Remortgage or stick with NRAM SVR rate?

OverAwy

Hi,

Just looking for some advice

Currently with Northern Rock Asset Management on fixed rate 5.99% which ends on 1 Oct 2010

House is currently worth £94,000

Outstanding Mortgage : £82,705.93
Unsecured Loan : 24,806.47

I'm currently making overpayments on my credit cards of a minimum £100 per month

As I see it my options are:
1, Stay on SVR and overpay mortgage
2, Stay on SVR and overpay unsecured loan
3, remortgage (If I Can) and go elsewhere (although unsecured loan will rise to around 10%!)
4, Try and sell at £94,000 leaving around £13,000 on the unsecured loan and rent until my situation is better?
5, take a payment holiday and use it to clear some of the debt

can anyone help with what they think would be the best descion?

Many Thanks in Advance

Thrugelmir

6. Stay where you are. Pay off credit cards first. Then re-evaluate the position. Most likely then start on unsecured loan.

Remortgaging will not be an option.


7. Take a trip over to the money saving and debt boards. As you've a long road ahead. Best not to tackle it alone.

OverAwy

Anybody got any more advice please?

carlw

Hi

I’m in a similar situation, i am not sure what the best thing to do is but this is what i have done and its been working for me.

Transfer all credit cards onto zero % balance transfer cards. Pay a fixed amount each month rather than then minimum amount and you can easily calculate how many months until your credit card will be clear.

Negotiate with Banks to freeze interest on you Overdraft/s and agree as small a repayment as possible. This was surprisingly easy as i simply did a cash flow which showed i was unable to pay them enough each month to cover their interest, they then offered to freeze the interest and asked how much i could afford to pay.

My mortgage reverted to the SVR reducing my mortgage by £121 per month back in November. I continue to overpay by this amount, reducing the negative equity. Make sure you tell northern Rock to apply these overpayments to the Secured part of the loan not the unsecured. The reason for this, is you have the option to borrow back any overpayments made to the secured loan but not the unsecured part. Therefore if you want to move the money at a later date to the unsecured loan this is possible but it give you a safety net in case you lost your job and needed to borrow the overpayments back.

By doing this for the last 18 months i have put myself in a situation where by November this year i will have cleared all my debts except my Mortgage, plus overpay the mortgage. Once this is all cleared all of the money i have been saving to clear my debts can be targeted towards overpaying Northern Rock.

Over 10k of debt in 2 years!

Good luck

Rocky_Star

Hi All

I'm looking for advice please.

We took out a £250,000 interest only mortgage with Northern Rock in May 2005 fixed for 10 years at 4.99%.

We had a 3 bed detached at that time which they valued at £300,000.

Our then mortgage was £130,000 giving us a drawdown facility of £120,000.

We built a few houses but got swept into the burst bubble which left us with around £70,000 out of the £120,000.

Our house is now a 5 bed detached and I would estimate it's value in the current climate to be around £400,000.

We had a letter yesterday from NRAM indicating that out fixed rate term ends in May 2015 when I will be 50 years young.

I doubt with my income now that I would get a mortgage for £252,000.

Are they obliged to put me on a SVR or can they insist that the full amount be paid back.

Will I have to have the house revalued and apply again for a mortgage with them or do they automatically transfer us to a SVR.
Can I carry on with an interest only SVR.

I realise that we still have 4 years to sort this and we have £70,000 playability and we have fairly high equity but I am concerned.

All help would be appriciated. :eek:

kingstreet

When you took out your mortgage, you should have received a Key Facts Illustration and a Mortgage Offer, both of which will show what happens at the end of your fix.

Unless the term of the mortgage was 10 years, same as the fix, the remainder of the mortgage term will see you drop on to what's known as the reversion rate. This will be standard variable, or some other rate shown in the KFI and the offer.

They will not be asking you to repay, unless it is due to be redeemed in 2015, as I mentioned in the last paragraph.

Vishuvasan

Hi,

I need some advise/suggestion on my mortgage situation as below.

My fixed rate mortgage(100%, 5yrs) with NRAM is coming to an end on Feb 2012. I have been told by NRAM that i cannot remortgage and i will have to shop around other the rate will revert to SVR. I obviously currently do not want to pay any money upfront. Will selling the property be a good option ? If i look for any other mortgage most of them want some deposit upfront. Can someone please share some ideas as to what might be the best options for me ?. Please advise.

kingstreet

As you have established, you will not have the option of another product with NRAM. If you take no action, your mortgage and unsecured loan will revert to the rate shown on your original KFI and offer, probably their standard variable rate.

Moving to another lender will require a deposit. It's possible you could create this by moving only the mortgage from NRAM, while leaving the unsecured loan behind. However, in doing this, the unsecured rate will increase to in the region of 10% to 12% per annum possibly negating the reason for remortgaging in the first place.

Selling may mean you can get rid of both parts of the Together deal if you can get a high enough price.

In these circumstances, the best advice anyone can give you is to try to pay more each month to reduce your mortgage balance. You may need to see out the fix before you can do this. Save extra payments into another account until march 2012, then pay off the lump sum you've accrued.

Vishuvasan

Thanks so much for your quick reply...

de1amo

i do like this thread- a free for all of questions--a mortgage clinic. İts good for newbies to open up without the glare of opening their own thread

skinnybowler

I took out a Northern Rock mortgage (now with NRAM) in September 2005 fixed at 5.99% for 5 years. This is due to revert on 1st August 2011.

I have just received a letter from NRAM, telling me that my mortgage will revert to the SVR (4.79%) on 1st August.

However, my KFI, and the accompanying "Mortgage Record of Suitability" given to me by my mortgage advisor at the time states that it will revert to 2.39% above BOE rate, which would be 2.89%.

The actual mortgage offer, does say it will revert to an amount "not more than the Standard Variable Rate", however, being a first time buyer at the time, relying on the advisor, I did not notice the difference.

Obviously, this maes a huge difference to the amount of interest and the repayments required. Can anyone advise where I go from here?