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Mortgages 55% LTV and below
In these times of the credit crunch there are certain factors that will make a mortgage or remortgage application go through a little smoother. One of the main factors in a lender deciding if a mortgage application will complete is the loan to value, the loan to value (LTV) for mortgages of 55%, 50% and below make it very easy for a borrower to fit the lenders criteria as the borrower will either put in 45 or 50% deposit or, for remortgage's have 45 or 50% equity which reduces the risk to a potential lender.
The low loan to value of mortgages and remortgage's with 45 and 50% deposit mean the lender criteria for the mortgage will be much more forgiving with things like missed payments, defaults, CCJ's and mortgage arrears making the likely hood of the mortgage completing much higher.
For your convenience we have a matrix below showing the deposit needed for property values between £200,000 and £300,000 with a 55% deposit
| Property Value | Mortgage Deposit at 55% LTV (45% Deposit) |
Mortgage Borrowing at 55% LTV (45% Deposit) |
|---|---|---|
| £200,000 | £90,000 | £110,000 |
| £210,000 | £94,500 | £115,500 |
| £220,000 | £99,000 | £121,000 |
| £230,000 | £103,500 | £126,500 |
| £240,000 | £108,000 | £132,000 |
| £250,000 | £112,500 | £137,500 |
| £260,000 | £117,000 | £143,000 |
| £270,000 | £121,500 | £148,500 |
| £280,000 | £126,000 | £154,000 |
| £290,000 | £130,500 | £159,500 |
| £300,000 | £135,000 | £165,000 |
55% Mortgage Products and Fees
Mortgage products for people wanting to borrow 55% or less of the property value vary greatly, you will find all the major types of mortgages available including fixed rate deals, discounted rate deals and variable rate deals on offer as well as interest only and repayment payment options.
The fees attached with a mortgage with such a low loan to value are the pretty much the same for those with higher loan to values, although that being said for the mortgage products that charge a lenders arrangement fee on a percentage basis (such a 1%) its likely that the monetary amount would be less as the borrowing is likely to be less.
We have a few pages dedicated to showing the likely payments for interest rates from 7% to 9% ranging from 10 to 25 years showing payments from £160,000 to £200,000 and from £210,000 to £250,000 which should give an indication of the likely payments based on capital repayment.
Fees that are very unlikely to be charged are higher lending charges as these only apply to mortgage borrowers who need a higher loan to value (typically above 80 or 85% LTV)
55% mortgage with adverse credit
A 55% (or less) mortgage, depending on the lender, will allow adverse credit to be registered on the borrowers credit file and will normally be much more forgiving in regards to what adverse credit they will allow than the higher LTV amounts. For instance, a 55% mortgage will allow more adverse credit to be registered than an 80% mortgage due to the fact that the lender will see the lower loan to value product being less risky than a higher loan to value product.
One thing to be careful of when applying for any mortgage with adverse credit is the mortgage broker fee as traditionally brokers who deal with adverse credit will charge a fee of between 1 and 3%
Baker Financial brokers operate on a no broker fee basis
The types of bad credit a mortgage (termed as bad credit mortgages) will allow vary depending on the lender but you can expect a 55% (or less) mortgage to allow unlimited defaults, large CCJ's, possibly unlimited CCJ's to be registered and will usually allow a number of missed mortgage payments.
If you want a mortgage and have a deposit or equity of 45% or more contact a broker who wont charge a fee, contact us today.
