Northern Rock Together Mortgage

INNEEDOFHELPMUM

Hi I am new to this so hope this makes sense!
I am in need of some advice and dont know where to turn! Me and my partner looked into getting a mortagage in 2007 and with no deposit we were told Northern Rock were the only ones who could help! We rang Northern Rock took all our details and told us to look for a property so we had an idea of what we needed! We went into a local estate agent who advised us they had a mortgage advisor who could support us through the process as first time buyers. We spoke to her and she advised us to cancel anything we had started with Northern Rock.
Cutting a long story short she advised us to consolidate debt and take out an interest only mortgage, totalling £201,000 consisting of 30,000 unsecured and rest as the mortgage! Dont get me wrong we signed the paperwork and do take responsibility but do feel we were set up to fail! We asked questions like what happens after the fixed rate and she reassured us 'just fix it again' or get a better deal, we did ask about a repayment mortgage but she said it would be to tough! She advised us to get on the ladder increase our credit rating and we would be in a better position when we come to end of deal! How naive we were! We didnt even know what SVR was and she never mentioned it even when we said what happens at the end of the deal! Thanks God when we came off our deal the SVR was lower because if the credit crash hadnt happened our payments would have gone from 1,083 to over 1,200, not once did she give us an illustration of this!
As we received our paperwork through the mortgage application we took it to her and said we dont know what any of this means and she reassured us and said dont worry its standard stuff ill explain all you need to know!
We came to the end of our fixed deal and went onto the SVR which makes our payments lower of £815 which has been a blessing as we have had our second child and im currently on maternity! Im now loosing sleep worrying about the future as dont know what to do next, we cant remortgage as have no equity and are vunerable to the base rates rising, im desperate for some impartial advice on what to do!
My partner earns 35,000 before tax and im on approx 7,000 we will also have to pay childcare when I return to work! We have never missed a payment on anything and want to pay our debts! I really dont want to be forced into an IVA or Bankruptcy! What does our future hold! Until our deal ended we were blissfully/Stupidly unaware of what will happen, is it inevitable we will loose the house? Please help, what are our options? If someone would take the time to read our story and give some advice I would be very grateful as I really dont want to loose our house and the security for our children! Any more details you need please say!
Thanks

Thrugelmir

Think long term. You obviously wish to keep your property. So as difficult as it might be you need to start repaying the capital balance you owe. Even by a small amount each month.

Pay a visit to the Debt Free Wannabe board. There's great advice and support on there on how to save and survive on very little money.

Think positively and you will get there. Good luck.

hcb42

as your payments are now cheaper than they were, then I would pay that as capital repayment each month to start with. That was an expensive lesson for £30k unsecured borrowing. Or use a calculator to figure out what the payment SHOULD be on a repayment basis and work towards that, as otherwise you are living in a house effectively you cannot afford or are never paying back.

I thought mortgage offers showed the SVR anyway, i.e. 60 payments at x followed by y payments at £z.......every time I have mortgaged it has shown this very clearly.

Jojo1daffy

Wasn't the £30k unsecured loan to consolidate debts in 2007? Have you accrued more in the past 3-4 years then? My advice would be to not panic about the future but make a plan. Sit with all your bills and a calculator and go through and organise your income and expenditure, and work out how much extra (if anything) you have to clear the debts which will be on a higher interest rate than your mortgage. If after that you have anything spare, pay that off your capital. Make yourself a clear plan/budget of what you can afford to pay, be aware of where your money goes, and take control - that will help you get back on track and help you stay straight in future.

INNEEDOFHELPMUM

Thank you for your responses, the 30k was to cover all expenses stamp duty, legal feesetc plus cosolidate exsisting debt, we have not accrued more debt since we have had the mortgage, we have a credit card with 0 balance! We have been saving a little every month and have now saved 4,000 but as im currently on maternity, we have kept this in my ISA in case we need a cusion! As first time buyers we did not understand the jargon and relied on our brooker to explain all we needed to know as promised! Stupid we realise now and a harsh lesson but put our trust in what we thought wasbthe professionals! At the current time we seem to be breaking even each month, depending on other halfs bonus but as im not bringing in any money its tight, hence why im loosing sleep about our future! Cant help but look at my children and feel guilt that we made stupid decisions! At the time thought we were providing security for our children! Our mortgage is for 35 years interest only! What should we do with the 4k saved? Is it inevitable its doom and gloom for us?

poppy10_2

INNEEDOFHELPMUM wrote: »

Our mortgage is for 35 years interest only!

When you took out the mortgage, how were you planning to pay it off?

INNEEDOFHELPMUM

When we took out the mortgage of course our aim was to own the house and provide security for our children but we were advised to get on the ladder starting with interest only and was advised against repayment to start!

dimbo61

Use the website " whatsthecost" to work out how much extra you will have to pay if the interest rate goes up by 1/2% or 1%
you have not give your current mortgage balance or interest rate so I cant work it out for you !
You need to look at every single penny you spend and how to make savings
This is a great website for making you hard earned income go further and claiming any benefits.
You have built up a small nest egg and this will help if the mortgage go up £50/80 a month so stop worrying as you cant do a thing to change the BOE interest rate just how you spend the family budget!

Thrugelmir

INNEEDOFHELPMUM wrote: »

When we took out the mortgage of course our aim was to own the house and provide security for our children but we were advised to get on the ladder starting with interest only and was advised against repayment to start!

I think Poppy10's comment is along the lines that some 4 years later you haven't yet started to repay the debt. Nothing inherently wrong with interest only mortgages providing you have a longer term plan.

crazyhazy

You say you are on mat leave at the moment, how much longer will you be off for and have you worked out finances for when you return?

I think you need to take a look at your monthly outgoings and see if there is anywhere you can cut back and then with anything extra you have start putting extra into the mortgage. With the £4k I would pay it into the mortgage, do check with northern rock but we have the same mortgage and we are able to borrow back any overpayments so if you needed the money suddenly am sure you could access it. Also, call and ask what your payments would be if you switched to repayment and aim to try and pay this each month. What is your property worth at the moment, have prises fallen dramatically where you are, how much negative equity do you think you are in?