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Loan to Value Ration is ruining my life!!!
BafflledFromBromley
Posts: 6 Forumite
Really need some advice! Have been lurking for a while now but finally need some help badly.
Our situation is as follows.
We bought our house 5 years ago and have been great customers. Never missed a payment, always prompt and on time.
We got an additional advance of £20'000 a few years back to renovate.
Our outstanding mortgage amount is now approx £195'000 and despite our house once being worth £280'000 it is now value at £230'000 on a good day.
We have found an absolute wreck of a house and have had our offer of £210'000 accepted. I assumed that that would leave us £20'000 to move and make it livable but now I know different.
Our mortgage company (The Chelsea) are now saying that our loan to value ratio is too low and basically that we won't be able to afford it. I just don't get it. Nothing from their end will change as we'll keep paying the monthly amount but just on a different property. Also, although its only worth £210'000 now once we've done the bare essentials it'll be at least £250'000 without breaking a sweat.
Is there anything we can do? We have no savings and are also tied in for 4 more years with them.
Please help me as I can just feel my dream home slipping through my fingers! xxx
Our situation is as follows.
We bought our house 5 years ago and have been great customers. Never missed a payment, always prompt and on time.
We got an additional advance of £20'000 a few years back to renovate.
Our outstanding mortgage amount is now approx £195'000 and despite our house once being worth £280'000 it is now value at £230'000 on a good day.
We have found an absolute wreck of a house and have had our offer of £210'000 accepted. I assumed that that would leave us £20'000 to move and make it livable but now I know different.
Our mortgage company (The Chelsea) are now saying that our loan to value ratio is too low and basically that we won't be able to afford it. I just don't get it. Nothing from their end will change as we'll keep paying the monthly amount but just on a different property. Also, although its only worth £210'000 now once we've done the bare essentials it'll be at least £250'000 without breaking a sweat.
Is there anything we can do? We have no savings and are also tied in for 4 more years with them.
Please help me as I can just feel my dream home slipping through my fingers! xxx
0
Comments
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Check out Chelsea's current financial stability!0
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You're talking about owing £195k on a property currently worth £210k. LTV of 93%. Most lenders are restricting lending to 90% LTV at the moment. Ask them if you reduced your borrowing to £189k would that make a difference. And take that extra £6k out of your equity (if you can without ruining your renovation plans too much).Are the words 'I have a cunning plan' marching with ill-deserved confidence in the direction of this conversation? :cool:0
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SouthCoast wrote: »Check out Chelsea's current financial stability!
What do you mean Southcoast?0 -
Seven prominent building societies could have to hand back cash to the Bank of England or put up more mortgages as collateral for it following a downgrade of their credit position by ratings agency Moody's.
Chelsea, Yorkshire and other mutuals are in talks with the Bank over concerns they are now in breach of the terms under which they were able to gain money from the Special Liquidity Scheme introduced at the height of the credit crunch.
http://www.guardian.co.uk/money/2009/apr/20/building-societies-credit-rating-change0 -
You borrowed a good chunk of your equity in the good times and that has left you in this position in the bad. Its always a risk and one that has been repeated many times over the decades. This time round far more.
You have no savings but want to buy a "wreck of a house" suggesting capital investment into it will be required. You dont have equity and of course it costs money to move house. I think you are perhaps letting your heart guide you when you should really be using your head.I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0 -
SouthCoast wrote: »
Sorry to be dense but what does this mean for me? I relatively new to this and am struggling with keeping on top of it all!0 -
BafflledFromBromley wrote: »SouthCoast wrote: »
Sorry to be dense but what does this mean for me? I relatively new to this and am struggling with keeping on top of it all!
Chelsea hasn't got any money to lend!0 -
Dunstonh - I do agree with what you've said. We are of course attempting to rectify our situation, hence me joining this site and becoming more aware of how important it is to be financially savvy - something that in this 'want it, buy it' credit driven society had passed me over.
My husband has a steady job and good income so our idea of steadily doing up a wreck with an initial boost from the sale of our house didn't seem so unrealistic to us (until of course we discovered our loan to value ration had plummeted). Maybe we are being a little ambitious but with a growing family and a rapidly shrinking house it is our only real way of moving up the property ladder so to speak.
My husband I are both in construction so are able to renovate fairly easily.
The problem is getting the house in the first place . . . .
Help!0 -
You want to embark on an ambitious "investment," but the reality is you don't have the money to do so. Tough luck.poppy100
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That is hardly constructive is it?
It is not just an investment but our family home which we will work tirelessly to renovate. The amount we pay each month for our mortgage will continue to be paid and so in actual fact we do have the money to buy the house and do it up. If the Chelsea hadn't put the Loan to Value Ration down then there wouldn't have been an issue.
I was asking for advice as to how to approach our mortgage provider not holier-than-thou claptrap thanks.
If you have nothing useful to say then why reply?0
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