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.
SimplyFinance would recommend talking through your options with a qualified financial advisor. Currently, there are no UK lenders that would be prepared to lend at above an LTV of 95%, and even this would be only available to existing customers and those with a faultless credit rating. By speaking to someone with access to a wide range of borrowing options, you may actually find an alternative to a 100% LTV remortgage that better suits your financial needs.
100% LTV Remortgage Facts
- Eliminate initial costs. 100% LTV remortgages are for people with little savings. This type of remortgage covers the entire cost of purchasing the property, and it eliminates the need for a deposit. 100% LTV remortgages are now almost impossible to find. This is as a result of tighter lending criteria following the recent property market crash.
- One-off fees are still applicable. Although no deposit is required, one-off fees like application and broker fees, stamp duties, and legal fees are not covered.
- Higher than average interest rates. 100% LTV remortgages carry a higher than average interest rate because the lender is taking on a large amount of risk.
- Could result in a negative equity situation. if the property market crashes (as it did recently), you may be trapped in a negative equity situation because you will have borrowed more money than your property is now worth.
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