Brendan Burgess
Founder
- Messages
- 52,270
Here is the wording from the consultation document
and here is the wording from the definitions
Is the following example correct?
Mortgage| € 300k
House worth| € 250k
Negative equity |€50k
(Assume I meet the Loan to Income restrictions)
I want to buy a house for €400k
house value|€400k
Max mortgage - 80%|€320k
Add NE|€50k
Total mortgage|€370k
LTV|92.5%
This is good for the lender, NE of €50k have been changed into positive equity of €30k.
3. Residual debt from negative equity mortgages: Credit granted for the purpose of discharging residual debt under a negative equity mortgage is excluded from the calculation of the LTV. The LTV limit will only apply to the loan secured on the new property, before the residual debt is applied. The residual debt which can be exempted only applies if the property sold is a primary dwelling.
and here is the wording from the definitions
'Loan’ means an amount advanced or a total sum of amounts advanced to a borrower secured on an individual residential property. For the purposes of calculating loan to value only, the definition excludes any residual debt under a negative equity mortgage.
Is the following example correct?
House worth| € 250k
Negative equity |€50k
(Assume I meet the Loan to Income restrictions)
I want to buy a house for €400k
Max mortgage - 80%|€320k
Add NE|€50k
Total mortgage|€370k
LTV|92.5%
This is good for the lender, NE of €50k have been changed into positive equity of €30k.