Another LTV question...

Ickle

My partner and I took out a mortgage last year with HSBC for 90% LTV. At the time HSBC had a better rate based on a LTV of 80% but we did not have sufficient funds available to finance this.

A year on and now HSBC have a better rate available fee free for a LTV of 85%.

My question is how will HSBC determine my current LTV on the property? Will they require a valuation or will they do a desktop calculation? If it is a desktop calculation will they look at the purchase price of my house and increase/decrease with respect to a relevant property index?

I am hoping that as we have paid off some capital and we have savings that we can use too, we will be able to qualify for the 85% LTV rate.

Thanks

kingstreet

Are there any early repayment penalties on your current product?

JimmyTheWig

Ickle wrote: »

My question is how will HSBC determine my current LTV on the property? Will they require a valuation or will they doa desktop calculation? If it is adesktop calculation will they look at the purchase price of my house andincrease/decrease with respect to a relevant property index?

I would imagine it would just be a desktop calculation based on the previous value with an index applied, as you say.

ERCs, as kingstreet suggests, may mean that this plan is not worthwhile.

Ickle

Thanks for your quick replies.

There are no early repayment fees on my current mortgage. Looks like it may be worthwhile giving them a ring to enquire about it.

kingstreet

TBH the brokers aren't going to be able to answer, because HSBC won't deal with us, so your best hope is an HSBC borrower who did the same thing being around just at the right time to answer you.

I can tell you what Halifax would do.

You ask them for a product transfer. They use their desktop indexed valuation system. If that isn't accurate enough, you can pay £80 for a drive-by valuation, or £130 for an internal inspection.

Ickle

Thanks - I'll ring up and see what they say.