Help! Mortgage advice needed

groby1982

Hi all,

I'm in a situation where I need to sell my house quickly but I fear I may have to come off the property ladder as my options might be limited.

I got my mortgage with Northern Rock in 2007 and it was a mortgage plus loan deal which no longer exist. I still owe £127,000 on the mortgage and £28,000 on the loan but my house is worth £130,000.

Will I be able to rent the property as the rental is valued at £550 a month but my payment to NRAM is £683 (£505 mortgage and £178 loan)?

Will I be able to sell the property and move house or will I need a 10% deposit for any new house I find even if I stay with NRAM?

Or finally, do I have to sell the house and pay the mortgage but still be left with the loan and no house?

Any advice would help.

Thanks, Chris

kingstreet

You can borrow the same amount, or less, from NRAM. They can't do increased borrowing. If your Together product used a 95% secured element, you can have 95% again. If it was 90% at the outset, you can have 90%.

Consent to let - you'll have to ask them.

You can repay the secured element of the Together package, keeping the unsecured element running delinked. If you do this, the rate on the unsecured element increases to about 12%. However, with little equity to use as a deposit, taking a new mortgage with another lender is likely to be impossible.

If there is any chance you'll sell the property with insufficient funds to repay the secured element, you'll need NRAM's approval to sell at that price. This is because they can refuse to remove the charge and prevent you selling if you don't get prior approval.

groby1982

So If was to move house and the sale of mine paid off the mortgage, could I then get a new house at a lesser value (still using NRAM) and also still have the unsecured loan without having to pay a 10% deposit?

kingstreet

Yes. If you purchased your current property with a 95% secured element, you can have 95% of your next property too.

If you do keep the unsecured element linked to a NRAM mortgage, the rate will remain at the standard, 4.79%.

It's subject to status and valuation again, of course.

Not much fact here, but some info;-

http://www.nram.co.uk/en/customers/mortgages/other-enquiries.aspx

groby1982

Fantastic. Thank you

groby1982

I've now heard from NRAM who tell me that to port my mortgage and unsecured loan, i'll still require a 5% deposit on a new house as they don't offer 100% mortgages.

Do I have any other options or am I going to have to sell my house and come off the property ladder as I have no way of obtaining £5-6k?

My credit score is bad after being out of work in 2010 and having to agree reduced rates with lenders.

kingstreet

As I said in both my earlier posts, if your original secured element was 95%, you can have 95% of your next purchase price, provided it's the same or a lower mortgage amount.

That means you'll need a 5% deposit.

Selling and renting appears your only option, based on the information provided.