Northern Rock deal coming to an end Jan 09 need help!!!

KLR_3

Hi,

Just wanted to see if anyone could shed some light on my mortgage dilemma! My deal with Northern Rock ends in Jan 09 I am currently paying £400 approx interest only (been on a interest only mortgage for 4 yrs now due to having children etc) My intention had always been to go repayment from Jan 09.
We sought the help from an independant mortgage advisor who advised us to stay interest only and we have been given a mortgage promise from Halifax at about 7% about £531 a month (can I get a better interset rate than this?) - still interest only! I'm so worried that because of falling house prices any equity that I thought I had (about £30k)may have now gone! Obviously because I have an interest only mortage I now owe Northern Rock £94k I bought the property for £84k, so I am going to need possibly more than 75% if the valuers don't value our property at what it was valued at in summer. We live in a very sought after area and our next door neighbours have sold theirs recently for more than expected. My partner thinks we should just ride it out with Northern Rock, we don't even know what it will go up to? I don't know whether to try and proceed with the Halifax and stay interst only again and hope that it will improve within 2 yrs? Or to just cut the ties and sell up? The only problem is I have 2 small babies? I am really panicking! Any advice would be greatly welcomed.

beecher

Realistically you're not going to be valued at what it was valued in the summer - have a look at nethouseprices to find out what recent sales there have been in the area. With 95% deals disappearing fast I think you'll find it hard to remortgage even if you're not in negative equity. The Northern Rock SVR can't be that much more than 7% anyway.

You need to find a way of repaying some of the mortgage at some point in the future - I'd advise going over to the Debt Wannabee forum and getting advice on how to cut back substantially in order to do so. Getting rid of sky/car/taking on a 2nd job might be possibilities?

lynnexxxo

I believe the Northern rock SVR is currently 7.49% so if the halifax are charging a fee for the 7% product it may work out cheaper to stay on the NR standard rate. This will still be much more than you are paying now so you'll have to budget for an increase.

As beecher suggests these forums are full of advice on how to cut back if you are struggling. Good luck

I,_Brian

7.5% sounds awfully high - have you tried finding a better rate? I'm thinking of somewhere like First Direct offset base rate tracker, which has a rate of around 5.9% on capital repayment:
http://www.firstdirect.com/mortgages/offset-base-rate-tracker.shtml

grogdog

as already mentioned the ltv could b the issue in moving to another provider, nr should offer you another deal to stay with them less than what it would cost to move to halifax. also re changing to repayment why not overpay what you can afford each month or when you can and stay on interest only until your circumstances change.

herbiesjp

grogdog wrote: »

nr should offer you another deal to stay with them less than what it would cost to move to halifax. .

NR are not offering existing clients any new deals apart from SVR currently

beecher

grogdog wrote: »

as already mentioned the ltv could b the issue in moving to another provider, nr should offer you another deal to stay with them less than what it would cost to move to halifax. also re changing to repayment why not overpay what you can afford each month or when you can and stay on interest only until your circumstances change.

I thought NR weren't offering any deals to existing customers and that moving to the SVR was the only option available?