Are you hit by evaporating equity? Poll discussion

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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Replies

  • Coveredinbees!!!!Coveredinbees!!!! Forumite
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    Is this right, my house is probably worth 160,000 allowing for the drop in value and I owe 60,000 so the LTV is 37.5% is that right?
    I need a new signature.
  • British Steel is gone, Staffordshire pottery is almost dead, the cotton mills are all closed but China is booming!

    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.
  • Is this right, my house is probably worth 160,000 allowing for the drop in value and I owe 60,000 so the LTV is 37.5% is that right?

    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.
    --Simon.
  • *Louise**Louise* Forumite
    9.2K Posts
    I bought this house last year, my LTV is 62.5%
    Cross Stitch Cafe member No. 3
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  • Coveredinbees!!!!Coveredinbees!!!! Forumite
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    Yes, I think that makes me "the greater fool". :(

    Not really just I was lucky and bought in 1998
    I need a new signature.
  • When I bought my house, my LTV was 40%. However due to the recent price slump I would now estimate it to be around 43%.
    Loving the dtd thread. x
  • I've got a 66%LTV... If I hadn't had the Good old Northern Rock Together (Followed swiftly by the Together Recovery after the ex legged it and left me in arrears on everything) I'd be at 46%... But to be honest, I wish I'd never bought this house in the first place and probably won't be able to sell it with the current neighbours anyway, recession or not!
    A very proud Mummy to 3 beautiful girls... I do pity my husband though, he's the one to suffer the hormones...
    Krystal is so smart and funny and wonderful I am struck dumb in awe in her presence.

  • Coveredinbees!!!!Coveredinbees!!!! Forumite
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    We had that trouble with our old house but got lucky - they were out when the people who bought viewed. Turns out she moved not long after we did but I didn't want to stay where we were anyway, it's much nicer here.
    I need a new signature.
  • SandCSandC Forumite
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    21-40% although I am really unclear as to what houses are going for at the moment. That range covers me for a drop in prices of up to 40% from the height.
  • SandCSandC Forumite
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    Just checked on Rightmove and really there has been little change in asking prices in my area (we never were pricey anyway). Of course that doesn't mean they are actually selling!
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