Mortgage loans to the value of homes taken out
13/02/09
The number of homeowners who have taken out mortgage loans which are equal to the value of their homes and in some cases more have increased a significant amount. This could cause problems for many homeowners as they could be faced with a situation where their home is in negative equity as a result of the value of the mortgage loan borrowed being higher than what the property is worth.
As many as over twenty per-cent of homeowners who were asked in a survey by Fairinvestment.co.uk admitted that they had borrowed up to ninety per-cent of the value of their home.
“Our statistics show that, although the days of high LTVs are now in the past, there are a number of mortgage holders out there who did borrow more than 90 per cent of their home's value,” commented Sharon Bratley, chartered financial planner at Fairinvestment.co.uk.
She continued, “These homeowners could now be at risk of negative equity as house prices continue to come down, particularly if they bought their house within the last three years.”
