how much are you paying on a monthly basis at the moment. If you could pay the debts and costs in full by extending the arrangement by a further six months, this would seem to be the most appropriate way forward for you.

[ram]

Hi all,
Just received a letter from my IP with variations in my IVA. One of the clause is about extending my IVA by 12 month if I do not manage to remortgage to release equity in month 54.
Just a bit confused. Shall I accept this new proposal or just remain with my old one which says I will provide maximum contribution available to me.
Thanks
Ram

[kallis3]

You need to speak to your IP about the implications with this.

It is becoming more common that creditors are asking for the extra 12 months.

Check your proposal and chairmans report to see what it says in there, and hopefully one of the experts will be along to assist with this.

[Michael Peoples]

It is a tricky one Ram and Jan is right in that you should discuss it with your IP and possibly a financial advisor. The extension sounds fine as you will not be obliged to take on a sub prime mortgage but you will have to do the maths. An extra year's payments versus an increased mortgage at adverse rates for the remainder of the mortgage term.