Mortgage Warning! The Evaporating Equity Trap.

Baz_2

Where do people get these accurate house values from?

To say your LTV is 77% is very precise?

Surely its on the wim of the random guy the mortgage company send to drive past your house?

My mortgage is £120239 on the day I come off my 5 year fix. Over the last 3 months the same house as ours has been on the market for £235k, £215k and £210k. None have sold. The houses slightly larger than ours are on for £235, £240 and £245 etc. Its a very generic estate with around 8 different house types. However one house 2 steps up for ours sold in August for £190k but they had to move quick.

I really don't trust the mortgage company to come in at 60% LTV at all and Ill kick off big style if they charge me £200 for the privilege so Im a bit put off even going for 60%LTV deals although I do like the look of the HSBC tracker and the new abbey 4.49% fix.

So do they tell you the value or do they just say no? Are they fair or not? I have a little leeway to alter the LTV by maybe 1 or 2% max but I would rather not have to. My multiple and credit rating are fine etc.

cleve_2

@silvercar - Thanks for the reply, yeah I did speak to an advisor and he actually said he didn't think he could get any better deals than what is currently on offer from A+L, mainly due to the fact I haven't had a years accounts.
£1500 is quite a lot of saving! Perhaps I should start with some flowers for my mum :-)

@Baz - They said they get their data from the Halifax Index, I'm not sure if you can get them to do a bespoke valuation or not.

Baz_2

cleve wrote: »

@Baz - They said they get their data from the Halifax Index, I'm not sure if you can get them to do a bespoke valuation or not.

So which value do they take as the first value? Is it the amount you paid?

If thats the case then it values ours at £210,000 based on our purchase price in 2003.

cleve_2

Baz wrote: »

So which value do they take as the first value? Is it the amount you paid?

If thats the case then it values ours at £210,000 based on our purchase price in 2003.

The first LTV I received around 2 months ago when I originally A+L about re mortgaging. I think someone realised they've not kept there valuations with the market, so suddenly adjusted them.

Baz_2

cleve wrote: »

The first LTV I received around 2 months ago when I originally A+L about re mortgaging. I think someone realised they've not kept there valuations with the market, so suddenly adjusted them.

No, what I mean is to use the halifax house index you need to know a value in the past to work out the current value. So which value do they take as the starting point?

Again, its open to bias isn't it.

cleve_2

Baz wrote: »

No, what I mean is to use the halifax house index you need to know a value in the past to work out the current value. So which value do they take as the starting point?

Again, its open to bias isn't it.

Oh I see what you mean, I'm afraid I don't know

marshallka

I had a key facts mortgage sent out to me on 8th October with estimated value of house on it and then had a mortgage offer sent out to me today with estimated house value of £21000 less than last month. I have rang IF and said there is perhaps some problem there and was told "you would be surprised!!". Surprised to say the least... it now looks like we are having a higher LTV but I was told that the loan to value did not matter if it was between 0% and 95% and there would be no difference at all to the rates on the mortgage offer!!

System

I think I may have fallen into this trap, when I purchased my flat in May 2007 it was valued at 125,000.

We offered 120,000 and it was accepted, put 12,000 down and got a 108,000 mortgage.

With my Abbey 5.34% interest only fixed deal expiring in May 2009 I was quite worried a couple of months ago as I figured my LTV is no longer 90% and 7.09% would have been doable but not comfortable. But after the recent rate cuts it seems I can just fall onto the SVR and be paying a very similar amount.

People tell me that flats like mine at "the bottom of the market" don't go down in value as much as other properties, so maybe that coupled with the 5,000 I managed to save in the last 2 years willmean I'll be able to remortgage, wish I had a time machine to see what will happen!

hethmar

Cor, dont we all joe - Id nip back about 30 years and buy up street fulls of houses and flog them in 2006

neverdespairgirl

Baz wrote: »

My mortgage is £120239 on the day I come off my 5 year fix. Over the last 3 months the same house as ours has been on the market for £235k, £215k and £210k. None have sold. The houses slightly larger than ours are on for £235, £240 and £245 etc. Its a very generic estate with around 8 different house types. However one house 2 steps up for ours sold in August for £190k but they had to move quick.

If by 2 steps up from yours, you mean it's bigger etc, I can't see yours being valued at more than £180k. If by 2 steps up, you mean next-door-but-one and the same as yours, I bet they don't value it at more than £190k.