Help with Northern Rock Mortgage

KerryD707

Wondering if anyone could give me some advice, currently with NR with a mortgage of £125K plus £6k tie in fee, of 5.49% deal tied in for 10years seemed ok at the time cause hubby just left navy and wanted to know exactly where we stood with finances. Paying £808 monthly mortage with things today went on interest only of £585a month which for us is loads better but really dont know how long can stay on this,cuase really carnt afford the £808 , have 3 children house probably in negative equity, am i best staying on interest for a couple of years to ride out this recession or cut my losses and sell but then ill still owe, does any body know what options are available.

silvercar

If you wanted to sell you would have to find enough money to clear the mortgage, including the tie in fee. If you are in negative equity that means finding another pot of cash. can you do this as well as find a rental deposit?

happybroker

you don't say if your own finances have changed, if they haven't then you should still be ok on repayment.

It could be worth (and i know this is easy for me to say) having a look at other areas of your budget for places to tighten up and stickiing with your original plan on the mortgage.

KerryD707

thanks tries looking at budget but carnt really tighten up, cause running 2 cars got threee kids, petrol foodd the usually even trying to save is hard,
what impact would it have if i stayed on interest only for next 3 - 4 years

lynnexxxo

Well simply on interest only to will not have paid any the capital off, meaning that the amount you owe will still be the same.

However maybe by that time maybe house prices will have started to rise, or you might have a better job/pay rise/ decrease in childcare expenses so you could start to pay more.

If the options are to try and sell now leaving you in with a huge bill to pay for the ngeative equity and tie in fee and find a suitable rental place for your family or go interest only for a few years and see what the situation is them, I think you'd be mad to consider the former (unless you hate the house/area/need to move for work etc).

dimbo61

I dont think NR will let you change to IO as you think that your home is in Negative equity and unless you put down a big deposit you could well be right.
You could get a couple of local estate agents out to value your home but remember they want the buisness at the moment so may overprice the house.
The 5 year deal is not much better than current 5 year deals being offered to people with 40/50% equity!
You will have to carry on paying the mortgage and try to keep a roof over your head.
Look on Martins website at different ways to save money and see you are getting best valus for your money on everything you spend money on.
I hope thinks get better for you and your family
GOOD LUCK

happybroker

leaving things on IO for 3 or 4 years would mean that you will either haver to pay the loan off over a longer period of time which increases the overall cost or pay it off over the existing term less the 3 or 4 years you have had IO which will increase your monthly payments.