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Northern Rock End of Mortgaged Deal (Merged Threads)
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Sorry, but I'd beg to differ. People who were allowed to borrow far higher multiples of income, and far higher LTVs, than any other lender would offer might have realised, if they had sat down and thought about it, that they were an unusual credit risk.No one who signed up for a Northern Rock mortgage prior to 2007 were under the impression that they were buying into a sub prime lender.
If they had been standard credit risks, there would have been dozens of lenders falling over themselves to lend them 125% of their property value on 4 times their joint income. Strangely enough, there were not.
Regarding your later post, it is not necessary to be sub prime to be a higher than normal credit risk. I'm not (particularly) arguing that Together mortgages, for example, were sub prime. But they are without a doubt higher than standard credit risks, and they without a doubt impose a higher capital requirement on the lender - this applies to any lending over 80% LTV, in case you aren't aware of that (and the capital requirement per £ of lending over 80% is over twice that for <80%).
So, there is absolutely and without any doubt a justification for charging a higher than standard SVR to customers who, on average, are more risky and impose a higher capital requirement - which at the end of the day has to be paid for.0 -
Hi All,
Can anyone enlighten me as to how they work out what rate they charge for the unsecured loan on a together mortgage,if you remortgage and take your Secured part to another provider.I've read on here anything from 5-10% extra which is a little vague.I cannot find an answer in my mortgage documents.
Many thanks in advance.
James0 -
It's in the paperwork, but call them and check, they can even tell you what your payment will rise to. I've done the same today.0
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Err that's why I asked I don't have it , what did they tell you ?
James0 -
englishjames wrote: »Err that's why I asked I don't have it , what did they tell you ? James
It has not been the same for all borrowers over the years, but it will be between +5&7% of what your currently paying....It would have been documented in mortgage offer and not KFI0 -
MarkyMarkD wrote: »People who were allowed to borrow far higher multiples of income, and far higher LTVs, than any other lender would offer might have realised, if they had sat down and thought about it, that they were an unusual credit risk.
They offered me 7 x my salary (which needless to say I didn't take)
Yesterday, however, we remortgaged and have escaped them, thank God.
Huge best wishes to everyone still with NR, and hoping that you will be treated better than you think you will.Please do not confuse me with other gratefulsforhelp. x0 -
gratefulforhelp wrote: »They offered me 7 x my salary (which needless to say I didn't take).
When I was 21 and having appointments with financial people, we were offered upto 200k. Crazy.English by birth. GEORDIE by the grace of God.0 -
MarkyMarkD wrote: »Sorry, but I'd beg to differ. People who were allowed to borrow far higher multiples of income, and far higher LTVs, than any other lender would offer might have realised, if they had sat down and thought about it, that they were an unusual credit risk.
Sorry but I'd beg to differ. As a first time buyer with NR I secured a mortgage of £105,000 with no deposit. £5,000 of which as an unsecured loan. That did not seem particularly risky to me. The mortgage was totally and utterly affordable to me and still is. The point being that I have now been forced into being with essentially a sub prime lender through no fault of my own. Therefore I can be potentially be forced to pay a sub prime SVR. There will be thousands of people in the same situation as me. With an affordable mortgage forced to pay a sub prime SVR because of this lenders incompetence and for no fault of their own. It's a bloody scandal.
I would have expected to have been made aware of the apparent risks by my advisor or even financially knowledgeable colleagues, family and friends but no one batted an eye. IT WAS STANDARD PRACTICE in 2007. Why did you expect me as a consumer and as a novice first time buyer to question standard practice from a high street lender? If it was so risky then surely the nanny state government would have put a stop to it. Oh no, it turns out that even the government didn't realise the risks. That gives a novice first time buyer a real good chance of realising them doesn't it? Hindsight is a wonderful thing. Especially for people like you who can pretend to have known it all at the time.
My Mother has had her mortgage with NR for the past 20 years with little problems.
In fact if anything they came highly reccomended by everyone I spoke to.
In that situation can you please explain to me how I was supposed to realise that I was getting a mortgage from a risky lender?
As far as I was concerned I was getting a mortgage from a high street lender with high street lender SVR promises.
Low and behold NR go and make an !!!! of it and then expect the government and its customers to bail them out.
I will avoid NR like the plauge in the future and would advise everyone else to do the same.0 -
Your broker, as you say you used one, surely SHOULD have explained to you that it was not standard practice to be able to borrow 100% (or 105% - not sure from your post) of the value of your property, and that there were only in 2007 about 3 lenders doing this sort of lending (NR, B&B and A&L if I recall correctly).
He should also have explained the extremely increased risk of ending up in negative equity as a result of borrowing a very high percentage of a property's value (indeed, maybe even starting in negative equity) and that this could have led you to end up with a debt which you could not refinance elsewhere, if you had to move (say for work reasons) at a time when the property's value had fallen compared to the size of the debt.
I don't expect you to have questioned all this, but the job of a proper broker - and a proper solicitor for that matter - would be to go through such issues with you. That's what they get their money for!
I'm not pretending to have known it all at the time. I do know it, though, from the previous housing market crash - which ended up with me losing £6k on my first property, and having to borrow 100% of the value of my second property when I got married, due to having all my equity destroyed by the falling housing market. The difference is that our broker informed us, correctly, that 100% mortgages - even then - were hard to get, and that we'd have to pay through the nose for it ... which we did.
I'm sorry that the professionals involved in your purchase seem to have all done a useless job, but it doesn't negate the fact that the mortgage you still have is still higher risk for the lender than a conventional, <90% LTV, mortgage.0 -
The mortgage was totally and utterly affordable to me and still is
Share with us your secret in this global economy, owning a property in a country running a massive deficit:
What redundancy proof job do you do?
What is your secret for an illness & disease free everlasting life?
(OK I'll be fair and assume you are not running an infinity mortgage - like I did in the 1970's)
How old will you be when you pay off your 100K plus mortgage?0
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