spiral
Member of DD Central
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Post by spiral on Nov 5, 2016 7:57:53 GMT
All things being equal, would I be right in thinking that a 70% LTV property has a better buffer on SS than FS because SS retain the fees upfront whereas FS have them repaid at the end of the loan?
I'm thinking that a £700K loan on an asset of £1m value with 50K of fees and interest only requires a total of £700K repaying on SS (because all the fees/interest is withheld and they are therefore advanced £650K) whereas on FS they are advanced £700K and repay £750K or am I misunderstanding how 1 or both platforms report their LTV?
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Post by doorway on Nov 5, 2016 17:31:05 GMT
I am thinking you are correct. Agree that is is an intertestion question.
I suggest you re-post the question on the SS board.
I think there will be more answers there.
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mikes1531
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Post by mikes1531 on Nov 5, 2016 19:09:29 GMT
All things being equal, would I be right in thinking that a 70% LTV property has a better buffer on SS than FS because SS retain the fees upfront whereas FS have them repaid at the end of the loan? I'm thinking that a £700K loan on an asset of £1m value with 50K of fees and interest only requires a total of £700K repaying on SS (because all the fees/interest is withheld and they are therefore advanced £650K) whereas on FS they are advanced £700K and repay £750K or am I misunderstanding how 1 or both platforms report their LTV? AIUI, you are correct. In both cases, however, the reality is a bit worse because if the borrower does not repay the property can't be sold instantly, so a few months probably will elapse before the sale proceeds arrive. Which means further interest and fees will have accrued and that requires even more proceeds to repay everyone fully.
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stevio
Member of DD Central
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Post by stevio on Nov 5, 2016 20:54:21 GMT
+SS PF
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