Do you need to remortgage for the full value of your property? Due to recent clampdowns on borrowing, 100% LTV remortgages are now extremely difficult to find, and the high-LTV remortgages that are available will have much stricter lending criteria attached. Many say that the near-extinction of the 100% LTV remortgage is a positive thing, because it promotes more realistic and responsible borrowing. However, it does come as a blow to those who would previously have been able to free up substantial equity in their home. 2009-06-21T23:00:00Z 2009-06-21T23:00:00Z

<p>LTV stands for loan-to-value. This ratio is figured by dividing the amount you want to borrow by the amount your property is worth. If you want to borrow £90,000 and if your house is worth £100,000, then this equates to a 90% LTV mortgage. 60% LTV mortgages and lower are considered low risk to lenders while 100% LTV constitutes a very high risk. <br><br>Rates on 100% LTV mortgages were variable, fixed, capped, or discounted depending on the lender. However, as lending criteria have now become considerably stricter, 100% LTV mortgages are not currently being offered.&nbsp; One of the main reasons why the 'credit crunch' occurred was due to irresponsible lending to people who could not afford the repayments.&nbsp; People with a 100% LTV mortgage found that lenders would charge an above average interest rate due to the high risk nature of their mortgage.&nbsp; <br><br>This vicious circle of charging the highest fees to those that could least afford it inevitably resulted in numerous people defaulting on their mortgage payments. When house prices then fell due to a low demand and a lack of mortgage products on the market, people with 100% mortgages found themselves in a negative equity situation. This means that the market value of their homes had fallen below the amount that they had left to repay on their mortgage.</p><p>The attraction of a 100% LTV mortgage was that a large deposit was not required. This gave prospective borrowers with little to no savings the opportunity to take out a mortgage regardless of the amount they were able to put down.&nbsp; Borrowers with 100% LTV mortgages were taking the gamble that their properties would increase in value to the extent that they would be able to sell their properties for a profit, befoire having paid off their mortgage in full.&nbsp; The gamble failed for thousands of people when housing prices fell for the first time in a decade, and they found themselves in a negative equity situation.</p><p>If you have few savings but are keen to get onto the property ladder, we would advise speaking with an adviser to get mortgage advice relating to your financial circumstances.&nbsp; It's unlikely that a 100% LTV mortgage will be available again in the near future, although many higher LTV products are now reappearing for those with good credit ratings.&nbsp; If you'd like help finding a qualified mortgage adviser in your area, take a minute to fill out our short <a target="_blank" href="http://www.simplyfinance.co.uk/remortgage_three_step.dhtml">mortgage enquiry form</a> and you will be connected by an FSA-authorised adviser shortly.</p>

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<br>Loan to value (LTV) is the ratio of how much you are looking to borrow over how much your home is worth. For example, if your home is worth £100,000 and you're looking to borrow £80,000, the LTV of your mortgage will be 80%.&nbsp; The most controversial mortgage product in recent years is the <span>100% LTV mortgage</span> whereby someone would, if their home is worth £100,000, want to borrow the entire £100,000.<br><br>To get the best possible deal on a <a target="_blank" href="http://www.simplyfinance.co.uk/Mortgage/First-Time-Buyer/Home-Mortgage-Loans/home-mortgage-loan.html">home mortgage loan</a>, you would need to put up some of your savings against the loan would enable you to save money on interest payments.&nbsp; Your credit rating would also affect the amount that you could borrow.&nbsp; A 100% LTV mortgage would mean that you would not need to have any savings at all, so the interest payments would have been very high, regardless of your credit rating.&nbsp; Understandably, this was a popular product until recently for those keen to get onto the property market but with little savings. Since the property market crash, 100% LTV mortgages are no longer offered, and the maximum you should expect to borrow is around 80% of the value of the property if your credit rating is good. <br><br>Since mortgage lenders have to pull in a continuous flow of borrowers to stay in business, they will offer high loan to value mortgages to potential borrowers in addition to the safer, low-risk products.&nbsp; Although the lending criteria is now much tighter than it has been, you would still be able to borrow a considerable amount towards the value of the property if your credit rating is very good.&nbsp; This type of loan is usually provided to borrowers who have proof of stable income and future earning potential, but who find it difficult to get enough savings together for a deposit.&nbsp; <br><br>If you'd like help finding the best alternative to 100% LTV mortgage, take a moment to fill out a short form, and we will introduce you to a lender from the SimplyFinance network who will be able to answer all of your mortgage questions before searching the market to find the very best mortgage deal for you.&nbsp;

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