Remortgage or stick with NRAM SVR rate?

badobsession81

Ok, here's a possibly daunting set of options, but I'm keen to get some second opinions... while this relates to our NRAM mortgage, please refer me if you think I'd be best placed using another thread...

Currently have NRAM 125% together mortgage on SVR (approx 4.7/8% I think) with my fiance. 35 year term with 30.5 years left. Approx 178k in total whem we took it out (148ish secured and 30k unsecured) with only a couple of grand cleared off capital since we took it out. House value has remained about the same at 155k. We're currently paying £900/month with no overpayment.

Credit Cards between us total £7.5k and have been shuffled, but not seeking new deals due to unlikelihood of getting credit (a mix of 0% 6month deals and 6.9% lob and £1300 on 17.9%) However, we both have a good credit rating and never miss payments. My experience in the last couple of years has been that our bank has been willing to lend more (have increased credit card balance and overdraft without my asking and consolidated debt into a loan) - perhaps just because they know my history more? The loan I mention is a personal loan at 8.7% and monthly payments of £167 - due to run for another 18 months (approx £3k outstanding, although any settlement figure would be slightly lower).

And then there's the wedding - set to land us with a £5k bill at least come Autumn 2013. Ahead of this there are likely to be photographers etc. to book. With help from parents I think we're still looking at us needing to find an additional 2-3k. Fun.

We're both recently in a position to pay more towards our debts, so have spread £450 across the CCs jointly as well as continue to pay mortgage and personal loan.

I will personally have up to an additional £200 temporarily (12 months or so) that I can direct towards debt.

My only dilemma is what to focus where, and consider wedding costs as well. My reckoning is that the quicker we can clear off CCs the more disposable cash we will have nearer the wedding date, but I was unsure whether I should be considering clearing the loan or paying down the mortgage as well (ie spread our payments) or concentrate them somewhere else.

Any help or advice greatly received.

lizj1982

Not sure if anyone can advise. I'm on an interest only SCR NRAM mortgage. I am currently making small overpayments which I want to increase. NRAM currently allocate this money but am I best to over pay the mortgage or unsecured loan part first? Mortgage is approx £86k and unsecured loan is approx £4k
Thanks

badobsession81

lizj1982 wrote: »

Not sure if anyone can advise. I'm on an interest only SCR NRAM mortgage. I am currently making small overpayments which I want to increase. NRAM currently allocate this money but am I best to over pay the mortgage or unsecured loan part first? Mortgage is approx £86k and unsecured loan is approx £4k
Thanks

My instinct with this is that it depends on your house value and whether you want to move soon...

also, sometimes the simple feeling of clearing debt is rewarding and motivating, so it might be really positive to direct to the smaller 4k unsecured and clear that?

Thrugelmir

badobsession81 wrote: »

Ok, here's a possibly daunting set of options, but I'm keen to get some second opinions... while this relates to our NRAM mortgage, please refer me if you think I'd be best placed using another thread...

Currently have NRAM 125% together mortgage on SVR (approx 4.7/8% I think) with my fiance. 35 year term with 30.5 years left. Approx 178k in total whem we took it out (148ish secured and 30k unsecured) with only a couple of grand cleared off capital since we took it out. House value has remained about the same at 155k. We're currently paying £900/month with no overpayment.

Credit Cards between us total £7.5k and have been shuffled, but not seeking new deals due to unlikelihood of getting credit (a mix of 0% 6month deals and 6.9% lob and £1300 on 17.9%) However, we both have a good credit rating and never miss payments. My experience in the last couple of years has been that our bank has been willing to lend more (have increased credit card balance and overdraft without my asking and consolidated debt into a loan) - perhaps just because they know my history more? The loan I mention is a personal loan at 8.7% and monthly payments of £167 - due to run for another 18 months (approx £3k outstanding, although any settlement figure would be slightly lower).

And then there's the wedding - set to land us with a £5k bill at least come Autumn 2013. Ahead of this there are likely to be photographers etc. to book. With help from parents I think we're still looking at us needing to find an additional 2-3k. Fun.

We're both recently in a position to pay more towards our debts, so have spread £450 across the CCs jointly as well as continue to pay mortgage and personal loan.

