Equity / F&F Question

[jessi3498]

Hi all

Currently coming up to Year 3 mark on my IVA. I am married but my partner is not on my IVA however we have a mortgaged property and this was naturally included in my plan ie potential equity to be introduced at the Yr 5 period.
I may be in a position to offer a F&F offer to my IP (Payplan) via my parents who could offer a lump sum (gift of course), questions:

1. Should the F&F offer reflect payments up to Year 5 or for the total period ie Year 6?

2. As this is will be an early settlement, will my IP request a house valuation to inform the creditors discussion when considering the submitted offer? Or are valuations only used for the the extended 12 months period?

Thanks in advance ....
Jess

[Foggy]

It is usual to include the 12 months in a F&F offer when a homeowner, unless you can demonstrate that there will be less that £5k equity and the clauses will not be triggered --- which will require a full blown valuation exercise.

IPs differ, but most will not go into valuations etc. if the 12 months is added.

[jessi3498]

Thanks Foggy ...

When conmencing the plan my equity position was <5k however believe it will be greater - hence the drive to settle early in case (and I accept chances of success are minimal) that the equity release process is successful.

Is it worth, as a starting point, offering the F&F for the Yr 5 period. I suspect my IP will say ‘as much as possible’ etc - just wondered from experience within this forum there had been tactful ways to negotiate the F&F.

[kallis3]

How much money would your parents give you? You would also have to stipulate that the money is only there for a full and final. and not available otherwise.

[jessi3498]

Hi

I’m approx 3 months away from Yr 3 so am basing the offer at the Yr 3 point to allow time for the offer to be submitted, variation meeting to be set etc.

Monthly payment is £690 and folks have muted 19000 - which obviously equates to the 24 months between years 3-5 and approx £2500 in addition as a temptation for creditors to reflect in losing the Yr 6/Equity funds.

I appreciate it’ll be a case of S&S (Submit & See!) - just after some wisdom to ascertain the best approach of the F&F being accepted without taking Year 6 or equity into the equation.

[Lisa Thomas]

You will want to establish the equity position first.

Ensure you ask any chargeholders for a redemption statement as this will include early settlement penalties and interest, reducing the amount of equity available.

[jessi3498]

Thanks Lisa

I have that in hand and know the approx redemption figures including early exit penalties. I would estimate (although no valuation just in recent sale prices in my area) that my remortgage equity sum is approx £20k.

[Foggy]

If you have 12 months at £690 -- they are looking at £16560 ... add in the extra 12 months, more like £24840.
There is room to negotiate as they will be saving 2 ( possibly 3 ) years of accepting and dealing with dividend distributions. I would say that an offer of £19,000 isn't too shabby.

[jessi3498]

Thanks to all for have advised.

I think the main Q was if when submitting the offer, the IP or creditors will request a valuation to be obtained also and wondered if my situation had been evidenced before.

Again - thanks

[Lisa Thomas]

Thanks Lisa

I have that in hand and know the approx redemption figures including early exit penalties. I would estimate (although no valuation just in recent sale prices in my area) that my remortgage equity sum is approx £20k.

It's worth getting an estate agent round for a valuation just in case.

[kallis3]

I had an estate agent round.