Northern Rock Borrow Back changed procedure - Am I screwed?

rb157

Until 2.5 years ago I was earning approx £60K and was paying off my mortgage as quickly as I owed about £150k on my £250K house. Then I had a stroke, and decided to take some time out with my growing family whilst I recuperated.

I even received a CIC payout which virtually cleared my remaining debt. I paid this into my Northern Rock mortgage and virtually cleared my debt. I have over that period borrowed back about £30K and kept my outgoings down, but today I phoned to borrow back some more and found that they now have a questionaire and my borrow back has been referred to underwriting.

Now I don't know if they will refuse my borrow back, but not sure where I will go if they do. I've been trying to get a job, but the market is pretty limited in my original career at the moment, and I get rejected outright because I haven't worked for a while. I had decided to start my own venture, but this will take time and a little money, but if I am going to find my funds restricted then that is out of the window.

Has anyone got any advice on what NRs lending criteria now is in a case like mine, even if they do lend me another £5K, then where is there limit going to be? My statement says that I have a Total amount available to borrow back of £135K, but do I have any right to this money?

Any advice gratefully received.

koexelek

Where as you used to be able to draw back money at any time, without further underwriting, they now reserve the right to re underwrite all further borrowing.

Sadly, if you do not currently have any earned income, I can't see them granting any further borrowing

Gorgeous_George

They are trying to protect themselves and the taxpayer. By doing so, they are also protecting you and your family. You should thank them.

Maybe MEWing is not the answer to your problems? I hope there is a better way.

GG

rb157

In what way are they protecting me and my family?

The only way out is to sell my house (at the worst possible time) and redeem my mortgage, how can that be helpful to anyone when I could be earning decent money in a year or so?

If I had put the money in a savings account, I would be much better off than by doing what I thought was the right thing to do. I have always lived well within my means and still do. I understand that it is their money, but to change the process with no warning and no way out is a little unfair I feel.

We'll have to see what the outcome is.

opinions4u

rb157 wrote: »

In what way are they protecting me and my family?

The only way out is to sell my house (at the worst possible time) and redeem my mortgage, how can that be helpful to anyone when I could be earning decent money in a year or so?

If I had put the money in a savings account, I would be much better off than by doing what I thought was the right thing to do. I have always lived well within my means and still do. I understand that it is their money, but to change the process with no warning and no way out is a little unfair I feel.

We'll have to see what the outcome is.

The banks have been rightly hammered for lax lending procedures.

When they get their act together, they get hammered for taking a common sense approach - doing odd things like checking people's income and ability to repay debt.

They can't win, can they?

koexelek

opinions4u wrote: »

The banks have been rightly hammered for lax lending procedures.

When they get their act together, they get hammered for taking a common sense approach - doing odd things like checking people's income and ability to repay debt.

Next thing we know, they will be getting surveyors to look at properties properly, rather than just drving past

psoley

quick search in google brings up numerous articles about Northern Rock changing their criteria.

A quote from one of the articles:
'The bank said borrowing money back had never been a right and had always been at its discretion'

I have just been through the mortgage application process and its tough out there now, even with good income and 25% down.

Times have changed a lot.

db7

rb157 wrote: »

In what way are they protecting me and my family?

The only way out is to sell my house (at the worst possible time) and redeem my mortgage, how can that be helpful to anyone when I could be earning decent money in a year or so?

If I had put the money in a savings account, I would be much better off than by doing what I thought was the right thing to do. I have always lived well within my means and still do. I understand that it is their money, but to change the process with no warning and no way out is a little unfair I feel.

We'll have to see what the outcome is.

rb157, you have my sympathy. Unlike Georgeous George, I think it's disgusting that you are being treated in this way. I have the same sort of flexible mortgage with NRock and have overpaid various amounts at various times in the last 2 or 3 years. Luckily I still have the income and job so I haven't had a problem borrowing it back. But if I lose my job I may need some of that money back and, like you, would probably have trouble getting any. So much for "flexible" mortgage - how they can get away with changing the rules halfway through a mortgage contract I don't know. I can't give you any help or advice I'm afraid rb157 but I do wish you all the best.

db7

rb157

Thanks db7,
I appreciate your comment. I read that they haven't changed their terms and conditions, just their processes and therefore saw no need to inform anyone. I just thought that I was doing the right thing in piling my savings into paying off my debt, rather than into a savings account with paltry interest (and paying tax on it), but it would seem I was wrong and in future will ensure that borrow back is a right.

Whilst things are pretty dire, I have not had my borrow back rejected yet and I do have some other savings (ISA's) though these wont last for ever and I'm hopeful that a new job will come around so that I can wave good riddance to NR when my fixed rate expires next year.

I just hope that my story will be warning to those who want to pay off their mortgage, that actually paying off your mortgage is not the best way of saving if you will ever need that money again.

Thrugelmir

rb157 wrote: »

Thanks db7,
I appreciate your comment. I read that they haven't changed their terms and conditions, just their processes and therefore saw no need to inform anyone. I just thought that I was doing the right thing in piling my savings into paying off my debt, rather than into a savings account with paltry interest (and paying tax on it), but it would seem I was wrong and in future will ensure that borrow back is a right.

Whilst things are pretty dire, I have not had my borrow back rejected yet and I do have some other savings (ISA's) though these wont last for ever and I'm hopeful that a new job will come around so that I can wave good riddance to NR when my fixed rate expires next year.

I just hope that my story will be warning to those who want to pay off their mortgage, that actually paying off your mortgage is not the best way of saving if you will ever need that money again.

By clearing down your debt you would haved saved a considerable amount of interest. Far more than by leaving it on deposit.

Whilst I sympathise with your situation. Rather than complaining about the bank not lending you money. The taxpayer is funding NR remember. You should take action. Move to a cheaper house. Reduce your outgoings.

You'll find life far less stressful then. The economic climate has changed. For many the next few years is going to be tough. But guess what we'll get through it!

Gorgeous_George

rb157,

I wish you all the best too.

I think the best may not be increased debt while unemployed.

GG