Secured Loan

sy7227

This may be a silly question but could anyone answer the following question? If a company was to secure a loan agaisnt my property, would they need to ensure that there is enough equity in the prooperty?

_Andy_

They'll do a valuation yes - I assume then you don't have any equity? In which case you're not going to be able to obtain any secured lending.

sy7227

Thats the problem my property was worth £100,000 in Jan 2005. Had a mortgage of £95,000 but then I was given a secure loan of £20,000 in 2006 so how did the company allow me to go into negative equity?

_Andy_

Some companies used to do higher than 100% LTV secured loans and mortgages.

ILW

sy7227 wrote: »

Thats the problem my property was worth £100,000 in Jan 2005. Had a mortgage of £95,000 but then I was given a secure loan of £20,000 in 2006 so how did the company allow me to go into negative equity?

Those were the days.

sy7227

Maybe I should look into this further. The company in question is Welcome Finance. Not sure if they do or did a higher LTV. But I can not hold them totaly responsible as I did accept the loan probably without thinking it through clearly. Needed a quick fix, but now it has turned into a long term problem which I do not want to loose my home over.

CLAPTON

sy7227 wrote: »

Maybe I should look into this further. The company in question is Welcome Finance. Not sure if they do or did a higher LTV. But I can not hold them totaly responsible as I did accept the loan probably without thinking it through clearly. Needed a quick fix, but now it has turned into a long term problem which I do not want to loose my home over.

What are you trying to get at here?

If there is sufficient equity in your home and you have defaulted on the secured loan then it is almost certain they would force the sale of your home.

If there is insufficient equity in your home then its unlikely they will force the sale as they will still be left with a shortfall.

I would suggest you post on the debt free wannabe board

simon_templar_2

Could be another mis-sold a loan type of question??

sy7227

Thanks CLAPTON, what I am getting at is the fact that I had no equity in my property when I was sold this product. It would appear that WFS did not conduct a valuation. So unless they did 100% - 125% LTV this has been mis sold. Also no Estimator was sent to my address to carry out a valuation. So therefore I am saying they have mis sold me his product.

ILW

sy7227 wrote: »

Thanks CLAPTON, what I am getting at is the fact that I had no equity in my property when I was sold this product. It would appear that WFS did not conduct a valuation. So unless they did 100% - 125% LTV this has been mis sold. Also no Estimator was sent to my address to carry out a valuation. So therefore I am saying they have mis sold me his product.

Make the payments or lose the house seem to be the options to me. You are not going to wriggle out of it thru miss selling.

juliar_2

They will verify your property