Secured Loan

Gaz83

edwards97 wrote: »

Yes you are. They gave me 120% on my guessed valuation not on the actual value of my house when they valued it. So when I work out what I was lent on there actual valuation it worked out to be 165% because the actual value of my house was considerably less.

I see. When did they conduct their valuation? Was it before or after the loan was agreed?

edwards97

EvonneW wrote: »

So, if I've got this right, one way or the other you borrowed £162k (165% of 98k or 120% of 135k)? Is this broken down on your mortgage statement into two amounts, ie mortgage and further advance/secure loan?


If you bought the house from a seller, how much did you actually pay the seller for the house? £98k or 135k? or some other amount?


If you owned the house outright, did you ask for a £162k loan based on your own £135k valuation?


£162k at 11% on a 25 year mortgage is about £1,500/month. You should currently owe about £143k after 9 years, if that is the case (according to the hsbc calculator, anyway).


If the secured loan part is ca 64k (162k total loan - 98k lower value) then the payments for that, at 11% for 25 years) would be £626/mo. Is that what you meant when you said you had paid ~70k for the loan over the last 9 years? (626x12x9=67608). In which case the outstanding balance would be approx. £57k.



A 98k loan at 11% over 25 years would have about 86.5k left on it after 9 years.


Is this the case?

The loan was not from my mortgage company it was from a company specializing in secured Lending. Also the Loan was variable and have paid between 657 - 692 a month. The interest rate now is higher than what it was 9 years ago. The Secured loan was taken over 25 years but not in conjunction with the mortgage. it was for 71k. My Mortgage was about 91k so total lending was 162k. My valuation on the house was 135k so 135k x 20% is 162k which is the 120% LTV. They valued my house at 98k so LTV at 120% should have been total lending of 117.6k so you minus the value of the current mortgage i should have received 26.6k in secured lending. Big difference. They advised me my ltv was 120% which in reality it was not therefore tying me in the loan as it would be impossible to remortgage at any point to cover the extra.

Saying all this the calculations are unimportant at the moment as its the principle of how I was deceived. I will worry about calculation if the FOS find in my favor.

edwards97

Gaz83 wrote: »

I see. When did they conduct their valuation? Was it before or after the loan was agreed?

The date was either the same day or the day before. But i assume it was done before because hand written on my application it said to do valuation before Loan could be given.

edwards97

The other thing to note is the argument from the secured lending company was that I could afford it. This is not about affordability its about the result of being lent 165% LTV without knowing about it plus the implication and problems it has caused and still is, cant see myself being able to move for a while. Officially stuck.

Clive_Woody

edwards97 wrote: »

The other thing to note is the argument from the secured lending company was that I could afford it. This is not about affordability its about the result of being lent 165% LTV without knowing about it plus the implication and problems it has caused and still is, cant see myself being able to move for a while. Officially stuck.

The £98K figure may well be an internal figure that they expect they would get from an auction if you defaulted on the loan and they had to sell the house quickly in conjunction with your mortgage lender. They may also have deducted late payment fees, repossession fees, legal fees etc to end up with a figure of £98k which is what they might see in their bank at the end of it. I think you are getting too hung up on this figure.

This may not be the market value they valued the house at but may be a figure they use internally to estimate their expose if the loan went bad. The 120% LTV figure may be the publicly quoted figure but they may do a further assessment for their own records.

I think a few people have asked already, but have you had a recent valuation done on your house. If not get an estate agent around now and get a current figure. From 9 years ago, generally speaking, house prices have gone up a reasonable amount. Your situation regarding moving may not be as bad as you think.

Clive_Woody

tracyjanney wrote: »

Well, there is no need to stick on with any cash crisis as you can handle it by opting for the 12 month loans uk @ 12monthloansbadcredit.me.uk/12-month-loans-uk.html available at online market.

Cool, please can I have a £70K loan then, repayable over 12 months. I have a very rich Nigerian Prince friend who can act as guarantor.

[Deleted User]

What is your house worth now?

I never knew you could get a loan over 100% of the house value. How does that work if you default? Do you still owe the difference or is that written off?

Pixie5740

camelot1971 wrote: »

What is your house worth now?

I never knew you could get a loan over 100% of the house value. How does that work if you default? Do you still owe the difference or is that written off?

You can't any more. Once upone a time (before 2008) lenders such as Northern Rock gave out 125% LTV mortgages.

The television was awash with adverts from Ocean Finance, First Plus Finance (I think that advert had Carol Vorderman in it), Norton Finance, and many others. The adverts went along the lines of, "Do you have £25k of debt? Are you a home owner? Do you have CCJs? Are you absolutely crap with money? (Alright so they didn't ask that question but they may as well have.) Why not lump all your debts together into one monthly payment of £180?" These loans were secured loans and a very expensive way of repaying £25,000. I'm sure many people regret taking them out now.

This type of lending is known as sub-prime lending or, as I like to call it, the huge toxic slag heap that kick started the banking crisis, if you don't count bankers' greed.

CHR15

Borrowers greed or bankers greed?

Gaz83

CHR15 wrote: »

Borrowers greed or bankers greed?

Both.

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