The Abolition Of 100% LTV Mortgages And Remortgages Has Been A Good Thing.
Remortgages and mortgages are both types of home loans.
Home loans as the name suggests are clearly loans that have a relationship to a home or house and when talking about mortgages and remortgages the houses in question must be bought property.
If someone wants a mortgage to buy his first property or he is already a homeowner who wants to move to a property in a different area of the country or to buy a bigger or better property or he requires a remortgage to release equity for any number of purposes the property involved must have equity.
Equity is the difference between the value of any particular property and the mortgage that is secured on it.
This means that to work out the available equity on a 300,000 property on which there is a mortgage of 180,000 secured, the equity is 120,000.
The Northern Rock Building Society even advanced both mortgages and remortgages at 125% of equity meaning that the home buyer or the remortgage applicant could obtain remortgages and mortgages at 25% more than the property was valued.
That meant that if a property was valued at 100,000 in the days before the credit crunch mortgages and remortgages were available up to 125,000 on that particular property.
Now things in the mortgage nd remortgage market are very different and it is impossible to get a 100% mortgage or remortgage.
Now there is no such thing as a 100% remortgage or mortgage, and therefore the would be borrower must have a deposit when mortgaging or remortgaging.
This is very sensible as it gives the borrower the necessity of taking the mortgage or remortgage seriously as he has money of his own invested and the whole borrowings on his property are not simply money belonging to the bank or building society.
This all resulted not only in the lax lending practices of the mortgage lenders but also to the reckless borrowing of the borrowers who having risked none of their own money they did not have the impetus to make certain that they really could afford to buy that big house.
If things went wrong they could simply hand the keys to the lender and walk away without losing a single penny of their own money.
The availability of 100% and even 125% plans that used to be available partly lead to spates of repossessions as people were not compelled to meet repayments.
Home loans as the name suggests are clearly loans that have a relationship to a home or house and when talking about mortgages and remortgages the houses in question must be bought property.
If someone wants a mortgage to buy his first property or he is already a homeowner who wants to move to a property in a different area of the country or to buy a bigger or better property or he requires a remortgage to release equity for any number of purposes the property involved must have equity.
Equity is the difference between the value of any particular property and the mortgage that is secured on it.
This means that to work out the available equity on a 300,000 property on which there is a mortgage of 180,000 secured, the equity is 120,000.
The Northern Rock Building Society even advanced both mortgages and remortgages at 125% of equity meaning that the home buyer or the remortgage applicant could obtain remortgages and mortgages at 25% more than the property was valued.
That meant that if a property was valued at 100,000 in the days before the credit crunch mortgages and remortgages were available up to 125,000 on that particular property.
Now things in the mortgage nd remortgage market are very different and it is impossible to get a 100% mortgage or remortgage.
Now there is no such thing as a 100% remortgage or mortgage, and therefore the would be borrower must have a deposit when mortgaging or remortgaging.
This is very sensible as it gives the borrower the necessity of taking the mortgage or remortgage seriously as he has money of his own invested and the whole borrowings on his property are not simply money belonging to the bank or building society.
This all resulted not only in the lax lending practices of the mortgage lenders but also to the reckless borrowing of the borrowers who having risked none of their own money they did not have the impetus to make certain that they really could afford to buy that big house.
If things went wrong they could simply hand the keys to the lender and walk away without losing a single penny of their own money.
The availability of 100% and even 125% plans that used to be available partly lead to spates of repossessions as people were not compelled to meet repayments.
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