Equity Release

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a_c
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by a_c » Sun Jun 24, 2007 8:05 am
What are the rules behind equity release, or does it vary from case to case?

For example, I estimate that at the moment there is approx £40K equity in our property. However, if I go for an IVA it will only be for myself, not my wife, and the mortgage is joint so half of the equity belongs to my wife. Would it therefore be considered that I only had £20K equity to release and would I be expected to release all of it?

Also, if I am expected to release equity who would actually be willing to give me a secured loan while I am in an IVA?

Thanks,

Andy

 

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iva_squirrel
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by iva_squirrel » Sun Jun 24, 2007 8:44 am
Good morning Andy,

If you own your home it may be necessary to contribute ‘equity’ held in the home to the IVA. In practice this generally means a remortgage to release the equity. This might be at the start, during, or at the end of an IVA.

Where a significant equity contribution is made to the IVA it is possible that the arrangement might last only 12 months rather than 60 months.

You would only need to release your share of the equity if it is a single IVA. Depending on the size of your debt, you could release your share of the equity now and look into full and final iva.


If you owe money, you can ask your creditors to let you pay a lump sum which is less than the full amount of your debt. This is called a Full and Final Settlement. In return for this payment your creditors agree to write off the rest of what you owe.


Kind regards,



Julia Simavi

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MelanieGiles
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by MelanieGiles » Sun Jun 24, 2007 8:46 pm
Julia is correct, in that it is only your share of the equity which would be available to creditors under insolvency proceedings. Depending upon your other circumstances - creditors may be happy to accept a portion of the equity, but this would depend upon the level of the offer you were making to them.

The most usual equity release provision operated by creditors these days is for you to have the property revalued during the final year of the arrangement, and then to raise equity based upon a remortgage at 85% loan to value of the property. Your share only would then need to be introduced, leaving your partner's intact.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

 

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a_c
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by a_c » Mon Jun 25, 2007 12:09 pm
Thanks for the replies.

I just have one more question on this subject. Who would actually be willing to lend someone money to someone who is currently in an IVA, and would the IVA affect the interest rate?

Andy

 

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MelanieGiles
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by MelanieGiles » Mon Jun 25, 2007 12:21 pm
There are many mortgage companies who will now lend to people in IVA's. Find a specialist broker who deals in the adverse credit marketplace, and they will be able to advise you properly.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

 

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Adrian Ratcliffe
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by Adrian Ratcliffe » Mon Jun 25, 2007 6:53 pm
Hi a_c,

The best adverse broker is Tom Owen from central mortgages he has over 15 years of adverse history in mortgages.
Central Mortgages, Central House, 55 Main Street, Billinge, Wigan, WN5 7HA

Tel : 01274 560006
Fax: 01274 560008
Email: enquiries@centralmortgages.com
http://www.centralmortgages.com/

 

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Welsh Boy
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by Welsh Boy » Mon Jun 25, 2007 7:29 pm
a_c

You asked who would lend to you, there are many companies/lenders who would look at the business you are offering them. They would review your case on it`s individual merits and after searching you (with your permission of course) they would then report the rates and lenders available to you. If you are going to use a broker I would advise you to look at no penalty overhang on whatever deal they are arranging for you, giving you the opportunity to shop around at the end of any preferential rate. The rates aren`t to penal and I think you may be pleasantly surprised. Hope this helps -Tony

 

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Skippy
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by Skippy » Mon Jun 25, 2007 8:04 pm
I would recommend contacting Welshboy (aka Tony Parsons) from this forum a call.

Yesterday is history, tomorrow is a mystery, today is the present - a gift to make the most of.

View my blog at http://skippy13.blogs.iva.co.uk/

 

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dezbroatch
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by dezbroatch » Mon Apr 20, 2009 10:21 am
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Kinborough Channing
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by Kinborough Channing » Thu Apr 23, 2009 10:54 pm
A firm has a total book value of equity of $2,000,000, a market to book ratio of 2, and book value per share of $5.00. What is the total market value of the firm's equity?....

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Max
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by Max » Thu Apr 23, 2009 10:59 pm
Try the Chelsea Building Society - they are known to lend to people in IVAs but they are pretty strict as to ascertaining the reasons an IVA came about - an IP on here awhile back confirmed that they do lend to IVA people.

 

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David Mond
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by David Mond » Fri Apr 24, 2009 4:58 am
<blockquote id="quote"><font size="1" face="Verdana, Arial, Helvetica" id="quote">quote:<hr height="1" noshade id="quote"><i>Originally posted by a_c</i>

What are the rules behind equity release, or does it vary from case to case?

For example, I estimate that at the moment there is approx £40K equity in our property. However, if I go for an IVA it will only be for myself, not my wife, and the mortgage is joint so half of the equity belongs to my wife. Would it therefore be considered that I only had £20K equity to release and would I be expected to release all of it?

Also, if I am expected to release equity who would actually be willing to give me a secured loan while I am in an IVA?

Thanks,

Andy


<hr height="1" noshade id="quote"></font id="quote"></blockquote id="quote">

In a protocol compliant IVA you would have to release 85% of your net quitable share in the property (as revalued) in month 54.

So from your example your share is £20,000 so it would be expected for you to re-mortgage to pay in £17,000 in and around month 54. This is subject to you being able to re-mortgage and currently banks are lending only say 70% LTV and in any event your re-mortgage payment cannot exceed 50% of the IVA contribution.

If you cannot meet that criteria you would continue with your IVA payments for another 12 months.

 

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ram
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by ram » Wed Nov 11, 2009 2:51 am
Hello
I am in year 4 of my IVA.I bought my flat for £123000. It has just been valued for £115 000. I have £ 89000 left on my mortgage to pay back. How much equity can I release from my property. I am supposed to release £12000. Is that feasable? What do I do now?
Thanks for your contributions
Ram

 

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Debtwitch
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by Debtwitch » Wed Nov 11, 2009 5:51 am
Hi Ram

Based on the protocol you'd be looking at realising upto 85% of the equity and using this formula based on the the figures here, it would be £8750, however your IVA was approved before the protocol and the terms of your IVA are likely to be different.

Just speak to your IP to establish what the terms of your proposal and any modifications were. Ask them to point out where you can read this so that you can read and digest yourself.

 

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ram
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Joined: Wed Nov 11, 2009 2:45 am
by ram » Wed Nov 11, 2009 3:36 pm
Thanks Angela,
Another problem is that my own bank does not want to remortgage to release any equity! Where can I find any firm who will be able to remortage my flat? At this instance, my IP seems to be going towards increasing my IVA period. It does not seem anymore that they are here to help as they seemed at the start of the IVA.
Ram
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