sold house - mortgage advice please???

emma2009_2

just wondered if anyone had any words of advice please as we have sold and want to get a cheaper mortgage...sorry if its a bit long winded.

we bought a house for 100k, with a northern rock together mortgage of £103k (95k mortgage, 8k unsecured loan), with 33 years left, and now a monthly payment of £510.

we have now sold our house for £116,000. plus we have £3000 savings. so with legal fees etc taken off, i reckon we have got about 15k left. (we only have a matter of weeks before completion on our house, it was a short, closed chain)

we want to buy a cheaper house, maybe one that requires modernisation again or a repossession. i have seen one i like which is £80,000. so i have looked at the following options-

1) stay with northern rock, port mortgage. i have spoken to them and they have said we wud probably pass as we have good credit history, and as we are reducing our mortgage. they said they cold offer us an 87% LTV mortgage, so we would require a 13% deposit, which based on the above house would be £10,400. this would give us a monthly payment of around £350, and £5000 to save. (obviosuly there wud be some charges for porting etc.)

2) the repossession that we like for £80,000 is up for sale with the halifax. when i went to give my offer they gave us a mortgage promise and used that to make the offer with. they wud require a 15% deposit, which would be 12k, this would give us a monthly payment of £330 leaving us with around £3000 to save (there is a £995 fee for this mortgage).

3) hsbc - offer a 90% mortgage, so would only require 8k, but as i am still within my probationary period at work they were not prepared to lend us the money

basically, i wondered if anyone could advise what we would be best doing. Are northern rock safe enough to stay with, or should i be taking my money and running from them? do we have a better chance of having our offer accepted on the repo as it is being sold by halifax and we wud be taking our mortgage thru them also?

or would you take the money and move back home for a short while, and effectively become first time buyers again and wait for something to come up. or even consider shared ownership until we were in a better position later...


aaaaaaaaaaaaaaarrrrrrrrrrrgggggggggggggghhhhhhhhhhhhh so stressed:mad::mad::mad::mad::mad:

picardygirl

Just to clarify you are currently with Northern Rock with 33 years left to run, are you out of any tied in/fixed rate period?

JustJewels

Hi Emma2009

I'm sure an experienced broker will be along with a reply soon.
I just wanted to say, just because you currently have a mortgage with Northern Rock, this does NOT tie you to them in any way (apart from the convenience of being able to port)

Equally, I don't believe that just because Halifax are the agents for the repo, doesn't mean that they'll only want a Halifax mortgagee! The seller wants the highest price possible, full stop!

I'm sure you should treat this just like any other financial transaction, i.e. shop around, get the best deal for yourself! Go to a fee free broker (like L&C who MSE approve of, get them to search the whole market. There might be an even better deal out there. If not, at least you'll know you checked. It only takes a phone call of about 20 mins.

Hope that helps!

JJ

JustJewels

Picardy girl raises a valid point - will NR be charging you any fees to get out of the existing loan (early repayment charges)?

Cazza

A large part of the decision will depend on whether you have redemption penalties with Northern Rock. Definitely book an appointment with an independent, fee free, whole of market broker and see what they suggest.

picardygirl

If there are early repayment charges, we ported our current product over to a new property (NR mortgage), the fee was £250, that was 3 years ago - but we sold and purchased our new house at the same time, not sure what NR's porting over conditions are! The OP states they've sold, but not actually bought anywhere yet

emma2009_2

as i am no longer within my fixed period, i dont have any early repayment charges if i were to leave nr

picardygirl

ok so you dont have any early repayment charges, so the next question would be to NR, can they "hold" an existing paid off mortgage til you find another one. You say your sale is close to completion, yet you've not started proceedings in buying a new property yet? So assuming your going back "home" til you purchase a new one.

If that is the case, wait til you've had an offer accepted on a new property, then see what best deal you can get at that time .... effectively when your sale completes, you need to clear your NR mortgage, so effectively you can go to a new lender for your new purchase.