EQUITY..

[noshiela]

Hiya guys, advice needed..

My husband and I are in a joint iva, we have offered a Full & final to finish early. Will b 4 years in Nov 2017; thy have requested a home valuation which shows we have 190000 equity in the property..

What does this mean????

Thank u for your help!

[Foggy]

For the purposes of a F&F that amount of equity will mean you have to add 12 months payments to the term for the offer to be credible. You might have to argue that you will be unable to remortgage -- but the extra 12 months is the usual outcome at the moment.

[noshiela]

We pay 500 per month atm, and have offered £5500 as full and final. The reason for this was bcz there is a possibility of redundancy for my husband

[Foggy]

You have 19 months, plus a probable 12 month extension, so 31 months ... the creditors will be looking at getting a further £15,500 in payments if the IVA runs to the end. I think £5,00 is too light -- but have seen low offers accepted ( as well as generous ones rejected). They might just decide to take a chance and hang on, bearing in mind that they will also be entitled to a share of any redundancy compensation on top of this.

[noshiela]

Dsnt look great then..
The valuation of the house left me a little shocked.. was valued at £160000 which is 20000 more then we got it for..

Do you think it would be worth getting another valuation done?

[Foggy]

If you can get a valuation showing equity below £10k it would knock the 12 months off --- did they give you their calculations ? Some do it different ways !

[noshiela]

He said it was based on other properties that were sold in the same street plus condition of my house.. there was one that sold exactly same as mine for 121000 1.5 yrs ago n then one that sold for 155000 last year may.

Had a look on zoopla which showed that my house was worth £111000

Confused.com!!!!

[Foggy]

What is your outstanding mortgage and any secured loans ?

[noshiela]

We are in a shared ownership property, our share of 45% has 490000 left on it.

No secured loans

[Foggy]

£49,000 ??

So -- just for the time being -- take a valuation of £120,000 ( which you can back up from your searches ): 45% share = £54,000 Less outstanding mortgage = equity of £5,000. This is without taking account of teh 85% LTV usually used but means any valuation you can prove below £120,000 will mean no equity extension, so the creditors would be expecting only the 19 payments at £500 ( £9,500) --- so £5,500 is looking more realistic.

[noshiela]

I worked it out as 140,000 x 45% =63,000 minus 49,000 left on mortgage minus estate agent fees of 4000 = 10,000

[noshiela]

I'm sure thy said if the equity is above 5000 each for my hubby and I we will have to pay,

[Foggy]

I'm sure thy said if the equity is above 5000 each for my hubby and I we will have to pay,

That is usually correct ---- but some IP's don't allow two lots of the £5,000 (so I erred on the side of caution ) --- but there is every chance that you don't have equity, if you can get that valuation down.

They do not usually take of the estate agents fees for the purposes of this calculation. So your calculation will trigger equity release. But we still have to figure in the 85% LTV, so, again using your £140k

Value £140,000
85% LTV = £119,000 x 45% = £53,550
Less £49,000 = £4,550

So, no extension ---- again there is an assumption here that they use the usual method ( as I mentioned -- some do it differently)

[noshiela]

So in other words a valuation of 140,000 and below should poss be the way out

[Foggy]

So in other words a valuation of 140,000 and below should poss be the way out

Looks like it.