Correct calculation for equity release

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jimbo834
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by jimbo834 » Thu Aug 30, 2018 6:52 am
My husband and I have interlocking IVA’s with aperture, originally Grant Thornton and are approaching month 54.

Our equity release clause in our proposal clearly states we can remortgage up to 85% LTV. I have interpreted this as our 15% equity is safe. Is this correct?

We spoke to them over the phone to clarify the equity release clause and they are working it out based upon 85% of the interest, minus a secured loan, deduct £5K and a 3.5% remortgage fee. Is this the correct calculation? Also it is only £5k between us rather than £5k each as they have stated it is a joint IVA. Is this right?

Thanks
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Foggy
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by Foggy » Thu Aug 30, 2018 8:22 am
Because the clauses are badly drafted and open to interpretation, Aperture have chosen the method in their best interests, rather than the intended method that most use.

The trigger clause --- i.e --- is there enough equity to trigger equity release ... more than £5k .... is often referred to by example or reference to annex 6 or 7:

House market value x 85% less secured lending = available equity

Most IP's have used the same figure for equity release. But, to be honest, it has always been academic, as a remortgage has been impossible and the 12 month extension has always applied. Aperture now apply their own methodology to the amount to be released, which could be construed to be correct. albeit not what was probably intended. in post 2014 IVA's there is now the option of secured lending which makes the extension less likely to be the most applied solution.

Also -- on the £5k de minimis with interlocking IVA's. The generally accepted view is that, as the equity clause is worded to reflect the share of the debtors interest in the property, each of you should have the trigger amount applied to your share and so, effectively, you should have the £10k de minimis between you. However, again Aperture take a different view (and they are not completely alone) that only £5k applies for the two of you.

Posters have challenged the trigger calculation and, if the example is embedded in their proposal, Aperture have backed down in the past. As mentioned above, the actual amount to be released isn't usually a problem as the extension has, historically, applied ... but things are changing.

Posters have also asked here re the de minimis and have been told that the £10k should apply, as considered here as well as other debt forums. But none have come back with the outcome, but I suspect Aperture haven't capitulated.

Not a very helpful reply, I am afraid. Sorry.
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Lisa Thomas
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by Lisa Thomas » Thu Aug 30, 2018 9:09 am
Good reply from Foggy - I agree you should challenge with Aperture.
Chief77
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by Chief77 » Thu Aug 30, 2018 9:34 am
Lisa Thomas wrote:
Good reply from Foggy - I agree you should challenge with Aperture.


I've had the same with Aperture this morning. They are not backing down from 'their' calculation which is not what was agreed and taken into account when I agreed the IVA with DFD 5 years ago...
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Lisa Thomas
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by Lisa Thomas » Thu Aug 30, 2018 11:30 am
Do you have that in writing from DFD/ is it calculated differently in the original estimated outcome statement that supported your original proposals?

I would take it further and make a formal complaint and if necessary, follow up here:

https://www.gov.uk/complain-about-insol ... actitioner

Depending on the sums involved you may want to consider instructing specialist solicitors to help you.
Chief77
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by Chief77 » Thu Aug 30, 2018 12:00 pm
Lisa Thomas wrote:
Do you have that in writing from DFD/ is it calculated differently in the original estimated outcome statement that supported your original proposals?

I would take it further and make a formal complaint and if necessary, follow up here:

https://www.gov.uk/complain-about-insol ... actitioner

Depending on the sums involved you may want to consider instructing specialist solicitors to help you.



Thanks, it clearly states in my proposal the calculation and Apeture are saying I understand that but we do it differently. I advised they wouldn't have a leg to stand on should they vary from the contract agreed and they basically said that DFD cease to exist due to things like this and when DFD handed over to Apeture everything is now by the Apeture terms. I signed up to an IVA fully understanding the likelihood of having to sell my property after 6 years (very small) against the wording in my contract. It would be outrageous for Apeture to even try and vary on the T&C's so will go legal should I have to. The guy added that should i not do via their calculation the IVA will fail right at the end!

What I raised with them that concerns me more than anything is there are a lot of vulnerable people that are accepting their demands as gospel no doubt. People could be having to sell up/remortgage when they perhaps shouldn't and this could be life changing events ion top of an already challenging period within and IVA. There should be some transparency on the advice they are providing and perhaps needs taking further.
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Foggy
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by Foggy » Thu Aug 30, 2018 12:04 pm
Chief77 wrote:
Lisa Thomas wrote:
Do you have that in writing from DFD/ is it calculated differently in the original estimated outcome statement that supported your original proposals?

I would take it further and make a formal complaint and if necessary, follow up here:

https://www.gov.uk/complain-about-insol ... actitioner

Depending on the sums involved you may want to consider instructing specialist solicitors to help you.



Thanks, it clearly states in my proposal the calculation and Apeture are saying I understand that but we do it differently. I advised they wouldn't have a leg to stand on should they vary from the contract agreed and they basically said that DFD cease to exist due to things like this and when DFD handed over to Apeture everything is now by the Apeture terms. I signed up to an IVA fully understanding the likelihood of having to sell my property after 6 years (very small) against the wording in my contract. It would be outrageous for Apeture to even try and vary on the T&C's so will go legal should I have to. The guy added that should i not do via their calculation the IVA will fail right at the end!

What I raised with them that concerns me more than anything is there are a lot of vulnerable people that are accepting their demands as gospel no doubt. People could be having to sell up/remortgage when they perhaps shouldn't and this could be life changing events ion top of an already challenging period within and IVA. There should be some transparency on the advice they are providing and perhaps needs taking further.



They cannot vary the agreement formulated by DFD without your consent and agreement to any new terms. Your IVA is a contract between you and your creditors and the IP is merely appointed supervisor ... NOT a party to the agreement.
Chief77
Posts: 9
by Chief77 » Thu Aug 30, 2018 12:07 pm
Foggy wrote:
Chief77 wrote:
Lisa Thomas wrote:
Do you have that in writing from DFD/ is it calculated differently in the original estimated outcome statement that supported your original proposals?

I would take it further and make a formal complaint and if necessary, follow up here:

https://www.gov.uk/complain-about-insol ... actitioner

Depending on the sums involved you may want to consider instructing specialist solicitors to help you.



Thanks, it clearly states in my proposal the calculation and Apeture are saying I understand that but we do it differently. I advised they wouldn't have a leg to stand on should they vary from the contract agreed and they basically said that DFD cease to exist due to things like this and when DFD handed over to Apeture everything is now by the Apeture terms. I signed up to an IVA fully understanding the likelihood of having to sell my property after 6 years (very small) against the wording in my contract. It would be outrageous for Apeture to even try and vary on the T&C's so will go legal should I have to. The guy added that should i not do via their calculation the IVA will fail right at the end!

What I raised with them that concerns me more than anything is there are a lot of vulnerable people that are accepting their demands as gospel no doubt. People could be having to sell up/remortgage when they perhaps shouldn't and this could be life changing events ion top of an already challenging period within and IVA. There should be some transparency on the advice they are providing and perhaps needs taking further.



They cannot vary the agreement formulated by DFD without your consent and agreement to any new terms. Your IVA is a contract between you and your creditors and the IP is merely appointed supervisor ... NOT a party to the agreement.


As thought - thanks
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