What is the average LTV for mortgages today? Is 70-75% the standard? Or is 80-90% more realistic?
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I find it hard to have enough money for a 70-75% LTV. Is that problem unique to me?
financemum
1 year ago
Expert Financial Adviser Answer
Paul Ross DipPFS CII(MP&ER)
answered 1 year ago
I would say it's 75% LTV for people with equity in their property and 85%-95% for first time buyers. The problem is a concern for most people and to save a 25% deposit is hard for many people, if the haven't got the bank of mum and dad to fall back on.
There are deals for 90% mortgages available, even though they're not great as they price in the "risk" to them.
But don't forget to keep your credit rating clean as this will also have an impact. If you pay £200 per month for a loan, lenders will multiply this by 12 months and subtract this from your salary, which means that the amount borrowed is limited further. Black marks on your credit also has an impact more than pre credit crunch.
Good luck and feel free to ask further questions
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There are deals for 90% mortgages available, even though they're not great as they price in the "risk" to them.
But don't forget to keep your credit rating clean as this will also have an impact. If you pay £200 per month for a loan, lenders will multiply this by 12 months and subtract this from your salary, which means that the amount borrowed is limited further. Black marks on your credit also has an impact more than pre credit crunch.
Good luck and feel free to ask further questions
Expert Financial Adviser Answer
John Stirling
answered 1 year ago
I'd say the average has dropped below 70%, with many borrowers who have higher loan to value ratios effectively landlocked until their property increases in value.
For a new buyer around 80/85% is still vaguely commercial, but I really would avoid going to 90% if at all possible.
Paul is quite right about how other factors can affect your chances too.
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For a new buyer around 80/85% is still vaguely commercial, but I really would avoid going to 90% if at all possible.
Paul is quite right about how other factors can affect your chances too.
Expert Financial Adviser Answer
Dr David Carter FPFS
answered 1 year ago
You are not alone finding it hard to raise 25% or 30%. So look at loans up to 85% avoiding, as John and Paul say, the 90% Loan to Value products if you can.
The smaller the deposit, of course, the more you will have to borrow. If you still fit the criteria of the potential lenders, you would be wise to satisfy yourself that it will fit reasonably comfortably within your anticipated budget.
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The smaller the deposit, of course, the more you will have to borrow. If you still fit the criteria of the potential lenders, you would be wise to satisfy yourself that it will fit reasonably comfortably within your anticipated budget.
Expert Financial Adviser Answer
Darren Smith
answered 1 year ago
The greatest difficulty with this problem is agreeing the ltv!
lender opinion on value is enormously different at the moment.
the truth is that there will be many people who had 75% ltv 2-3 years ago and might find when they come to renew their deal that they have risen to 80% because lenders are taking an exceptionally cautious view on values.
it used to be the case that if you could supply recent sales data on similar properties that the lenders would consider an appeal but they will only do that now if the valuer agrees!
essentially, too many initial valuations have been challenged as over optimistic on repossessed properties, leaving the valuation company at risk from the lenders wrath.
valuations become cautious
lenders become super cautious
borrowers become stuck as their equity becomes more fluid than water!
and this is before you factor in how lenders treat new build properties! some lenders insist on a minimum of 40% deposit on new build flats which for some first time buyers is often the limit of their budget for a first home.
report abuse
lender opinion on value is enormously different at the moment.
the truth is that there will be many people who had 75% ltv 2-3 years ago and might find when they come to renew their deal that they have risen to 80% because lenders are taking an exceptionally cautious view on values.
it used to be the case that if you could supply recent sales data on similar properties that the lenders would consider an appeal but they will only do that now if the valuer agrees!
essentially, too many initial valuations have been challenged as over optimistic on repossessed properties, leaving the valuation company at risk from the lenders wrath.
valuations become cautious
lenders become super cautious
borrowers become stuck as their equity becomes more fluid than water!
and this is before you factor in how lenders treat new build properties! some lenders insist on a minimum of 40% deposit on new build flats which for some first time buyers is often the limit of their budget for a first home.
