Help!!! 100% Mortgage

Marcos117

qwertyuiop

meanmachine_2

Northern Rock redemption fees tend to be extremely high. A friend of mine is locked into a crippling 8 percenter!

I'm afraid you don't get much sympathy from me.

You didn't have a deposit, you wanted to borrow more than the house was worth. The IFA gave you what you asked for.

You have to live with it, or take a huge hit on the ERC.

The redemption fee will be outlined in the mortgage paperwork.

Sometimes it's cheaper to rent than take out a massive IO mortgage.

Wickedkitten

Marcos117 wrote:

Hi all, I need some advice.....
I bought a house with a friend about 6 months ago as we were both fed up with throwing money away renting.

I went to see an IFA as we did not have a deposit and he got us a 102% mortgage with northern rock (needed the extra for fees etc). We are now tied into this mortgage for 3 1/2yrs years, this means that over the next 3 1/2 yrs we will have paid around £28,500 in interest and not touched the mortgage itself. They also gave us an extra £1000 when we signed up to help with fees etc that we would have to pay back if we remortgaged in this time.
This is our first house and we didn't really know what we were doing and feel like we've been screwed by the IFA.

I'm not sure what northern rocks redemtion fee is, but should we get a loan out to cover the redemtion fee, the £1000 they gave us and a deposit and then remortgage?

Wait, do you actually have the Northern Rock Together Mortgage as an IO?

Joe_Bloggs

How much did you borrow and over what term ? What is the interest rate now ? When does the SVR rate start. What are your monthly repayments. Do you have any equity in the property. Is this a straight forward repayment mortgage, one with a linked unsecured loan, part interest part repayment ?
It sounds expensive to get in or out. You normally get a redemption figure in your annual statement. Ask for one from your lender to see what the full situation is. This situation does tend to force one to learn more about finances.
J_B.

Wickedkitten

Joe_Bloggs wrote:

How much did you borrow and over what term ? What is the interest rate now ? When does the SVR rate start. What are your monthly repayments. Do you have any equity in the property. Is this a straight forward repayment mortgage, one with a linked unsecured loan, part interest part repayment ?
It sounds expensive to get in or out. You normally get a redemption figure in your annual statement. Ask for one from your lender to see what the full situation is. This situation does tend to force one to learn more about finances.
J_B.

If it is the together mortgage then either 5-10% of the purchase price will be an unsecured loan.

meanmachine_2

Actually, I DO have some sympathy for the OP.

I dug up some old paperwork when I was looking to buy a few years ago.

The broker had suggested a 30 year stepper, tying me into a stupid rate in the final year.

At the time I just accepted whatever they recommended.

Thank the lord for the internet! Educate yourself or get screwed over by the "professionals".

OP: Outline your total mortgage loan, your monthly repayments, amount of equity in property, ERC fee etc etc and people on here will be able to tell you if it's cheaper to get out of the mortgage (I expect not), or to stick with it.

nadnad

meanmachine wrote:

Northern Rock redemption fees tend to be extremely high. A friend of mine is locked into a crippling 8 percenter!

I'm afraid you don't get much sympathy from me.

You didn't have a deposit, you wanted to borrow more than the house was worth. The IFA gave you what you asked for.

You have to live with it, or take a huge hit on the ERC.

The redemption fee will be outlined in the mortgage paperwork.

Sometimes it's cheaper to rent than take out a massive IO mortgage.

now mean machine that really wasn't much help now was it !! glad you have relented and now feel some remorse!

to the OP we really need to know all the details before anyone can advise.
post everything eg value of house, value of mortgage, monthly payments, interst rate, type of mortgage - i'm assuming Interest Only, also it would probably help if you posted your salary and that of your room mate. I feel for you because it sounds as though - even though the financial advisor gave you what you (thought) you wanted - he didn't actually do much advising. And meanmachine as you have pointed out so many people put their trust in so called professionals but lets all just be glad for this websites where the ordinary person off the street can learn all about finance!

emmaHarris_2

I feel for you because it sounds as though - even though the financial advisor gave you what you (thought) you wanted - he didn't actually do much advising. And meanmachine as you have pointed out so many people put their trust in so called professionals but lets all just be glad for this websites where the ordinary person off the street can learn all about finance!

Absolutly!! This must be the best post I have seen to date! If I had a 'thanks' button i would press it a 100 times!!

Joe_Bloggs

@Meanmachine

OP: Outline your total mortgage loan, your monthly repayments, amount of equity in property, ERC fee etc etc and people on here will be able to tell you if it's cheaper to get out of the mortgage (I expect not), or to stick with it.

I was thinking the very same thing. I'm not sure of all the calculations yet but this would be my list of things you will need to know. This site has a role to educate and inform the readers.

Stick or twist, any suggestions ?

1) The term of the mortgage. If you took out a 25 year mortgage then two years later remember you would need 23 years mortgage to stay on track.

2) The type of mortgage if you don't know then find out now !

2) The rate on interest that you are on and face if you stay. Also the new rate and how long this will last and what it eventually become and when.

3) The current amount borrowed.

4) The fees for remortgage including redemption costs if they apply.

5) Your monthy payment would help confirm the figures.

J_B.

Marcos117

qwertyuiop

Wickedkitten

Marcos117 wrote:

I'll post the exact details over the weekend for you all to have a look. Cheers.

A 100% mortgage was the only way that we could get on the ladder and the mortage repayments are exactly the same as we were paying when renting. So with that in mind, even if we have to stay tied in for the 3yrs we're not gonna pay any more that we would have if we were renting and at leat we'll still have the equity in the house as well as getting on the property ladder.

The second you switch to repayment though, you are back to square one.