NRAM Mortgage and loan means no negitive equity

Bigkev999

i called today to pay my monthly payment and got chatting the the lady on the phone.

im in a bit of a sad place when it comes to property. in Aug 2007 the housing high i took out a 101% mortgage 180K repayment mortgage and 12K unsecured loan. for a property worth 190K

due to the housing market getting wild my place is now worth 180k with people looking in the area

iv missed a few payments over the years and my current balance is 191.5K 179K and 12.5K iv been on a downer thinking if i walk away from the property then im going to be left with a big bit of money owed as they will sell it for cheap.

further to discussions today only the 179K is fixed on the house and i can just take the 12.5K with me as a loan its like £49 for 30 odd years remaining and i can over pay with no penalties (rate will change to 8%). this means now that if i do chose to move on and just rent the property i would like then i could sell up for the 180K pay the mortgage and acknowledge the 12.5K loan at £49 month.

knowing this now i do not feel trapped in my home and its given me a bit of good news knowing that im not paying for nothing and things should be good in 4 years when CCJs are gone and im really in some equity.

its crazy now its easier for me to move (less the 12K ) i dont want too and feel better about it all.

kingstreet

The rate doesn't change to 8%.

It changes to NRAM standard variable rate, 4.79% + 8%, or 12.79% in total.

In principle, yes, you can repay only the secured element when you sell the property and keep the "delinked" unsecured loan and pay the higher rate.

It's worth remembering, if Northern Rock or NRAM CCJed you for non-payment, the unsecured loan may now be subject to a charging order which means it MUST be repaid on the sale, as it is no longer unsecured.

kingstreet

The monthly payment will be £133 for £12,500 at 12.79% interest-only, or £136 capital & interest over 30 years.

Thrugelmir

Bigkev999 wrote: »

its crazy now its easier for me to move (less the 12K ) i dont want too and feel better about it all.

Unless you start to repay the capital owed. Then you'll remain stuck in a rut. At the moment you are doing little more than renting the property. How you tackle this is totally up to you.