LTV clause and Redemption figure: What to do?

Ado75

We are thinking about trading up and are about to begin the process of looking for a Redemption figure for our NIB LTV-tracker mortgage. However, some concerns have come to the fore. There is a clause in the loan agreement which states something along the lines that if the LTV increases above 80% they reserve right to convert to a home loan rate. Given that we are bordering on negative equity we are worried that a request for a redemption figure may trigger the bank to seek a house valuation and they'll use it to screw us over and invoke the clause. Has anyone any information on this?

killers1

Ado75 wrote: »

We are thinking about trading up and are about to begin the process of looking for a Redemption figure for our NIB LTV-tracker mortgage. However, some concerns have come to the fore. There is a clause in the loan agreement which states something along the lines that if the LTV increases above 80% they reserve right to convert to a home loan rate. Given that we are bordering on negative equity we are worried that a request for a redemption figure may trigger the bank to seek a house valuation and they'll use it to screw us over and invoke the clause. Has anyone any information on this?

I think you are worrying unduly. The bank do not need a valuation report to give you a redemption figure (nor will they look for one). The ltv tracker was based on your ltv at the time of purchase, they are not going to start chasing a performing loan for further interest on a property which may be sold shortly....They've enough non-performing loans to be worried about at the moment so you'll be fine. There's no problem requesting a redemption figure without any mention of the property value. Then if you put it up for sale hopefully you'll get enough to redeem to mortgage or else you may need to put some savings towards it to cover the difference.