Unsecured Loan with Northern Rock's Together Mortgage

KingKerouac

Hello everyone!

I'm a complete newbie and this is my first post.
I want to ask if anyone out there has experience of early repayment of their Northern Rock Together mortgage, and whether if, when paying off the mortgage, it is possible to carry on paying only the unsecured part as if it were a normal loan.
Would Northern Rock demand settlement of the unsecured part at the same time as the mortgage was settled?
The reason I ask, is that I am about to sell the house I am in and move to London to rent short-term so that I can gauge the area I want to live in before I commit to buying. The problem is that if they want me to settle the loan as well, I will have nothing left to pay a deposit and moving costs and advance rent etc, as the amount I am getting for the house is less than I anticipated.
Thanks in advance
K.

HelpWhereIcan

KingKerouac wrote:

if, when paying off the mortgage, it is possible to carry on paying only the unsecured part as if it were a normal loan..

Quick answer is yes

KingKerouac wrote:

Would Northern Rock demand settlement of the unsecured part at the same time as the mortgage was settled?.

No, but what they will do is increase the interest rate that you pay on it. If I recall right, it will go to their SVR + 5% which would give a payable rate of approx 11.59% :eek: The only thing that will stop the payments going to a level that scares you on face value is the term the loan is over, but that is what they are counting on.

I have found that people are often able to get a better secured loan at the same time as a new mortgage, and if you need it, that there are lenders such as Royal Bank of Scotland, Tesco, Barclays and Northern Rock who will allow you to put it over 10 years to keep costs down.

This is an example of just how cleverly priced the Together range is and a reason why everyone should be aware of the downsides of the scheme as well as the upsides.

T

KingKerouac wrote:

he reason I ask, is that I am about to sell the house I am in and move to London to rent short-term so that I can gauge the area I want to live in before I commit to buying. The problem is that if they want me to settle the loan as well, I will have nothing left to pay a deposit and moving costs and advance rent etc, as the amount I am getting for the house is less than I anticipated.
Thanks in advance
K.

You will probably want to look at re-broking the unsecured loan as I said above. But make sure you know exactly how much you could borrow for a new mortgage taking into account the unsecured loan being with Northern Rock or with another lender as the payment will obviously affect the amount you can borrow. This may well determine when you switch the unsecured portion from Northern Rock i.e before you apply for your new mortgage or after.

Hope this helps

Hope this helps

KingKerouac

Thanks very much for your reply.
I suspected as much. I will now tread a little more carefully.
Regards
K