LTV Shared ownership

Baby_steps_2

Hi,

I was just after some advice, I own a house using Bovis Jumpstart which means they have a secondary charge on the house for 25% of the value but I own 100% of the property.

I have just applied for a Hallifax mortgage using the LTV of 75%, however they are saying that due to the secondary charge the LTV is nearly 100%. So therefore I don't qualify for the 75% LTV rates. Which to me is effectivly saying I have no deposit, when (for Hallifax's purposes) I have a 25% deposit.

This doesn't seem to make any sense to me as should I default & share Hallifax should easily get back 75% & I would owe the reminang amount to Bovis of 25%. Therefore I can't undersatnd why they are saying the LTV is 100%.

Has anyone had any experience of this? Is this correct? :mad::mad:

Thanks!

kingstreet

Yes. It is correct.

You appear to have secured loans totalling 100% of the value of the property. It is only equity which is unencumbered which belongs to you which can be treated as your "deposit."

You have a shared equity product, not shared ownership. You do own 100% of the property, but you are mortgaged for all of it.

Your only option is a customer retention product from your existing lender and this will be based on the value of the property now and your total outstanding secured credit.

Baby_steps_2

kingstreet wrote: »

Yes. It is correct.

You appear to have secured loans totalling 100% of the value of the property. It is only equity which is unencumbered which belongs to you which can be treated as your "deposit."

You have a shared equity product, not shared ownership. You do own 100% of the property, but you are mortgaged for all of it.

Your only option is a customer retention product from your existing lender and this will be based on the value of the property now and your total outstanding secured credit.

Hi,

Thanks for your response. Do you know what the point of these schemes then, as I understod it was to give you effectivly a deposit for mortage lending purposes?

kingstreet

Yes. That is correct.

You purchased a property with an interest-free loan to reduce your mortgage, which saved you money and got you a lower mortgage rate, which again saved you money.

Once you have spoken to your equity loan holder to see if they will agree to a deed of postponement, you could then consider a remortgage as there are one or two lenders who offer shared equity remortgages, but you must obtain agreement to a deed of postponement from the second charge holder before you embark on this.

Idiophreak

Why were you after remortgaging in the first place, just to get a better rate, or to try and repay the equity loan?

Baby_steps_2

Idiophreak wrote: »

Why were you after remortgaging in the first place, just to get a better rate, or to try and repay the equity loan?

The intial fix period for mortage ended so was looking to transfer onto another product as its cheaper than the SVR.

kingstreet

So, are you an existing Halifax borrower looking for a new product, whats known to them as a product transfer, or are you looking to remortgage to Halifax from another lender?

I assumed the former in my earlier posts, but did try to cover all the bases for you.

Baby_steps_2

An existing borrower looking to transfer my product with hallifax, currently on there SVR and want to move to another fix.

kingstreet

Ok. So it's the product transfer option you aren't happy with.

In which case, it's the remortgage option to consider now. Talk to your second charge holder about the deed of postponement, then start looking for the lenders who will do a shared equity remortgage. There are two or three.

Now Help To Buy - Equity Loan exists, there may be more in the future.