Home valulation for equity release

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Ryan
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by Ryan » Wed Oct 04, 2017 2:32 pm
Hi Steedie,

I think Foggy mentioned something along those lines previously (19th September above)
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Steeddie
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by Steeddie » Thu Oct 05, 2017 11:49 am
Thanks for your reply Ryan I must of missed that.

I have been looking at both of our iva proposals and the both say exactly the same. So I’m geuessing we both get 5000 equity. As follows.

Sorry for it being long winded.
Thanks
Ste



4.5 For the purposes of my proposal I have included an amount representing 85% of my
current interest in the property,

4.6 Six months prior to the expiry of my IVA (hereinafter referred to as the review date) i

will attempt to release the net worth in my home by way of a re-mortgage.

4.7 At the review date I will obtain an open market valuation of the property from an
independent professional valuer. if that valuation shows that 85% of my interest in
the property (after deducting my share of the mortgage and/or secured loans
referred to above) is less than £5,000 (net of all costs to take out a new mortgage)
then i need contribute no more to the arrangement in respect of the property.

4.8 if that valuation shows that 85% of my interest in the property (after deducting my
share of the mortgage and/or secured loans referred to above) is £5,000 or more
(net of all costs to take out a new mortgage loan) then i will seek to remortgage my
interest in the property and introduce this money into the arrangement. However the
amount that l have to borrow and pay into the arrangement is subject to the following
limits:

o The re-mortgage will be to a maximum of 85% loan to value,

c The incremental cost of the re-mortgage will not exceed 50% of my monthly
contribution,

- the net worth released will not exceed 100% of the remaining outstanding debt,

. the remortgage term does not extend beyond the later of the debtor’s state
retirement age or the existing mortgage term, and

o the amount of money introduced into the arrangement will be the mortgage
proceeds less the costs of the re—mortgage, including any costs to redeem and
existing mortgage and/or secured loan,

- the incremental monthly mortgage payment will be deducted from my monthly
lVA contribution.

4,9 I will provide a broker or prospective lender with my written consent authorising them
to keep my Supervisor fully informed of progress throughout the remortgage
process,

4.10 If I am unable to obtain a re-mortgage for any reason, this will not be viewed as a
failure to comply with the terms of the NA and my Supervisor will have the discretion
to consider accepting one of the following alternative proposals:

- a third party sum equivalent to 85% of the value of my interest in the property
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Foggy
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by Foggy » Thu Oct 05, 2017 11:56 am
My (uneducated) opinion is that you should get £5000 each, which some IP's adhere to -- however, a few do try to subvert this clause to their own ends and say the £5,000 applies across both arrangements.

There are numerous referrals to "My" share of interest in the property ... not "Our". I wonder why .. if you could not remortgage you would both get a 12 month extension rather than 6 months each .... what's good for the goose is also good for the gander !!
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Steeddie
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by Steeddie » Thu Oct 05, 2017 12:17 pm
Foggy wrote:
My (uneducated) opinion is that you should get £5000 each, which some IP's adhere to -- however, a few do try to subvert this clause to their own ends and say the £5,000 applies across both arrangements.

There are numerous referrals to "My" share of interest in the property ... not "Our". I wonder why .. if you could not remortgage you would both get a 12 month extension rather than 6 months each .... what's good for the goose is also good for the gander !!


Think I’m just asking because my valulation of 65000 wouldn’t see an extension because outstanding mortgage is 47000 if the total is 10000?
But if only 5000 it would ??

Thanks
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Michael Peoples
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by Michael Peoples » Thu Oct 05, 2017 1:30 pm
There are certainly some inconsistencies within protocol and your IP will have to make a decision on this. For example, within protocol [so check your proposal] it states that the debtor will always retain 15% of the equity. Therefore in interlocking proposals where it says I will always retain 15% of the equity then this can be interpreted to mean that a couple retains 30%. If this is the case how can you remortgage to 85% while retaining 30%? If this argument is correct and the proposal does not state 'we' then any remortgage would have to capped at 70% loan to value but it is often interpreted differently.
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