Secured Loan

edwards97

Hi a few years ago i took out a Secured loan which was 120% LTV. Stupid idea anyway since then I have found out that the company valued my house at a much lower value than what I thought it was at that time and they base the loan on the valuation I had given them which was just a guess on my part at that time.

They said on my loan docs that it was 120% LTV when actually it turns out to be 165%. Anyone had any experience about this I think this is irresponsible lending as I never would have taken it if I knew my LTV was as much as that. I have gone to FOS about this and waiting reply but I guess this could be some time. Just want to get a feel if I have a case as this is deception in the highest degree in my view.

Gaz83

edwards97 wrote: »

Hi a few years ago i took out a Secured loan which was 120% LTV. Stupid idea anyway since then I have found out that the company valued my house at a much lower value than what I thought it was at that time and they base the loan on the valuation I had given them which was just a guess on my part at that time.

They said on my loan docs that it was 120% LTV when actually it turns out to be 165%. Anyone had any experience about this I think this is irresponsible lending as I never would have taken it if I knew my LTV was as much as that. I have gone to FOS about this and waiting reply but I guess this could be some time. Just want to get a feel if I have a case as this is deception in the highest degree in my view.

This part isn't clear.

They based the loan on the value you gave them. Surely you would have realised they had given you a 165% LTV if you gave them the value in the first place?

thebritishbloke

So what you're saying is, that you've suddenly realised you've borrowed too much money and you're trying to find an excuse to not pay them back?

Yeah, good luck with that. Regardless, you agreed to borrow that much money, you borrowed the money and still have to pay it back.

edwards97

Ok sounds a little confusing I admit. They gave me a ltv of 120% based on the value I had given themwhich was just a guess on my part in a phone call i had. A few months ago I asked for some documents from them and they sent me by accident the valuation they did on my house at the time which I had never seen, It valued my house at considerably less which when I work out shows the actual LTV to be 165%. They told me it was 120%.

edwards97

thebritishbloke wrote: »

So what you're saying is, that you've suddenly realised you've borrowed too much money and you're trying to find an excuse to not pay them back?

Yeah, good luck with that. Regardless, you agreed to borrow that much money, you borrowed the money and still have to pay it back.

Thats a little unfair. The argument is not about the amount borrowed or affordability its about the excessive LTV, If i had know it was 165% I would have never taken it end of. Im quite happy to pay them back every penny of what I borrowed however what I want them to do is put me back in the position that i would have been had it been 120% which means I want the interest back on the excessive LTV amount.

Ebe_Scrooge

Unless I'm missing something, how does the LTV calculation change anything ? You borrowed a sum of money, and presumably are making the repayments with no problem ? What does it matter now how much they valued your house at - or did they give you a less favourable APR based on 165 % LTV than if it had been 120 % ?

If you fail to make repayments, they can repossess the house, the LTV surely doesn't change anything ? In terms of your ability to meet the repayments, it makes no odds.

Sorry, not meaning to be argumentative, I just don't see what difference it makes.

edwards97

Ebe_Scrooge wrote: »

Unless I'm missing something, how does the LTV calculation change anything ? You borrowed a sum of money, and presumably are making the repayments with no problem ? What does it matter now how much they valued your house at - or did they give you a less favourable APR based on 165 % LTV than if it had been 120 % ?

If you fail to make repayments, they can repossess the house, the LTV surely doesn't change anything ? In terms of your ability to meet the repayments, it makes no odds.

Sorry, not meaning to be argumentative, I just don't see what difference it makes.

The fact that it is virtually impossible to get out of this loan, it stops me from getting a new mortgage beacuse im always in negative equity, ive been stuck for 9 years. If it had been true to 120% it really would not have been a problem for me as its easy to get back in to equity on that, 165% however is a different matter.

Ebe_Scrooge

Ah, I see, fair enough. I can understand your problem now. When is this loan due to be paid off ? If it's still got several years to go, and you're wanting to remortgage, I wonder if the same lender would give you a new mortgage based on the current value - which hopefully is higher now than when you first took the loan out ? I'm not sure, just thinking aloud really

Other than that, it may be worth waiting to see what the FOS have to say, and take it from there.

edwards97

Ebe_Scrooge wrote: »

Ah, I see, fair enough. I can understand your problem now. When is this loan due to be paid off ? If it's still got several years to go, and you're wanting to remortgage, I wonder if the same lender would give you a new mortgage based on the current value - which hopefully is higher now than when you first took the loan out ? I'm not sure, just thinking aloud really

Other than that, it may be worth waiting to see what the FOS have to say, and take it from there.

Been paying a 70k plus loan for 9 years with 16 years left, paid off about 9k. Probably paid them 50-60k. I hope the FOS can do something as I will never get enough equity to move house otherwise. Its delaying my extra kids plan.

mcpitman

To be clear you borrowed £70k on a property that was worth £42k? Whereas you thought you were borrowing £70k on a property worth 58k?

Alternatively do you already have a 100% mortgage and borrowed the extra 20-60% on a secured loan?

HappyMJ

edwards97 wrote: »

Been paying a 70k plus loan for 9 years with 16 years left, paid off about 9k. Probably paid them 50-60k. I hope the FOS can do something as I will never get enough equity to move house otherwise. Its delaying my extra kids plan.

Surely the house is worth more than £42,000 today and you can remortgage to a better rate. If you've paid £50-60k over 9 years you're paying around £500 per month which is a fairly reasonable amount to pay on £70,000. I imagine fees were added at the outset and to have a balance of £61,000 outstanding is also quite reasonable. My mortgage calculator tells me your interest rate is around the 7% mark which is very good for a 165% LTV mortgage.