j
Member of DD Central
Penguins are very misunderstood!
Posts: 2,188 
Likes: 540
|
Post by j on Jul 22, 2014 9:31:42 GMT
9 months, 10% pa, 70% ltc
|
|
|
|
Post by yorkshireman on Jul 22, 2014 11:12:31 GMT
How do we arrive at 70% LTV?
The loan is for £180k therefore at that rate the security value should be £257143 or thereabouts?
If you work on the valuation of £900k never mind what Foxtons say, with a prior charge of £450k the security is nominally £450k, so where do we get 70% LTV?
|
|
|
|
Post by Jack Barlow on Jul 22, 2014 11:14:53 GMT
(180 + 450 ) / 900 = 70%
This is the standard method for calculating LTVs for second charges – the LTV represents the minimum value of the asset at which the second charge provides 100% security cover for the loan.
|
|
|
|
Post by yorkshireman on Jul 22, 2014 11:32:03 GMT
(180 + 450 ) / 900 = 70% This is the standard method for calculating LTVs for second charges – the LTV represents the minimum value of the asset at which the second charge provides 100% security cover for the loan. I’d forgotten that is the method for calculating LTV on second charges, thanks for the info.
|
|
|
|
Post by Jack Barlow on Jul 22, 2014 11:45:30 GMT
I think AC should consider always showing the LTV calculation in the credit report, then there's no scope for confusion.
|
|
j
Member of DD Central
Penguins are very misunderstood!
Posts: 2,188
Likes: 540
|
Post by j on Jul 22, 2014 13:34:30 GMT
Not sure this one will be for me. No issue with security but, imagine a 6-8 week timeline till drawdown, minimum 3 months charge @ 0.83% pm, then possibly repayment rather than full 9 months! Effectively paying just under 6% pa in real terms (which is not bad compared to banks) but I might wait & pick some on AM. There should have been a much longer minimum charge period (6 mths) or a guaranteed very quick draw down.
|
|
merlin
Minor shareholder in Assetz and many other companies.
Posts: 902
Likes: 302
|
Post by merlin on Jul 22, 2014 14:07:29 GMT
Not sure this one will be for me. No issue with security but, imagine a 6-8 week timeline till drawdown, minimum 3 months charge @ 0.83% pm, then possibly repayment rather than full 9 months! Effectively paying just under 6% pa in real terms (which is not bad compared to banks) but I might wait & pick some on AM. There should have been a much longer minimum charge period (6 mths) or a guaranteed very quick draw down. j with you all the way. In fact reference a previous conversation on tax, I wont touch any loans in single digits!
|
|
spyrogyra
Member of DD Central
Posts: 386
Likes: 148
|
Post by spyrogyra on Jul 22, 2014 16:35:59 GMT
I won't bet on the SM with such a small loan.
|
|
|
|
Post by gingergent on Jul 22, 2014 17:11:03 GMT
9 months, 10% pa, 70% ltc I've not read the docs yet, but the headline seems a bit confused about the rate. The title says 10% pa, but the summary says "Fee: 10%" (not "Rate: 10%").
|
|
j
Member of DD Central
Penguins are very misunderstood!
Posts: 2,188
Likes: 540
|
Post by j on Jul 22, 2014 17:19:51 GMT
I won't bet on the SM with such a small loan. , many loans of this size have actually needed underwriting, so a very decent chance you can pick units in AM
|
|
j
Member of DD Central
Penguins are very misunderstood!
Posts: 2,188
Likes: 540
|
Post by j on Jul 22, 2014 17:21:40 GMT
9 months, 10% pa, 70% ltc I've not read the docs yet, but the headline seems a bit confused about the rate. The title says 10% pa, but the summary says "Fee: 10%" (not "Rate: 10%"). , my understanding is fee is the equivalent of 10% pa but for a max 9 month period. It works out at roughly 0.833% per month.
|
|
mikes1531
Member of DD Central
Posts: 6,453
Likes: 2,320
|
Post by mikes1531 on Jul 22, 2014 17:25:56 GMT
I won't bet on the SM with such a small loan. Why not? The Wor* P* I* auction running currently is not that different, is it?. And it's been open for ten days and has raised just £64k of bids. The Lon*** loan is a bit smaller, so £64k would be 36% funded instead of the 19% showing for WPI, but it wouldn't surprise me if both require underwriting to get going, which would mean units appearing on the Aftermarket once the loans draw down. No doubt some of the WPI bids are shadow bids, and that suggests to me that lenders without shadow bidding privileges aren't eager to bid because of the 'dead' time waiting for drawdown. AC have said they're trying to minimise dead time, but it still appears to be a big issue. I can't help wondering whether this issue will be addressed in the upcoming system changes, possibly by delaying auctions until drawdown is imminent. By doing that AC could have shorter auctions and possibly even dispense with shadow bidding completely, though it would require arranging underwriting for every loan. But they're practically doing that now. After all, when was the last time they brought a loan forward and had it fail for lack of support from lenders? An important thing they'd lose if they went down that road, however, is the crowd duedil via the Q&A. IIRC, in the past there have been loans where inadequate answers to important questions raised by lenders have caused AC to withdraw a loan offer. It's impossible to know whether AC would have turned up the critical info that caused them to withdraw their offer if the crowd hadn't been involved.
|
|
mikes1531
Member of DD Central
Posts: 6,453
Likes: 2,320
|
Post by mikes1531 on Jul 22, 2014 17:32:50 GMT
I've not read the docs yet, but the headline seems a bit confused about the rate. The title says 10% pa, but the summary says "Fee: 10%" (not "Rate: 10%"). , my understanding is fee is the equivalent of 10% pa but for a max 9 month period. It works out at roughly 0.833% per month. But loans like Ep****, Ha*****, and Ip*****, which are six-month loans at 1%/month, say "Fee: 6%". On that basis, I'd expect a 9-month 10% p.a. loan to say "Fee: 7.5%". I wonder if the confusing wording might be the result of a change in how compounding is dealt with.
|
|
|
|
Post by chris on Jul 22, 2014 18:10:27 GMT
gingergent, my understanding is fee is the equivalent of 10% pa but for a max 9 month period. It works out at roughly 0.833% per month. But loans like Ep****, Ha*****, and Ip*****, which are six-month loans at 1%/month, say "Fee: 6%". On that basis, I'd expect a 9-month 10% p.a. loan to say "Fee: 7.5%". I wonder if the confusing wording might be the result of a change in how compounding is dealt with. If it says fee then it means you'll earn that much interest over the term. A 10% fee on a 9 month period is roughly 13.33% pa. The title text is manually set and will hopefully soon be shrunk to a much shorter string without all the duplicate information. Edit: The use of fees is on all loans with a less than 12 month term.
|
|
andy2001
Member of DD Central
Posts: 361
Likes: 34
|
Post by andy2001 on Jul 22, 2014 18:27:51 GMT
But loans like Ep****, Ha*****, and Ip*****, which are six-month loans at 1%/month, say "Fee: 6%". On that basis, I'd expect a 9-month 10% p.a. loan to say "Fee: 7.5%". I wonder if the confusing wording might be the result of a change in how compounding is dealt with. If it says fee then it means you'll earn that much interest over the term. A 10% fee on a 9 month period is roughly 13.33% pa. The title text is manually set and will hopefully soon be shrunk to a much shorter string without all the duplicate information. Edit: The use of fees is on all loans with a less than 12 month term. The credit reports says "10% per annum"
|
|
