help with northern rock remortgage

vv84

Hi was wondering if someone could please give us some advice if possible.

We are in our mid 20's have a baby and really need some guidance. We have a very high interest mortgage and due to being nieve and uneducated in finances currently have a 125% mortgage (100% mortgage and 25% unsecured loan with northern rock - although now nram following company split etc)

We payed 87,500 for our house just before the crash in the market in 2007 the house is probably not worth anywhere near that in the current market and the 5 year fixed term ends August 2012.

We are really concerned that come the time to remortgage at the end of the fixed term we will be unable to due to having negative equity and the unsecured debt. Our current rate is 6.79%!!! would this reduce after the fixed term? Our current monthly payment for the mortgage and unsecured loan is £750 per month (its a 2bed ex council house)

We have been extremely silly with our finances and made some really bad decisions - on the other hand had we not taken the mortgage when we did we would still be living with our parents.

sorry for the long post but any advice anyone could give us would be great as we are really feeling quite out of our depth with this.

thanks in advance

Thrugelmir

If you afford to , pay more off your mortgage every month. In the longer term you will get out of being in a negative equity situation. This will give you opportunities to remortgage.

No easy answers I'm afraid.

vv84

thanks thrugelmir would it be likely that the interest rate would go down on the mortgage if we need to keep it on? (we are worried it might go up!!!)

glimmerofhope

Hi
I was (still am) in the same trap as you
My fixed term ended in Jan 2011 and I reverted to the standard variable of 4.78% (I was on 5.89% on the fixed rate). I would assume that your monthly payment would reduce if you went down to the standard variable or you could continue to pay as you are at the moment reduce the debt and then look around for a remortgage deal

Might be worth calling NRAM and ask what the monthly payment would be based on their standard rate (I recall they told me they don't offer any fixed rates)
HTH

erdd2

vv84 wrote: »

We have been extremely silly with our finances and made some really bad decisions - on the other hand had we not taken the mortgage when we did we would still be living with our parents.

And on yet another hand, which financial advisor/mortgage advisor assisted you make decisions about your finances and "assisted" you into this position? Whilst you sound willing to accept responsibility for your part at such a young age, unfortunately your "advisor" like most will not reciprocate. Darn expensive lesson that I do hope you get asistance to cope with.

vv84

Thanks for your help - we will try and keep paying the higher payment once the variable kicks in because as youve both advised the only way out is to try and pay off quicker.

we were considering using cccs for our unsecured debts as they estimated could pay off all our unsecured debts in about 6 years (if circumstances improved could be sooner) but we are a bit reluctant as we assume this will prevent us getting a mortgage once the 6 years is over.

thanks again

erdd2

glimmerofhope wrote: »

Hi
I was (still am) in the same trap as you
My fixed term ended in Jan 2011 and I reverted to the standard variable of 4.78% (I was on 5.89% on the fixed rate). I would assume that your monthly payment would reduce if you went down to the standard variable or you could continue to pay as you are at the moment reduce the debt and then look around for a remortgage deal

Might be worth calling NRAM and ask what the monthly payment would be based on their standard rate (I recall they told me they don't offer any fixed rates)
HTH

I have a fixed rate with NR.

OP shop til THEY drop as there are deals out there much more suited to you!

erdd2

vv84 wrote: »

Thanks for your help - we will try and keep paying the higher payment once the variable kicks in because as youve both advised the only way out is to try and pay off quicker.

This is not the only way out, albeit one way out.

vv84

Hi erdd2 the 'advisor' in question has a very shady reputation - a financial advisor had a look at our paperwork about 2 years ago and was stunned that they had charged us £1,000 extra for arranging the mortgage for us even the the estate agent that he worked for/with already pay him that fee also the financial advisor told us the 'gentleman' in question was a complete crook with a bad rep and was no longer in business.

SkintGaz

Had my mortgage set up thru a local company that dealt with applications for new builds by Barratt (Mortgagetalk) - now we're in the neg eq boat and we NEED to move....

I have had NO joy from NRAM who're managing our acc (we'll call back in a couple of days they say, and don't) - we have a total of 102,395 owing on property, most of which comes from 70 odd grand owing on the house and the rest was on an unsecured loan we took to help pay for a few things here and there plus aid with fees etc.

I was advised at the time, (and am still none the wiser as to the accuracy of this) - that if I move house, the MORTGAGE has to be sorted out, but the loan does not as it is unsecured (states this on my legal stuff) - I can't get a straight answer from anyone....

NRAM sent a letter when I asked for help on the possibility of porting, saying it was the whole balance that needed to be paid, I think they're just trying to make me pay up....

Incidentally, the reason we need to move is purely for our kids health (won't bore with details) - we've seen a house around 79k and ours has been valued consistently at 84k.... Just want to know our options so to speak...

Anyone any ideas?

Thanks;

erdd2

vv84 wrote: »

Hi erdd2 the 'advisor' in question has a very shady reputation - a financial advisor had a look at our paperwork about 2 years ago and was stunned that they had charged us £1,000 extra for arranging the mortgage for us even the the estate agent that he worked for/with already pay him that fee also the financial advisor told us the 'gentleman' in question was a complete crook with a bad rep and was no longer in business.

You could ask for the regulators to investigate the charges....even if the advisor has left the industry a network (if ifa) or employer will have some form of conditions to hold him accountable. I understand that extra stress of complaining may not be what you need/want...just a thought.

I do wonder if this the best deal for you at the time...have someone look over your KFI