Are you hit by evaporating equity?
The loan-to-value ratio of your house - the proportion of your house’s value you’re borrowing - is a key factor in getting a mortgage. Yet there’s a double whammy hitting this across the nation, that I call the evaporating equity trap.
Are you hit by evaporating equity?
The loan-to-value ratio of your house - the proportion of your house’s value you’re borrowing - is a key factor in getting a mortgage. Yet there’s a double whammy hitting this across the nation, that I call the evaporating equity trap.
Problem 1. House Prices. House prices have dropped 15% on average, meaning your mortgage is now likely to be a bigger proportion of your home’s value.
Problem 2. The Credit Crunch. Lenders are now much more cautious, meaning you need an LTV of 75% or LESS to get a decent deal; it used to be 90%.
What's the current LTV of your mortgage?
To work it out, DIVIDE your OUTSTANDING MORTGAGE by the estimated CURRENT value of your HOME (ie taking house price falls into account)
Results
| A. LTV under 20%. |  | 712 votes (12 %) |
| B. LTV 21-40%. | | 789 votes (14 %) |
| C. LTV 41-60%. | | 902 votes (16 %) |
| D. LTV 61-75%. | | 600 votes (11 %) |
| E. LTV 76-90%. | | 525 votes (9 %) |
| F. LTV 90-100%. | | 421 votes (7 %) |
| G. LTV 100%+ (negative equity). | | 265 votes (5 %) |
| H. Don’t have a mortgage. | | 728 votes (13 %) |
| I. Paid off my mortgage. | | 758 votes (13 %) |
5,700 votes received.
We try to use technology to limit voting to one per person. Occasionally, this may erroneously block a few people's votes (eg, from shared offices). Apologies for that.
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