northern rock together mortgage nightmare!

jen84288

Hi all - in need of some advice.

My partner and I bought our first home in june 2007. We were both 22 years old and put our trust in our financial advisor who advised us to take the 100% northern rock together mortgage. Ultimately it was our decision and I think we went into this way too lightly. (hindsight is a wonderful thing!).

Ok so we took at a mortgage for £118,500. About £12000 was loan and about £106500 mortgage. We started by paying interest only - being fresh out of uni and being our first home together we thought we'd see how it went. Turns out we could have afforded repayment so just decided to save the difference each month as when the housing crash happened we thought it might have been best to hold onto our money. We have since had a child and I have gone part time. Even though my working hours have changed, our joint household income has increased by 17k a year since we bought our house. Because of this we have been able to make cut backs and save £1000 a month and so far have done this for the passed 8 months. I know we are very lucky to b e able to do this but it feels like we are just getting no where. As house prices are decreasing we are only covering the negative equity so have no hope of ever moving. We'd love to expand our family but our house is just way too small. I have no problem waiting to have another child but I just dont see an end to this. The plan was to put the house up for sale early 2012 and by 2013 we would have enough money for our deposit for a bigger house and fees and moving costs (and a replacement car as our old car is coming to the end of its life). As house prices sink lower, i just dont see us selling our house in january for what we bought it for. I know this is our own fault for going into this blind but this is a hard lesson to learn. There is no chance of extending our home so it looks like we will be a 1 child family for what looks like the next decade! Maybe im being over dramatic but everything I read indicates that this is far from over. Any advice?? Any way we can move? We could make a loss on our home but our together mortgage loan would be at a silly rate of 13%. p.s we have no other debts except our mortgage and we have found several lenders who will lend us what we need for a bigger house with the deposit we'd have)

beecher2

There is light at the end of the tunnel if you're saving £1000 a month. Are you able to overpay by this amount, or are you saving it? If you're cutting the debt by £12,000 a year then I think your plan to move by 2013 may well be realistic - just keep plugging away.

jen84288

Hi we are currently saving it - not overpaying. I dont know what im best off doing - i just feel like i want to keep hold of our money rather than overpaying especially because if we can sell in jan I dont think we will have paid a significant amount to lower our payments before that time. Does anyone know how reliable zoopla is for valuations? They afre currently valuing my home at £107 k

hcb42

I dont find zoopla particularly useful but then I live on an old street where no two houses are remotely alike.

just keep saving and/or overpaying so you build up a surplus somewhere, regardless of the NR and what you were sold, you have still consumed those and had the benefit of not putting up a deposit then that you do now, kilds will have to wait unless you can afford more and all your dreams

Thrugelmir

By reducing your mortgage you'll be saving yourselves far more interest than your are earning.

Hanging onto your money makes little difference as you still have the mortgage debt. This will need to be repaid if one day you wish to move house.

danielley

You are not alone in being tied up in a negative equity debacle, but what does stand you out from the crowd is that you are in a good position that you have surplus cash each month that can make a real dent into your mortgage.

I know that it must be downheartening to see that you are paying off money that you think you will never see back, but if house prices do continue to fall, then when you are in a position to buy your next house, then the same principle of a lower price will apply to that new property and therefore you will not have to pay as much for the new house.

Good Luck with the saving, without seeing all your figures, It does seem like you would benefit from overpaying the mortgage, but I know that some people prefer to see the cash in the bank as 'ready money' Do NR allow you to drawback on overpayments like some lenders?

Beatmould

I see there are loads of people with problems with NR, my sympathies to you all. I wonder if anyone can help.
I took out a NR together mortgage 5 years ago, I want to sell as we bought 1 bedroom, but since then we have had a son and the house now is getting to small. The idea was to keep the house, but it no longer makes sense. My question is my outstanding balance is £158k, £130 mortgage & £28k unsecured loan. We also have a secured loan, if i was to sell the house I have been told I need to pay the secured loan off, but NR also have said to me that the unsecured loan would have to be paid in full.

Anyone know what my options would be.

kingstreet

Beatmould wrote: »

I see there are loads of people with problems with NR, my sympathies to you all. I wonder if anyone can help.
I took out a NR together mortgage 5 years ago, I want to sell as we bought 1 bedroom, but since then we have had a son and the house now is getting to small. The idea was to keep the house, but it no longer makes sense. My question is my outstanding balance is £158k, £130 mortgage & £28k unsecured loan. We also have a secured loan, if i was to sell the house I have been told I need to pay the secured loan off, but NR also have said to me that the unsecured loan would have to be paid in full.

Anyone know what my options would be.

Please answer in poster's own thread rather than in here.