Borrowers that took 100 per cent mortgages shouldn't 'panic'

Posted: 11 Jun 2008 13:07:12 GMT

Homeowners with 100 per cent mortgages should get estimates from different estate agents to establish the current value of their property before being concerned about negative equity.

Homeowners with 100 per cent mortgages should get estimates from different estate agents to establish the current value of their property before being concerned about negative equity.

That is according to Pauline McCallion, editor of Your Mortgage magazine, who has said that it is important to remember that house price falls are regional.

House values "vary widely" depending on the area and even borrowers that have a 100 per cent mortgage may have "no problem" getting a new deal if they have already paid off part of their property.

Ms McCallion explained that borrowers that took a mortgage out a few years ago: "could have repaid enough to bring their loan-to-value (LTV) down to 95 per cent or less over the time they have had their mortgage, in which case they should have no problem accessing a new mortgage deal".

Concerned borrowers should, Ms McCallion said, work out their options and speak to their lender or financial advisor before making any decisions.

The advice comes in the wake of the latest Council of Mortgage Lenders (CML) figures which show there was a five per cent increase in gross mortgage lending from April to March.

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