northern rock - together mortgage - negative equity

bigbear10

hi

i no there are lots of threads on this situation but non of them seem to have been updated in some time.

Myself and my wife took out a northern rock together mortgage in 2007. we have £92,500 secured and £26,500 unsecured, totalling £119,000 over 35 years. we were on a 2 year fixed and that came to an end in april 09. i bought the masonette for £97,500 and pay £609/ month (£450 being mortgage, £150 being unsecured loan)

I would ecpect the property to be worth what i paid for it. i have done the kitchen, bathroom and redecorated. i would expect the rennovation to at least balance out the decline in the market.

I would like to remotgage so i can go back onto a fixed for a couple of years at the current low rate of interest but as i have a unsecured loan with northern rock, if i moved my secured 92k my 26.5k would go up 8% to approx 13%. this would double what im paying for it now. This would also mean i would pay back approx £100,000 over the term of the loan (35years)

I do make over payments but nothing substantial to make a big enough dent in £26k for the near future

I could go out and get a loan for £26,500 but this doesnt exist, as you cant legally have a unsecured loan for more then 25k. (to my understanding)

Is there anything i can do?
Are northern rock able to enforce a unsecured loan for £26k?
Is this responsable leanding?



Thank for taking time to read this

Lewis

_Andy_

Why would it not be responsible lending?

Thrugelmir

I could go out and get a loan for £26,500 but this doesnt exist, as you cant legally have a unsecured loan for more then 25k. (to my understanding)

The answer to this is that Unregulated loans are not governed in any way by the Consumer Credit Act 1974 or any subsequent legislation. The criteria governing the lenders are not quite as strict as they are, quite literally, unregulated in many aspects. This applies to all loans above £25k.

So yes they can enforce the debt and you'll have no right of appeal if you believe that you are unfairly treated. For e.g. appeal to the FOS.

Suggest you continue to overpay the unsecured element of the mortgage. It will take time to reduce the balance but stick with it. If possible reduce your spending for a period (3 - 6 months) to an absolute minimum. Using any savings to make a reduction in the debt. This way you'll accelerate repayment of the debt.