Mortage Advise

ama2008

Hi

Me and My girlfriend purchased our house last year in july, 07. The house cost 90,500. Due to old debts ie loans, credit cards, etc and also extra money to improve the house we borrowed more than this amount, in total it was £103,000. I have been paying the mortage since at £618, the mortage is over 35 years and so all in all everything is pretty stretched. The lender is Northern Rock. This deal was fixed over 18 months, and this runs out december of this year. They sent us a letter this month to say they could no longer offer us a new deal on the mortgage and maybe be best for us to look elsewhere, if we remained with them the price would go up by £707.

In all honesty I find it hard to undertstand the housing market, I recently had a financial adviser round who said we are pretty much stuck with Northern Rock on the higher rate.

Is there anything anyone can suggest avoiding the obvious winning the lottery?

In my eyes given that the public bailed out Northern Rock it seems unfair I am now paying out even more out. If the greater amount resulted in more being payed off my house then fair enough, im guessing though this is just more interest being charged!?

beecher

How much have you borrowed as a mortgage, and how much is the loan? Also what rate were you paying as £618 seems quite high when it is over 35 years.

To be honest, I think you're likely to be in negative equity even just on the mortgage part - and it wouldn't matter which bank you were with, you'd be put on the Standard Variable Rate. It isn't really 'unfair' as such - just bad luck that you bought in a huge housing bubble which has now burst.

In the short term you could go interest only. A better option would maybe be to go onto the Debt Free site and cut back your spending as much as possible - ditch sky etc and try to save your way out of negative equity.