Northern Rock unsecured loan

cerysb

3 years ago we took out a 'Together mortgage' with Northern Rock which included £30k unsecured loan.

Our fixed period is coming to an end and thankfully we seem to be one of the more lucky ones who's payments will decrease however on looking to move and thus obtain a new mortgage we have found out that unless the entire unsecured loan is repaid, should we take the mortgage elsewhere that is, the interest rate for the loan will go from 4.7% to almost 12.8%. We have further been advised that we are unable to reduce the payment term, our only options are to pay the outstanding amount in full or pay large chunks to repay quicker (neither of which are an option).

We do have equity in our property should we sell but not sufficient to pay estate agent/solicitors fees, the outstanding sum of the loan and have sufficient for a deposit.

We obtained our mortgage through a broker however this is the first we have know about the position with regards the repayment/interest rates attached to the loan and feel that we have been seriously mislead and have no option but to stay with Northern Rock for the next however many years!

our question therefore is do we have any comeback against the broker for mis-selling the product to us, had we known that effectively we could never leave Northern Rock, we would never (and i doubt anyone else would) have taken out the mortgage with them, or are we effectively stuck with Northern Rock?

Long winded question I know but any advice would be appreciate.

VIGILANT22

Everything explaining the Together mortgage is explained in your T&C's which you received at offer stage.
Northern Rock didn't have a crystal ball so what chance did the broker have..

Dan_1976

Hello OP, as Vigilant says its in the t&c's.

I think if you look at your KFI you will find it in section 12. I may be wrong but its in the KFI and your credit agreement.

As to complaining, I am not sure. I feel these mortgage are going to be jumped on by claim monkeys trying to make money or get money back or whatever. I think you may have a point as many aspects of the together range are unclear. Unless a broker uses them regularly they may not know enough about them.

Check your suitability letter as it should be mentioned in there, it should say something like the undsecured loan is unregulated blah blah please read section xx. I think compliance got wise to these mortgage but I am not sure it was to early when you got yours.

Good luck

Thrugelmir

You would have been unlikely to obtain the total advance you did, secured and unsecured with any other lender. So be happy that at least you are on the property ladder.

Best advice is to overpay your current debt on a regular basis. As you say your repayments have decreased , so there's some money to start making in roads into your debt.

You have no recourse against your mortgage broker. Ultimately the decision to purchase was yours. As much as we may dislike it, we have to accept responsibility for our own decisions.

Over time your situation will improve. A mortgage is a long term debt with little capital repaid in the early years.

Dan_1976

I hope your right Thrugelmir, I think many brokers may have left important parts out of the suitability letter. I can see this become a bit of a claim party.

Thrugelmir

Dan_1976 wrote: »

I hope your right Thrugelmir, I think many brokers may have left important parts out of the suitability letter. I can see this become a bit of a claim party.

Unsecured loan suggests that there was already existing debt. Providing borrower was in position to meet debt repayments then difficult to see why advice would given would have been bad.

NR like other lenders have changed rules/criteria on new lending. Thats nothing to do with the broker as could not have been foreseen.

Dan_1976

Most together mortgages at 100% helped with a deposit, over 100% and your correct mostly to help debt and manipulate affordability.

Although I dont think brokers will be damaged by this, I do think that in the early days of 100% plus mortgage, NR together more so, complaince was not up to scratch as it was a new type of mortgage faced by the FSA with an unregulated element.

The broker does not make the product and features, but, if a client can prove the broker did not inform the client of these features, you dont know. TCF etc and I think the suitability letters used may not be good enough to deal with the together product.