High
Loan to Value Finance
Since
the credit crunch the 100% product and over has been withdrawn
by many lenders as it is longer regarded as situable to
lending criteria. However below is information regarding
this type of product.
This
was a
product that needs to be handled correctly in order to
reap the potential benefits with no deposit. So expert
help is obviously very prudent. This is generally where
95% of the home loan is secured on the property but the
extra 30% or £30,000 which ever is the lower, is
an unsecured loan at the same loanrate as the secured
part.
This type of lending is high risk so the lender will only
accept a borrower with a good credit history. Now due
to the credit crunch these types of products have been
withdrawn due to their risk..
Caution
should be taken as there is no equity in the property
and the borrower may have to in the short term move or
sell for example with job relocation. This restricts what
the borrower can do in the early years and there is no
guarantees the house prices within the UK will remain
high or increase.
The
extra money is ideal to consolidate debt but caution must
be taken as the borrower maybe by consolidation converting
unsecured debt in secured debt and lengthening the loan
term. With a purchase the extra money can be used for
government stamp duty, property lending related fees,
home improvements and furnishing a property.
Some
lenders may give a very high income stretch with this
type of mortgage but the lender will look for an impeccable
credit rating with a high earning.
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