I will personally have up to an additional £200 temporarily (12 months or so) that I can direct towards debt.

My only dilemma is what to focus where, and consider wedding costs as well. My reckoning is that the quicker we can clear off CCs the more disposable cash we will have nearer the wedding date, but I was unsure whether I should be considering clearing the loan or paying down the mortgage as well (ie spread our payments) or concentrate them somewhere else.

Any help or advice greatly received.

Pay down your credit cards as much as possible. Then use them to pay for your wedding later on.

If you don't prioritise your debts over expenditure. Then you risk being trapped with NRAM for a very very long time.

Really a question of choice that's down to you.

Personally I wouldn't want a £178k mortgage with interest rates only heading one way in the future.

lizj1982

badobsession81 wrote: »

My instinct with this is that it depends on your house value and whether you want to move soon...

also, sometimes the simple feeling of clearing debt is rewarding and motivating, so it might be really positive to direct to the smaller 4k unsecured and clear that?

I paid £91k for the house prob worth £75k if I'm lucky. Would love to move but am realistic and understand that won't happen anytime soon. Priority is to remortgage away from NRAM. Thanks

Thrugelmir

lizj1982 wrote: »

I paid £91k for the house prob worth £75k if I'm lucky. Would love to move but am realistic and understand that won't happen anytime soon. Priority is to remortgage away from NRAM. Thanks

Make regular overpayments to your debt. Like rolling a snow ball you'll find that over time the gap will narrow quicker and quicker.

steviepenn

lizj1982 wrote: »

Not sure if anyone can advise. I'm on an interest only SCR NRAM mortgage. I am currently making small overpayments which I want to increase. NRAM currently allocate this money but am I best to over pay the mortgage or unsecured loan part first? Mortgage is approx £86k and unsecured loan is approx £4k
Thanks

I was advised by an IFA (Independent Financial Adviser) that it makes little difference which way the funds are allocated when I was trying escape from NRAM recently.:mad: Both secured and unsecured debts are linked to the mortgage on your credit scoring and are both taken into account if moving to a new lender in the future.

Thrugelmir

nram-ed wrote: »

We're being screwed and this is outrageous.

Remortgage then to another lender.

opinions4u

nram-ed wrote: »

I'm on this ridiculous NRAM variable rate too and I feel like this is entrapment - can't get out of it cos all my money is going to their interest repayments.

When did the "ridiculous rate" last go up?

Have you made any effort to switch to a repayment mortgage, make overpayments or save up some cash elsewhere?

The NRAM SVR is lower for the vast majority of their customers than the figure stated on the mortgage offer / key facts document at the point of sale. For others it is exactly the same. You have cheaper mortgage payments than you expected.

There are many building societies with a higher SVR than NRAM.

Blame the government, blame the banks. Makes no difference. Take action specific to your own debt to resolve this. Don't sit around thinking that a couple of clicks on a web site will make your life any different.

badobsession81

opinions4u wrote: »

When did the "ridiculous rate" last go up?

Have you made any effort to switch to a repayment mortgage, make overpayments or save up some case elsewhere?

The NRAM SVR is lower for the vast majority of their customers than the figure stated on the mortgage offer / key facts document at the point of sale. For others it is exactly the same. You have cheaper mortgage payments than you expected.

There are many building societies with a higher SVR than NRAM.

Blame the government, blame the banks. Makes no difference. Take action specific to your own debt to resolve this. Don't sit around thinking that a couple of clicks on a web site will make your life any different.

I do think posts like this are a little insensitive and not particularly constructive. I hope they are well intended, but believe when you feel trapped by a situation it is sometimes difficult to see the way out - which is why people use this forum.

Speaking from experience with NRAM, the svr is higher than several other mortgages that friends and colleagues have. Remortgaging is the obvious answer, but only when the equity is high enough and products are available. Since 2008 this has not been the case.

To anyone else in this situation, the best approach I've found is one goal at a time. For me that's paying down credit cards first with as much overpayment as possible, then I will focus on mortgage. If rates rise I suppose I will simply have to redirect my card overpayments to pay the mortgage.

Hope that helps