Northern Rock Together Mortgage - moving to another lender

zuzuspetals

Has anybody else got any experience of this? When I took out the together mortgage in 2007 the broker told me that I could move to another lender after the fixed rate period, but I'm having problems with this due to the unsecured part.

This is what I owe:
unsecured: £10100
Secured: £57800

Flat was valued at £72k so I have about £5k equity. I currently pay £430 a month but have been on the svr for 3 years and am anxious to get on a fixed rate in case interest rates go up.

I'm wondering if I should just remortage the secured part and get a loan to pay off the unsecured part? Is this a better idea? Has anybody else done this?

I could get 2yr fixed 20 year mortgage with hsbc which would be £360 a month. A five year loan for the unsecured part would be roughly £190 per month.

Although I'd be paying more a month, I'll have finished paying off my student loans in April and another loan that I had for home improvements will be paid off then, so I'll have an extra £300 per month then. I'm really reluctant to take out another loan because I was looking forward to having that extra money and thought I might be able to go on a holiday for the first time ever!

I've got a £1300 overdraft too but I wasn't going to pay that off until I'd paid off my student loans.

Sorry for the long post. I live on my own and don't have anybody I can talk to about this. I've been worrying about it for a while.

sammyjammy

You have an LTV of around 80% if that valuation is correct, remember the unsecured section will not form part of a new mortgage unless you choose to incorporate it. If you keep the unsecured with NR what APR does it move to?

If you want to move to someone else you have no choice but to refinance the loan or keep it with NR (I have a feeling I've seen people mention rates of 13%+ if you leave it with them).

You should consider paying the overdraft off as some lenders will view it as you being unable to manage your finances well.

holly_hobby

Hi,

The way the Together mortgage was set up is that upto 95% of the loan was secured (aka a typical mortgage arrangement), with anything in excess of this unsecured (albeit charged at the same payrate as the mortgage).

So, the reality is the mortgagor would be in negative equity from day one - with obviously the hope that the property would increase in value, and by the time it came to sell, the sale price would repay the entire os debt (both secured and unsecured).

If the unsecured elmement can't be repaid upon property sale, the option under the Together Mge T&Cs, was that the mortgagor could leave the unsecured element with NR, albeit it would now be loaded to reflect personal loan rates (which is in essence what it is), although as I say whilst the mge is held, the unsecured interest rate would mirror that applying to the main mge.

So, you can leave the unsecured with them, obv this will now form part of your liabilities for status checks with alternate lenders you may choose to remortgage to. Furthermore, if the NR payrate will be high on the residual borrowings you have left with them, you may wish to consider alternative personal loan providers and lower rates, to fully cut your ties with NR.

Hope this helps

Holly

zuzuspetals

I can't pay off my overdraft just now. I'll be able to do that in April once my other loans are paid off.

I take it then, that there's no way I'll ever be able to remortage for the full amount (secured + unsecured)? Even when I thought my flat was worth 80k, I couldn't do that owing 67k altogether.

holly_hobby

As I said, you can leave the unsecured with NR - which will in turn be loaded to personal loan rates.

Hope this helps

Holly

zuzuspetals

I think I might leave things as they are until April when my student loan and other loan are both paid off. Hope to have paid off my credit card by then too, so I'll be in a better position when applying for a big personal loan.

I'll be charged £150 by Brittania because the mortgage isn't going through, but there's nothing I can do about that.

Just hope that interest rates don't leap up in the meantime.