Northern Rock - Good Idea or not..?

Lottiepots

I would appreciate some advice. I am now debt free (yeeha!) although my signature has not yet been updated.

As you can see over the last year we have being paying lots to debt, this was to enable us to buy a house.

The only mortgage to suit our needs at the moment is the Northern Rock together mortgage, mainly because we have not got a deposit and we are in Scotland so need to pay over what the value of the house is surveyed at. I know that people on this forum are not exactly enamoured with this mortgage. But basically we do not want to wait any longer before we get our foot on the property ladder.

The rates are fixed at 6.29 for 2 years and we are hoping that in this time our house (in a nice are in Glasgow) will grow at a rate faster than we could save a decent deposit. We will then release equity on our home to cover the unsecured part of the together mortgage and move on to a cheaper mortgage rate in two years time. Providing that there are cheaper rates available.

Please can anyone advise if this is really stupid!

Thanks

Lottiepots

I should add that the projected growth rate for houses within the West End of Glasgow at the moment are 15% for the next 5 years. I know there are no certanties but just wanted to give you all the info I have.

Any view points; positive or negative would be appreciated!

maryjane01

I would expect a few scare mongerers to come along here soon and tell you about house prices crashing and you will be in negative equity. Thre are no gaurantees with house prices, but even though there have been dips, prices do generally tend to rise! I am also buying on a 100% mortgage. My only advice would be try to buy something that you can add value to, maybe something that needs a bit of redecoration even if you don't want a major project. Then you can add some value so even if house prices don't rise as projected you will have a bit of extra equity. We live in London and also think house prices here will rise possibly faster than we can save. If you are confident about your future earnings and are still young go for it now while you have the chance.

lovelldr

HI, I am just ending a two year fixed rate together mortgage with northern rock and now moving onto a bigger house with my partner.
Two years ago I was single with no deposit available and northern rock were my only option because i had to stretch so much in affordability too !!!
It is worth it if you really want to get the place you like or to get on the property ladder, I have no regrets. The only thing i would advise you on is read the small print and if you are offered cash back be aware that you are bound for longer to it than the length of the fixed mortgage. So eventhough my mortgage was portable, it is not suitable for our new property and though i have completed the two years and am free to move onto a new mortgage I am still liable to pay the cash-back back.
Good luck !

Lottiepots

Thanks to both of you for answering.. I must say I expected more negative answers so thanks.. I relaly do think this is the best option availabe to us at the moment.

Stewboy1978

Personally I would go for it.....I am in Edinburgh and have a mortgage on a flat I let out and a mortgage with my wife on the property we live in.

In both cases we bought the houses and they were needing a fair amount of work done so we got them a bit cheaper.

I am presuming that the Glasgow market is like Edinburgh.....Overpriced and a nightmare to get on!

If that is the case I would go for it, esp if the deal is only for 2 years - Yes you will pay 1% or so over any other deal but I would imagine the price of your house will buy will go up over the 2 years as well, so when your fixed rate period is up you may be in a better position to bargain etc on a new deal.

Hope this helps (a bit! :rolleyes: )