LTV - shared equity

natalie656

Hi

I'm trying to work out my LTV on my property but getting a bit confused!!

We brought the house in 2009 on a 70/30 basis. The house was 135,000 and we took out a mortgage for 94,500 (70%).

We now have an outstanding mortgage of 89,000 and i would say the value of the house is around the same as it was when we brought it. We don't pay any rent on the 30% and can purchase this after 5 years.

So do i work out my LTV on the 94,500 or the full amout of 135,000???

Thanks in advance.

kingstreet

You don't buy more of the property, you simply pay off the loan. You are confusing shared equity with shared ownership. You own 100% of your property, but you have a mortgage and a second charge loan secured on it.

As things stand, you have a mortgage of £89k and a loan of £40.5k secured on a property worth £135k.

Your secured finance therefore adds up to a loan to value of 96%.

This assumes the mortgage and loan added up to 100% when you purchased and that you paid no deposit. Is this true? It seems more likely you got a 70% mortgage, 25% equity loan and paid 5% deposit.

Why the interest in the LTV? what are you considering?

natalie656

No we didn't pay a deposit when we brought the property nationwide accepted the 30% from the housing association as the deposit.

I was looking into borrowing more but nationwide (who are mortgage is with and our fixed rate deal has come to an end) turned me down and can't really see why.

They said it was due to with the fact that we had a shared equity mortgage.

We have a joint income of approx 40,000.
A quite large loan with around 15k outstanding
A few credit cards with about 6k on that we were going to pay off with the extra borrwoing.

We've never missed any payments so thought it may have had something to do with our LTV.

kingstreet

It is. You have very little equity.

If the property is still worth what you paid for it, you have about 4%. They'd normally expect you to have 20% to 25%, or more, before they'd consider any kind of additional borrowing.