Re mortgage with additional loan

elster44

Hello

I'm hoping someone can offer me some advice on remortgaging with a loan attached to the mortgage.

I am almost at the end of my 5 year fixed rate period on my mortgage with northern rock. When i started the mortgage we also added a loan to the agreement for the duration of the mortage (35 years).

As we are coming to the end of the fixed rate period i wondered if anyone could advise if the loan would cause a significant problem if we tried to remortgage?

The mortgage was 100% just before the credit crunch arrived. Whilst i have no problem paying the monthly payments on the mortgage and loan i am concerned that the loan part will cause me a problem when i either remortage or want to buy a new home.

I'm not really sure how all this works so any advice from anyone who may have experience in this area would be gratefully received.

thanks

beecher2

If you give a bit more detail - amount of mortgage outstanding, amount of loan, and the realistic value of the property, someone will be able to help. It might be possible to remortgage the 'mortgage' part with a different lender, while keeping the loan with NR - the rate of the loan would go up though.

One thing to note is that you will have paid off very little of the capital since you have a 35 year deal so you might find that even while discounting the loan your LTV is to high to remortgage elsewhere.

elster44

Thanks for the advice.

The amount of mortgage outstanding is just under 129k. the amount of loan outstanding is just under 27k. The value of the property is approx 137-138k.

beecher2

I'm afraid you'll be unable to remortgage with those figures, unless you can overpay your mortgage by at least 5k (probably more as you may find the value of your property isn't what you hope it is) Overpay as much as you possibly can and see where you are when your Loan to Value is below 90%

elster44

Ok i thought that might be the case. Thanks for your advice.

Hopefully my payments will not rise when the fixed rate finishes!

beecher2

If you post a Statement of Affairs on the Debt Free Wannabee forum, you'll get advice on how to cut down on your expenditure in order to be able to overpay as much as possible. This will also prepare you for rate rises - as payments can only go one way and you want your debt to be significantly lower when they do.