only paying the interest on a mortgage ?

iron_bored

How long have you known that this would be happening? From what you say, when you took on the mortgage you had an initial interest only period which then changes (now) to capital repayment + interest. Was this agreed from the start of the mortgage? When was the start of the mortgage? If you could give us some figures/rates etc it might help a bit to understand exactly what the situation is.

_Andy_

At 80% (thats even assuming the valuation holds up which it probably won't), you're very unlikely to find a lender who will take pure interest only (as in no repayment vehicle).

jungle_jane

OP, can you not simply re-mortgage with NR? surely they have other interest-only loans available?

I have to confess that i have never heard of an interest-only loan turning into a repayment loan...is this something that Northern Rock are still offering?

jungle_jane

Just to add- i have just looked on the Northern Rock site and noticed they have re-mortgaging packages that offer interest only, repayment and part interest/part repayment...they also have preferential rates for customers coming to the end of their deals.

What exactly have NR told you (in writing) that is happening? have they actually said 'you are being moved from an interest only mortgage to a repayment one?'

I would escalate the matter to someone more senior if they can't help on the phone...banks are obliged to help their customers to work out options if they are in danger of not being able to make their payments.

Thrugelmir

emmz29 wrote: »

i have sent a list of all my direct debits twice , which clearly shows i have no money for the mortgage to go up , the letter states ,that they are unable to proceed with my request and that my payments will continue to go up in december . i rang NR this morning who still refuse to see i cannot afford this . they have said , get a lodger , rent the house out or sell it . i live in the north where houses are not selling at present my neighbour has had his house on the market for a year with 2 viewings and not sold it yet , what i could get for renting the house out would still not cover my repayments and i would still need somewhere for me and my children to live . i am now looking into remortgaging my house , i have 80 percent loan to value in the house and need a good rate in order to still afford the payments on my house . i asked NR what would happen if i continued to pay my interest only payment and not the repayment part of the loan , they say month one i will recieve a letter with no action , month two i would get an adverse credit rating and month 3 they would start legal proceedings

Do you have any other debts besides the mortgage?

emmz29

i have had two years of interest only payments which i asked for as me and my partner split and i could not afford the payments on my own . i have seen a mortgage adviser back in the summer who said leave it as it is for now and then contact northern rock in september which i did .
really im just needing a better rate which i can afford im not asking to remain on interest only forever just to get an offer i can afford . my mortgage is 100000 , the house has been valued at 120000 max . at the moment my payments are 376 but will rise to 739 on the 1st of december
i want to repay my debt , and i dont want to be black listed . i am willing for the payments to go up but cannot afford 739 , if i can get a payment of around 500 to 550 i could maybe do it , i would struggle but it would be more realistic for me .

Thrugelmir

Have you asked Northern Rock if they will extend the mortgage term?

_Andy_

This is not viable - what is your plan in the longer term?

could you not just sell up?

jungle_jane

It sounds like the new NR rate is extremely high. i have a repayment mortgage of 100k - same as you - and that only costs £505 a month. My rate is about 3% or so.

it sounds like you may need to re-mortgage with another lender OP. that will incur fees, but some lenders are keen to get your business and will help you with those. Just make sure that with any new mortgage you take out, you are sure you can afford the payments when their special deal is finished as is happening to you right now...