Are you hit by evaporating equity? Poll discussion

975 Posts
Poll between 24 Nov - 01 Dec 2008:
Are you hit by evaporating equity?
The loan-to-value ratio of your house - the proportion of your house’s value you’re borrowing - is a key factor in getting a mortgage. Yet there’s a double whammy hitting this across the nation, that I call the evaporating equity trap.
Problem 1. House Prices. House prices have dropped 15% on average, meaning your mortgage is now likely to be a bigger proportion of your home’s value.
Problem 2. The Credit Crunch. Lenders are now much more cautious, meaning you need an LTV of 75% or LESS to get a decent deal; it used to be 90%.
What's the current LTV of your mortgage?
To work it out, DIVIDE your OUTSTANDING MORTGAGE by the estimated current value of your HOME.
A. LTV under 20% 12% (712 votes)
B. LTV 21-40% 14% (789 votes)
C. LTV 41-60% 16% (902 votes)
D. LTV 61-75% 11% (600 votes)
E. LTV 76-90% 9% (525 votes)
F. LTV 90-100% 7% (421 votes)
G. LTV 100%+ (negative equity) 5% (265 votes)
H. Don’t have a mortgage 13% (728 votes)
I. Paid off my mortgage 13% (758 votes)
Voting has now closed, but you can still click 'post reply' to discuss below. Thanks
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Are you hit by evaporating equity?
The loan-to-value ratio of your house - the proportion of your house’s value you’re borrowing - is a key factor in getting a mortgage. Yet there’s a double whammy hitting this across the nation, that I call the evaporating equity trap.
Problem 1. House Prices. House prices have dropped 15% on average, meaning your mortgage is now likely to be a bigger proportion of your home’s value.
Problem 2. The Credit Crunch. Lenders are now much more cautious, meaning you need an LTV of 75% or LESS to get a decent deal; it used to be 90%.
What's the current LTV of your mortgage?
To work it out, DIVIDE your OUTSTANDING MORTGAGE by the estimated current value of your HOME.
A. LTV under 20% 12% (712 votes)
B. LTV 21-40% 14% (789 votes)
C. LTV 41-60% 16% (902 votes)
D. LTV 61-75% 11% (600 votes)
E. LTV 76-90% 9% (525 votes)
F. LTV 90-100% 7% (421 votes)
G. LTV 100%+ (negative equity) 5% (265 votes)
H. Don’t have a mortgage 13% (728 votes)
I. Paid off my mortgage 13% (758 votes)
Voting has now closed, but you can still click 'post reply' to discuss below. Thanks

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This discussion has been closed.
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The problem in this country is that we don't manufacture anything anymore, we simply fight over Victorian scraps and Edwardian left-overs, and haggle over stupid things like fox hunting and equal rights for lab rats.
We foolishly put all our eggs into one basket by allowing the financial and banking sector to generate most of the revenue for Britain through junk bonds and gambling taxpayers money in risky offshore investments, and that is the cause of the current plight.
Sounds right, outstanding amount is just over a third of the value of the house.
Whereas I am at -30%. That's right - negative equity of approx 30% of the value of my house. I'm so glad I bought my house early last year with a Northern Rock mortgage and borrowed more than the house was worth to sort out my other debts. Since then the gap has just widened instead of shrinking as I'd hoped it would.
Yes, I think that makes me "the greater fool".
I am sooo looking forward to June 2009 when my intro offer ends and I have to find a good deal somewhere.
Not really just I was lucky and bought in 1998