Help explain LTV when in negative equity?

bobby_davro_2

Hello, just need someone to help clear something up.
If in 2007, a house was bought for:

£120k with a 10% (£12k) deposit (Interest only)
However, similar houses in the street are now going for only £85k as the crash has never recovered.

If I was looking to remortgage, but needed a 20% LTV.... do i just need to add another £12k based on the original value..... Or is my LTV actually a negative ~40%, and i'd need to find an additional ~£50k just to get to 20% LTV?

Hope someone can help clarify for me as it's quite a big difference
Thanks

[Deleted User]

Your LTV is mortgage/value as a percentage, so yours is around 140%, so remortgaging would be out of the question at the moment.

bobby_davro_2

Thanks for swift reply.
Is it the same rule if you are just looking to move to a different product with the same lender?
I.e Will they still value the house at current value rather than the original sale value you agreed with them?
And if so, how do they calculate the current value? Do they come and visit the street and house for a full assessment or is it all automated on a computer like Zoopla.
If it's Zoopla, then it actually has my house at £115k which is great but it would never sell at that price...

Thanks

amnblog

bobby_davro wrote: »

Is it the same rule if you are just looking to move to a different product with the same lender?
Thanks

That depends on the lender.

bobby_davro_2

Well it's Halifax if it helps

amnblog

It does.


You will find Halifax will offer new products at loan to values up to 120%


They will base this loan to value on the indexed valuation they hold for your property.


Might be worth getting a broker to deal with this for you.