The Abolition Of 100% LTV Mortgages And Remortgages Has Been A Good Thing.

There are all forms of loans, one group of which is the group known as home loans of which both mortgages and remortgages are members.

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.

For those uncertain about what equity means, all it means in simple lay mans terms is the amount left when the mortgage balance on any particular property is deducted from what the property is worth.

An example of this would be that on a property with a mortgage balance of 180,000 and a value of 230,000 the equity margin would therefore be 50,000.

Before the recession mortgages and remortgages were out there at up to to 100% of what the property was in fact worth.

There was even the availability of the 125% mortgage and remortgage from the Northern Rock Building Society which in effect meant that mortgages and remortgages were available on properties on which there was no equity whatsoever.

On this plan if a property was worth 2000,000, 50,000 could be added to this allowing mortgages and remortgages to be forwarded.

The 125% is long gone and there are no mortgage lenders left who will even grant a 100% mortgage product meaning that a prospective mortgage or remortgage applicant now requires a deposit.

This is a good thing as the homeowner now requires to put some of his own hard earned cash into his property and is no longer living in a house that in reality he does not own a single brick unlike in the past.

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.

Therefore we should shed no tears regarding the passing of these high LTV mortgages and remortgages.

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