Northern rock 125% mortgage

camper_1982

A friend of mine brought a house in 2007 (there or there abouts) for 120k and took out a northern rock 125% mortgage.

Bad idea,

His mortgage term ends pretty soon and hes worried he wont be able to get another mortgage and will lose the house.

I said, you will just have to pay whatever there varible rate is until you have enough equity in the house to be able to get another mortgage.

Am i right?

beecher2

Yeah, you're right. His mortgage will be part mortgage, part loan so he could in theory move the mortgage part, and keep the loan with NR but the interest rate would increase so it is probably not worth it. He should try to overpay as much as he can to try to get the debt down.

katym79

hi - i think you might be right - i am in the exact same position myself and will just have to sit tight until we have more equity in the house - no one will offer us another deal at the moment.

poppy10_2

camper_1982 wrote: »

hes worried he wont be able to get another mortgage and will lose the house.

I said, you will just have to pay whatever there varible rate is until you have enough equity in the house to be able to get another mortgage.

Am i right?

Yes, you're right. He doesn't necessarily have to remortgage (it sounds like he couldn't even if he wanted to), he will just automatically go onto the SVR.