Neg Equity + Huge Mortgage = MF Wannabe!

MascaraMinx

Hello all,

I'd like to join the MF Wannabe club, although it's a long way off for us...

Background is this; we bought a flat in London in 2006 using a Northern rock Together mortgage, so it worked out approx 103% mortgage :eek: (yes I know how stupid we were). OH and I both have quite well paid secure jobs and so the plan was to earn as much money as poss in London and overpay on the mortgage asap - we were guilty of being a pair of numpties who blindly though house prices would continue to rise.....

FF to 2008, I became pregnant (not planned!) and the flat was too small for 3 of us. So OH and I decided to move back to our native north. We sold our flat in London (amazingly made a slight profit!) and bought a much cheaper family home in Manchester -although we had to take our NR mortgage with us as we were tied in for 3 years so still stuck with 100% mortgage.

Since then, we have made regular overpayments, and we have come off the fixed rate onto the much cheaper SVR. Things are ok at the moment although I expect SVR to rise sharply soon so am a bit scared. It is also likely that we may be slightly in negative equity, although it's difficult to say without having the house valued.

Anyhow, the plan is to keep making overpayments, try to find a way to get away from Northern Rock to a good fixed rate, and to be mortgage free within 15 years! Long way to go, but the journey starts here......

phizzimum

you've come to the right place! you'll find lots of encouragement and good tips on this board.

one question - are you happy in your current home or do you see the need to move in the next couple of years? if you're happy to stay there then try not to worry about negative equity.

MascaraMinx

Thank you

We've no plans to move at all! Done enough of that in the last 4 years!! My concern about the negative equity is to do with remortgaging, we need at least 80% LTV to get a good deal elsewhere...

phizzimum

oh yes, i see your point MM

how much would you need to overpay monthly to get down to 80 %LTV?

MascaraMinx

Hmmm... I'm not sure, we're currently overpaying by £200 pm, hope to increase by a further £100pm, I'll have to work that one out!

Rob71

Go on... tell us all of the gory details... how much have you got outstanding, what's the value of the property and what rate are you on?!

j/k...

A serious question: do you know how much you *could* overpay by, if money/savings were no object?

Wishing you all the best on you MFW journey - stick around and with the peeps here: you'll get loads of help/pointers.:beer:

setmefree2

and Good luck with your MF journey

MascaraMinx

Rob71 wrote: »

Go on... tell us all of the gory details... how much have you got outstanding, what's the value of the property and what rate are you on?!

j/k...

A serious question: do you know how much you *could* overpay by, if money/savings were no object?

Wishing you all the best on you MFW journey - stick around and with the peeps here: you'll get loads of help/pointers.:beer:

I'm too scared to say! Ok no I will, have to do this properly.

Mortgage of £182k + Northern Rock Together loan of £9k = £191k :eek:on a house worth (I think) £195k. Rate was 6.19%, since Nov we have been on SVR of 4.79%. We make repayments of £1250 which is an overpayment of almost £200 per month. We are overpaying ad hoc amounts here and there of an extra £100 - £200 per month, and we save £150 per month which we could throw at the mortgage if necessary.

Joe_Bloggs

@MascaraMinx
Do you know if you are with Northern Rock PLC or Northern Rock Asset Management (NRAM). I don't know if it makes any practical difference which one you are in, only that borrowers would be told in January.
J_B.

MascaraMinx

Joe Bloggs - We're with NRAM. I don't really know the implications other than we won't be offered any new deals in the future. The only option open to us for some considerable time will be overpay overpay overpay and hope that the house holds it's value so we can at some point remortgage with a different lender. I can only hope NRAM don't increase the SVR too much but who knows? We're fully expecting it to shoot up over the next couple of years and so have started planning our finances based on that assumption.