splitting my mortgage

twerp

Hi, my current northern rock mortgage is 104k on a 90k house, split in a secure loan of around 86k and an unsecured loan of around 18k. Mortgage period has ended with northen rock so I am floating on their current rate!

I am looking to pay down the 86k side so a remortgage on this becomes more possible, maybe to around 75k, should make me more lucrative to lenders!?

I have spoken to northern rock I am able to concentrate paying additional on just the secured loan for the time being, as apposed to both, good! However to take the secured loan side of things away from northern rock, will hike the interest rate to a whopping 12.7%, on 18k over 35 years, not so great!

I asked northern rock if I were to pay off (using another lender) say 95% of the secured loan and keep 5% with them would the unsecured loan rate go up, and they said no. However I have totally thought up this whole scneraio and so have no idea if this is practical, sensible realistic!?

Hope people can read at what I am getting at here.

I have posted on here before and got somewhat of a mixed response to my financial siutaiton, many people out to help, many seemed to just want to point out my previous faults. Please can I just request any useful information to the questions asked soley in this post.

Cheers Twerp

Charterhouse

Northern Rock have (I think) given you bad and inaccurate advice. They might well not put the rate up if this implausible situation were to play out, but in order for it to happen they would have to give their consent to you taking out a second charge on the asset that their debt is already secured on. The chances of that happening is unfortunately for you very slim indeed.

twerp

in other words, I cant borrow x% from another lender but still continue to have say the 5% with northern rock!? or in effect 2 mortgage acounts!?

Charterhouse

Exactly. You can't usually split mortgage borrowings.

Conrad

No twerp you cannot take away NRocks second loan security and give it to another lender AND still expect NR to offer the lower SECURED loan rate.

You said you'd had confusing info on here, so I'll try and help you with an example;

Imagine I want to borrow £10k from you
You agree but you want the deeds to my £10k car as security
You offer me a rate of 7% as your return on the deal.

A while later I then decide I want to borrow £2000 more against the car from another lender. If you agree this means £2k of your money is not covered by the car value as someone else has a claim to £2k, leaving you £8k.

You will either stop the second charge being place on the car or if you agree to the second charge you will now want 20% interest on the £2k that is jot covered by the car equity now as your risk is MUCH more.

Cheers

twerp

yes I understand, I think when it came into my head there would be issues like that present.

Seems my hands are tied which ever avenue I look down. Is there no loop holes, no tricks of the trade a fininacial advisor would use in my current scenario?

My aim is to prevent the interest rates hurting me to much, obviously id much rather prefer to pay more off my debt than just pay more on interest, but it seems I am being pushed/forced into the latter.

Its clear I need to hammer as much of my mortgage as possible but even then it doesnt look too rosey on my behalf!