Lent too much?

g_attrill

aj150281 wrote: »

The one thing i didn't understand was if NR wanted to make up the difference to buy the property with a loan why not jus give me 12k which i asked for instead of 26k?

They would have told you how much they would be prepared to lend you. You would have then requested £26k and signed lots of paperwork to say that is what you wanted.

If you were placed under excessive pressure or lied to, to make you apply for the £26k then you might have some mileage, but you would need to prove it.

edit: Ok, the above people have mentioned it could be a 125% mortgage with reserve, I'm not sure how that works but to be honest if you are old enough to spend a borrowed £26,000 then you are old enough to understand that it needs to be paid back somehow. Sorry!

RecoveringAlcoholic

Do folks forget that they signed this:

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT.


.

devils_advocate

aj150281 wrote: »

Maybe my post was misleading an i apollogise for this. All i was wondering is that if something had bin done wrong and i was givin more money than i needed jus to make more money out of me than i feel that i am well within my right to question this as is anyone else.
To answer the question about the extra money i used all of it to do up my property e.g new floors throughout, new kitchen, new bathroom etc.
The one thing i didn't understand was if NR wanted to make up the difference to buy the property with a loan why not jus give me 12k which i asked for instead of 26k?

Tesco sells cigarettes. If I buy cigarettes there, they don't make any value judgement as to whether I want to have one packet or six. If they're willing to sell me more than one, it's not their fault that I smoke more than one pack in a night, and damage my health.

Its the same with Northern Rock. They lent you the money, you were happy to take it, and you seem happy to pay it back. There's no problem. You got what you wanted, they get their money back, and they get what they want.

RecoveringAlcoholic

devils_advocate wrote: »

Tesco sells cigarettes. If I buy cigarettes there, they don't make any value judgement as to whether I want to have one packet or six. If they're willing to sell me more than one, it's not their fault that I smoke more than one pack in a night, and damage my health.

Its the same with Northern Rock. They lent you the money, you were happy to take it, and you seem happy to pay it back. There's no problem. You got what you wanted, they get their money back, and they get what they want.

Join the campaign to stop Tesco selling alcohol.:D

aj150281

if you are old enough to spend a borrowed £26,000 then you are old enough to understand that it needs to be paid back somehow. Sorry![/QUOTE]


That's very true, but i never said i didn't want to pay it back.

Gorgeous_George

NR were in the business of lending money.

Obviously, you cannot have a mortgage for more than 100% of the value of the house so the extra is a personal loan. You might use the money for a car or,more likely, to furnish your new home. The interest rate was quite attractive and in a rising housing market, everyone is happy when after 2 or 3 years, you remortgage at 95% and clear the loan.

Unfortunately, there was no Plan B.

I really feel for people who just happened to be at a level of maturity where they wanted/needed to settle down and build their own nest and were unlucky with the timing. I bought my first home for similar reasons and with a 100% mortgage.I was luckier.

The only advice I can offer is that you work as much as possible, earn as much as possible and get the debt down to a manageable level. Stay fit, healthy and happy and you will be richer than a dead millionaire.

GG

bumpoowee

aj150281 wrote: »

Maybe my post was misleading an i apollogise for this. All i was wondering is that if something had bin done wrong and i was givin more money than i needed jus to make more money out of me than i feel that i am well within my right to question this as is anyone else.
To answer the question about the extra money i used all of it to do up my property e.g new floors throughout, new kitchen, new bathroom etc.
The one thing i didn't understand was if NR wanted to make up the difference to buy the property with a loan why not jus give me 12k which i asked for instead of 26k?

So to clarify then - are you saying Northern Rock told you it was 121k or nothing?

If yes, is there any reason you couldn't pay the excess back to Northern Rock by overpaying the mortgage or repaying some of the loan?

benjo

To the OP, thanks for clarifying your original question - makes much more sense now, sadly I dont think there is anything illegal in the way that your mortgage was arranged and as such you are fully liable to pay up as agreed in the terms and conditions attached to the product.

In essence (and very much abridged) it is the suitability of the recommendation for the consumer at the time of sale, not the performance of the product.

Example: If the mortgage was fit for purpose - you can buy your property and the extra loan allowed you to refurb it and more importantly you can afford the monthly payments - then it is suitable at the time of sale.

Now, if property prices had continued to rise, and your house was now worth £150k you could remortgage and repay the loan section with no hassles, sadly the market didnt perform as expected, your property is worth less than the 100% mortgage that you borrowed and certainly less than the 100% mortgage and 25% loan - but that doesnt mean you were missold the original product.

In order to pursue a claim of misselling you would have to prove that the product was never suitable, that you were not informed of other alternatives (you were told you were not eligable for a 95%/100% mortgage and that you could only borrow 125% or nothing), that any risks were not explained to you - but even then, if you can still afford to pay your debts and you still have your house - then arguably the product remains 'suitable' if not desirable. (Im not a legal/financial bod, so dont take my word for it).

Visit other sections of this forum, there is some great advice about money saving, overpaying your mortgage and increasing your income, Im afraid it will be a few years yet before you get top side of this loan - but look on the bright side, you do have your own home, you can afford it and you have to pay to live somewhere.

adamski911

Slightly off topic,but if borrowed 90k and bought a house for 80k and the difference of the 10k is as an unsecured loan.If I was to sell my house,would i be able to pay off just the 80k mortgage secured on my house deeds and continue to pay the extra 10k with northern rock on the standard variable rate?

_Andy_

Yes but the interest rate would increase dramatically.