Held to ransom by Northern Rock !!!!

adski1

My mortgage deal ran out in July 2008. I am in a bit of a pickle with debts, and started a 5 year IVA in august. I changed my mortage to an interest only to bring down the payments so that i could afford an IVA instead of going down the bankrupt route. I was told that the interest only payments would be reviewed by NR in november. Can NR force me to go back to a repayment mortgage? at the moment if i was to go onto a repayment mortgage , my payments would increase by over £100 a month, causing me to fault on my IVA and result in bankrupcy eventually.
I know i cannot get a good deal with NR , but as i am in negative equity i have no way of moving my mortgage!!! what are my options?
My ideal would be to get NR to let me carry on with the interest only mortgage, but i am not sure if they will make me go back onto repayment.
I would love my mortage to be fixed for the next 5 years so that i can continue my IVA payments with no problems, but as NR are not offering any deals for existing customers and i am unable to move elsware because of my neg equity i am stuck!!!!!

opinions4u

Most people go for an IVA to protect equity in their home.

You seem to be in a position where you are having to pay your IVA commitments and mortgage interest to keep a house that is falling in value.

If you were declared bankrupt you could walk away from all the debts and leave Northern Rock with the problem.

If you could be rehoused this may actually be an option. Not one that I'd normally suggest, but one that may be right for your circumstances. Get full professional advice before taking such a step though. Make sure you know the benefits and the consequences.

In answer to your question, yes, they could require you to revert to repayment mortgage. Given falling house values, it would protect them more if your debt was falling. You need to retain their goodwill if you wish to remain on interest only.

adski1

But can NR force me to go back to repayment ?
I am coping well with an IVA and my current mortgage payments ( interest only ) i dont want to go bankrupt and loose my family home.
What NR is doing to its existing customers is absolutely disgusting, thay are almost forcing them to go bankrupt by not offering any deals , if like me being in neg equity it is impossible to move elswhere , so you have to pay their only rate available.

opinions4u

My last paragraph answered your question:

"In answer to your question, yes, they could require you to revert to repayment mortgage. Given falling house values, it would protect them more if your debt was falling. You need to retain their goodwill if you wish to remain on interest only."

It's not that many years ago that lenders only had one variable interest rate for all customers. We have been spoiled in the last 15 years.

adski1

sorry yes... how silly of me its my fault NR went tits up, and has made them withdraw their deals to existing customers like me who have never defaulted.
Silly me, for a minute i thought this forum was for advice , not for someone to have a go at me!

opinions4u

adski1 wrote: »

sorry yes... how silly of me its my fault NR went tits up, and has made them withdraw their deals to existing customers like me who have never defaulted.
Silly me, for a minute i thought this forum was for advice , not for someone to have a go at me!

If you can explain in what way I have had a go at you, I will apologise.

I have answered your question, suggested an alternative course of action that may or may not be right for you and tried to be as helpful as possible.

How have I managed to offend you?

silvercar

You need proper advice. From your posts you seem to think that (a) going bankrupt will mean you lose your home and that (b) an IVA benefits you in some way.

Unless your job is one that would be impossible to do as a bankrupt, you really should consider your options carefully.

In negative equity you would be able to buy back the official receiver's interest in your property for £1 + legal costs. Did you know this? All your unsecured debts would be removed and you would be more likely to manage your mortgage payments. Bankruptcy lasts for 1 year and appears on your credit rating for 5 years. An IVA lasts 5 years and again is a big black mark on your credit rating. Normally people enter an IVA either to protect their career or to protect the equity in their home. If neither reason applies to you, then I would question whether an IVA is appropriate. Have you teken impartial advice, or have you been advised by a company interested in selling you an IVA?

Griptool

Silly me, for a minute i thought this forum was for advice , not for someone to have a go at me!

Seems to me like opinions4u was giving good advice, if he was having a go he may well have said

"You're a witless muppet who deserves no sympathy for over borrowing and expecting money lenders to go easy on you."

Not that I would be so blunt:rolleyes:

arkie

silvercar wrote: »

You need proper advice. From your posts you seem to think that (a) going bankrupt will mean you lose your home and that (b) an IVA benefits you in some way.

Unless your job is one that would be impossible to do as a bankrupt, you really should consider your options carefully.

In negative equity you would be able to buy back the official receiver's interest in your property for £1 + legal costs. Did you know this? All your unsecured debts would be removed and you would be more likely to manage your mortgage payments. Bankruptcy lasts for 1 year and appears on your credit rating for 5 years. An IVA lasts 5 years and again is a big black mark on your credit rating. Normally people enter an IVA either to protect their career or to protect the equity in their home. If neither reason applies to you, then I would question whether an IVA is appropriate. Have you teken impartial advice, or have you been advised by a company interested in selling you an IVA?

some vey good points raised here,
IMO you should have gone bankrupt unless you occupation would be effected , normally this is only applicable to Financial Services industry or people who could be in a position to be financially turned if you know what i mean, (bribed, influenced)
A normal IVA requires a charge to be put onto your property if you are a home owner, this is noramlly an equitable charge, if you have no equity as you didnt when you took out the IVA you should have gone bankrupt. It is not too late to bankrupt , dont pay your IVA , you then could divert the money you are paying into your mortgage and reduce the balance. You will not lose your home.
you have no doubt been sold an IVA by one of the companies that advertise in the press.

_Andy_

adski1 wrote: »

But can NR force me to go back to repayment ?
I am coping well with an IVA and my current mortgage payments ( interest only ) i dont want to go bankrupt and loose my family home.
What NR is doing to its existing customers is absolutely disgusting, thay are almost forcing them to go bankrupt by not offering any deals , if like me being in neg equity it is impossible to move elswhere , so you have to pay their only rate available.

No lender is obliged or required to offer 'deals' once a fixed/discounted period has ended.

The mortgage offer you agreed to would have detailed what would happen after the fixed rate ended and it was your responsiblity to have budgeted for it.

Additionally by going interest only to start with you did yourself no favours in terms of risking negative equity.

It's a frustrating situation you have but it's no good blaming your mortgage lender for it.

beecher

To be fair, it wouldn't matter which bank you were with - as you're in negative equity, no-one would give you a new deal. This is the reality of a housing buble - when it bursts (and they always do) people are stuck in negative equity.