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Loan to Value (LTV)
The ‘loan to value’ or LTV is the ratio between how much you want to borrow and the lenders valuation of the property - so if you wanted to borrow £75,000 on a property valued at £100,000, the LTV would be 75% with a 25% deposit (£25,000)
The LTV is determined by a number of factors and we have listed the main ones below as a guide. We would strongly recommend speaking to a specialist broker if you want to apply for a mortgage or remortgage with 'bad credit'.
The main factors affecting LTV where bad credit is concerned are...
Bad Credit type
This is the type of bad credit a person has - missed payments, defaults, CCJ’s, IVA, discharged bankrupt etc
Bad credit mortgage’s allow combinations of bad credit types such as a number of missed payments, defaults & CCJ's - Baker Financial have access to all these different mortgage products.
Number of Bad Credit items
The amount of the different types of bad credit.
You could have 3 defaults and 1 CCJ, which will fit on a certain mortgage product, but if you had 1 default and 3 CCJ’s the mortgage product would probably be different.
Some lenders work of the number of bad credit items rather then the amounts such as – up to 3 CCJ’s registered rather than the CCJ’s individual or total pound (£) amount.
The pound (£) amount of the bad credit
The actual amounts in pounds (£) you owe - you could have 1x default for £3,000, 1x CCJ for £1,000 and another CCJ for £300 - some lenders work off totals (such as - up to £10,000 total CCJ’s) & some work of both number and pound amount (i.e. max 3 CCJ's not totaling more than £10,000)
When the bad credit was registered
The date bad credit items were registered on your credit file is an important factor to be considered. Some lenders view 'bad credit' registered some time ago differently than more recent 'bad credit' and may not take certain bad credit issues into account depending on when it was registered.
Your ‘status’
Your ‘status’ simply refers to your ability to prove income.
If you are employed with wage slips, on contract or self employed with certified accounts you would apply for a ‘status’ mortgage.
If you are on contract or self employed and are unable to provide satisfactory proof of income, you would apply for a ‘non status’ or ‘self cert’ mortgage
Specialist's in bad credit
You can view the number of bad credit items, when the bad credit was registered and the pound (£) amount of each individual credit item by getting hold of your credit report and letting us explain what the information on your report means in real terms.
There are other factors which determine the LTV (such as property type) - but the ones listed above relate directly to bad credit mortgage and remortgage applications.
All mortgage lenders have their own criteria for deciding how much LTV they will allow and which mortgage product has what maximum LTV, there are literally thousands of different mortgage products to choose from and getting the best available could save you a small fortune over the life of your mortgage - we would recommend speaking to a bad credit mortgage specialist.
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