High Loan-to-Value Mortgage

High Loan-to-Value Mortgage

A mortgage in which the ratio of the amount of the loan is relatively high compared to the value of the property securing it. For example, if the value of a house is $100,000 and the value of the mortgage is $98,000, the loan-to-value ratio is 98%, which is considered high. A high loan-to-value mortgage indicates high risk to the lender because, if it forecloses, it may not be able to sell the house for enough money to compensate itself for the principal plus interest of the original mortgage.
References in periodicals archive ?
"We would like the new Government to look at supporting affordable mortgages and a return to high loan-to-value mortgage products.
The state will offer guarantees totalling up to PS12 billion on PS130 billion of high loan-to-value mortgage lending.
accessible high loan-to-value mortgage market and therefore reflected relatively good comparative value, particularly to foreign investors.
David black from financial analysts defaqto says: "many borrowers with a high loan-to-value mortgage on an interest-only basis face substantially increased monthly payments if they re-mortgage.
Obviously, if you are hoping to get a high loan-to-value mortgage then the fact that lenders now take incentives into account may come as an unpleasant surprise.
It will see the state offer guarantees totalling up to PS12 billion on PS130 billion of high loan-to-value mortgage lending.
David Caught, residential sales and marketing director for English Cities Fund, says: "Large deposits are a major sticking point for first time buyers and high loan-to-value mortgage products were thin on the ground in 2010.
Another contibutor must be the type of high loan-to-value mortgage deals which were being offered by lenders in the years leading up to the collapse of the housing market.
The Help to Buy Mortgage Guarantee Scheme was designed to help lenders offer home buyers more high loan-to-value mortgages (80-95%), backed by government support.
The Welsh Government and house builders were to act as guarantors so buyers could secure high loan-to-value mortgages not otherwise be available to them.
It will lead to high loan-to-value mortgages of up to 95% using guarantees from both housebuilders and the Welsh Government.
Lenders pushed out a spate of high loan-to-value mortgages in the summer to cater for the backlogged first time buyer market, and, although they have taken time to feed through, we now are we beginning to see borrowers take them up in notable numbers."