End of Deal with Northern Rock - Help!!!

moneysaver83_2

Hi, We have a mortgage with Northern Rock and the deal is up next year in June.

We would really like to move from Northern Rock as our mortgage is made up of the mortgage and an unsecured loan. I didnt really know too much about mortgages when i got this out as I was younger, and didnt really realise what it all meant.

I have just been speaking to our financial advisor and he has told me that our property needs to be valued at 10% more than Northern Rock initally lent us. They lent us £158k so that means our property needs to be valued at £173ish. I have not had our house valued, but i very much doubt it is going to be valued at this. I would say maybe £169ish.

We are not in negative equity, which is good.

I dont know what we can do now - does this mean we cannot get out of our Northern Rock mortgage?

Help!!!!! x

Thrugelmir

Hi,

Unlikely you'll be able to remortgage with such a high LTV.

Can you afford to overpay the unsecured loan at all? Even by a small amount every month.

moneysaver83_2

This is such nightmare.

Sorry what is LTV?

The repayments every month are : £1100, and thats really expensive compared to a couple i know who have just got a mortgage with another company - their payments are only £800 odd.

We will however be able to move onto a diffferent mortgage rate in June, so I hope it will be better?

We might be able to afford to pay a bit more to the loan. I didnt really know what I was doing when I took this mortgage out, and the broker just told us it would be fine. And its not really!

Thrugelmir

LTV = Loan to value.

So if your mortgage is £158k and the property is worth £169k.

Your mortgage is 93% LTV.

Hence why your FA said 10% more. As the main mortgage lenders deals are 90% and below LTV.

Does your mortgage repayment rise or fall next year? i.e. is your fixed rate higher than NR's current SVR (standard variable rate).

moneysaver83_2

I am not sure to be honest. Our rate is approx 6%. I hope that we would be able to get a better deal.

Do you think there would be any way we could get rid of the loan by getting a mortgage to the full value of the property e.g. we have £145 mortgage, and £12k unsecured loan. We both early a lot more now, and could get a full mortgage for e.g. £158.

Is it possible for Northern Rock to change the mortgage we have to get rid of the unsecured?

So many questions! Thank you for helping me :-)

Thrugelmir

NR was split into two parts earlier this year. Do you know which part your mortgage is with?

If you are paying 6% currently. Then its possible that your monthly repayments will drop by 1% or so next year when the fixed rate ends. Providing that interest rates remain unchanged.

If your maintained at least the current level of repayments that would mean paying off another £125 in capital every month. Doesn't sound much I know compared to the total balance owed. But its a start in the right direction. As every month you'll be paying less interest and therefore more capital.

As I said earlier any amount you can afford to overpay as well will accelerate the process. Buying a house is a marathon not a sprint.