Northern rock "together"

BPJ2009

Hi, this is my first post so please go easy on me. I am looking for peoples views on my current mortgage situation...
We have a Northern Rock together mortgage. Initially when enquiring about a mortgage we were told based on our incomes we could get a mortgage up to £136,000 which suprised us both. We found a house and had a bid accepted for £123,000.00 in 2007. The total amount borrowed included personal debts of £8,000.00. Our Northern Rock Together Mortgage split the debt - £111,000 approx on mortgage (interest only!) and £20-21,000 on an unsecured loan.
I feel particularly agrieved that this was never highlighted in bold letters during our application. At no point were we advised that our unsecured loan interest rate would sky rocket by 8% should we just move the mortgage component. I'd have thought that this should have been disclosed to us by our IFA? Nor were we advised that repayment would have been a much more suitable option given that we did not have an endownment, savings plan etc...
My unsecured loan will go up £100.00 based on the existing SVR should we manage to switch mortgages. My deal runs out in January when I intend to sit on their SVR till August to reduce redemption costs during which time I will switch to repayment.
Does anyone think I have grounds for a complaint. I know somewhere in the small print terms and conditions this clause will be perfectly explained however, this surely is a condition that must be pointed out at the start of any application??? I have read alot about together customers problems but we seem to be in a worse situation that anybody and, in hindsight, I dont think Northern Rock have leant to us responsibly.

kieran1979

BPJ2009 wrote: »

Hi, this is my first post so please go easy on me. I am looking for peoples views on my current mortgage situation...
We have a Northern Rock together mortgage. Initially when enquiring about a mortgage we were told based on our incomes we could get a mortgage up to £136,000 which suprised us both. We found a house and had a bid accepted for £123,000.00 in 2007. The total amount borrowed included personal debts of £8,000.00. Our Northern Rock Together Mortgage split the debt - £111,000 approx on mortgage (interest only!) and £20-21,000 on an unsecured loan.
I feel particularly agrieved that this was never highlighted in bold letters during our application. At no point were we advised that our unsecured loan interest rate would sky rocket by 8% should we just move the mortgage component. I'd have thought that this should have been disclosed to us by our IFA? Nor were we advised that repayment would have been a much more suitable option given that we did not have an endownment, savings plan etc...
My unsecured loan will go up £100.00 based on the existing SVR should we manage to switch mortgages. My deal runs out in January when I intend to sit on their SVR till August to reduce redemption costs during which time I will switch to repayment.
Does anyone think I have grounds for a complaint. I know somewhere in the small print terms and conditions this clause will be perfectly explained however, this surely is a condition that must be pointed out at the start of any application??? I have read alot about together customers problems but we seem to be in a worse situation that anybody and, in hindsight, I dont think Northern Rock have leant to us responsibly.

Look at your KFI - it will be very clear in there that the unsecured part will go up if you move your mortgage. You have no grounds to complain as it is in there, no question.

BPJ2009

I will but couldn't that be said of all bank charges, ppi etc...if I am keeping that part of the debt with them, they could just honour the rate I am on without hiking it up 8%...what about treating customers fairly? Seriously, if this was pointed out to me I would have never taken the deal.

Treadmill

You didn't read the KFI at the time then ?

sclancy1

The same happened to me. I only found out a month ago that when I remortgaged for a higher amount a few years back they did the extra as a loan rather than add to my mortgage.. Didn't get any paperwork for seperate loan though!

BPJ2009

I've learnt that the 8% is to safeguard the risk I pose at a negative equity customer. However, I have never missed a payment and have a great credit rating. I would simply like to know if anyone has managed to negotiate the rate on this unsecured part. I realised that I was going into negative equity at the time but did not foresee the economic downturn! 8K in negative equity at the time is now 16k. I was hoping it would go the other way. I appreciate that it is a risk which worked well for some (early NR TOGETHER CUSTOMERS) and bad for others - me!
I do not think that we should have been recommended an interest only 125% mortgage. If this was repayment I may have been able to remortgage come Jan 2010. We are totally at the mercy of NR SVR therefore, we plan to increase are repayments by £200 p/m for a year. We hope that this along with a stable at low svr of 4.79 will reduce the debt enough to get a 95% deal elsewhere. In conclusion, I feel we were not properly informed, our faith was left in the hands of the IFA who did not point this key term out to us.
I would like to think that NR would offer me a more attractive rate for the unsecured loan or is there any other lenders out there that would do this?

Dan_1976

This subject always gets me wound up!

I had a NR together mortgage, I was a mortgage broker, I new the risks, I have paid the price look at my sig!

It is very clear in the KFI's, were you really recommended the product? Think about how you would have reacted when or if you were told you cant buy this house, together mortgages are to high risk??!

My business went under as soon as NR went to the wall, NR helped me get my home, one I could not have afforded without the together mortgage.

Think your self lucky, many people have lost homes this year due to greed from the public and finance houses, myself included!

BPJ2009

i was definately sold this mortgage after recommendation - no discuss took place about what, if any, repayment vehicle I had to clear the debt at the end of the interest only. I find that i can switch to repayment for a £75 fee and repayments will only be £75 more expensive per month (coincidence). I love my home and I do in many ways count myself lucky but we are definately on the brink and in desperate need of housing prices to sneak back up so we can eventually remortgage and as stated previously not be at the mercy of NR SVR! :eek:

Leon_W

Come along BPJ2009, what part of "interest only" do you not understand ?

You could quite easily overpay your Northern Rock mortgage without any penalty and it would have been exactly the same as a repayment mortgage.

The fact that you didn't leads me to believe that you spent this money on other things at the time and it has now come back to bite you. It's a little rich of you to come on here bleating woe is me 2 years down the line when there were penalty free options available to you.

EDIT: Just to add. There is no need to pay a £75 fee. Just amend your DD mandate to the equivalent of a repayment mortgage or greater (you'll save interest by doing so, build equity and repay it early)

unite79

Spot on Leon, OP would have had to overpay by around £1,000 per month to have any real equity to make remortgaging possible - I assume your borker looked at standard mortgages - But with you unsecured debt this was not affordable.

Maybe, just maybe the OP should look at the positive - Nrock are not demanding there money back, now the LTV has gone above 125%!

b0rker

unite79 wrote: »

Spot on Leon, OP would have had to overpay by around £1,000 per month to have any real equity to make remortgaging possible - I assume your borker looked at standard mortgages - But with you unsecured debt this was not affordable.

I know nothing.