if you add product fee to loan does it count towards ltv?

topcat007

Hi all,

quick question if you add a product fee onto the loan does this effect LTV?

Thanks

TrickyDicky101

Logic dictates it should given the value of the property doesn't move yet the size of the loan does.

Contemptuous

Yes it does - you're increasing the amount borrowed.

topcat007

Thanks both.

Sort of answering my own question now but knew i had seen this somewhere and just found it :

This is how it works...

"If you add the fees onto your mortgage, it protects you from losing any part of the fee paid upfront if your mortgage (or property purchase) doesn’t go ahead for any reason. Don't worry about it affecting your loan-to value band, adding it won't."


http://www.moneysavingexpert.com/mortgages/mortgage-fees-stamp-duty

kingstreet

Some lenders won't allow you to add fees to the loan if that would take you into the next LTV band. Nottingham BS is the prime example of this.

You have to reduce the mortgage amount by £830 to add £830 product and TT fee to the mortgage if this takes you to the LTV limit for the product. Just done one.

TrickyDicky101

That article also does say that if you are at the top of an LTV band then the lender may not allow you to add it so it is worth bearing this in mind.

topcat007

Thanks both really appreciated! Ill give them a call to confirm either way as i am smack on the LTV without adding product fees

florita1

It didn't with my recent virgin application