NRAM Together mortgage - settling on sale of property

tomt

H all,
I've a Northern Rock (now NRAM) together mortgage (Secured mortgage + unsecured loan). My property is now in negative equity taking into account the whole balance, but the mortgage portion is lower than my estimated sale price if it sold now.

Unofficially, on the old Northern Rock telephone line (a few years ago, and the guy said 'I'd have to check with my manager' but I didn't have time to hold on) I was told that if I sold my property the entire sale proceeds would have to go on the loanS, so if the sale was more than the mortgage part, the balance had to go towards the unsecured part.

Now don't get me wrong, paying off my unsecured bit is a good thing, seeing as the rate jumps a lot if it is separated from the mortgage part - but is that advice above correct? Or could I keep the balance as cash and keep my unsecured loan as it is?

Anyone had any experiences?
Thanks in advance if you can help.

Crashandburn

Only the secured part is paid off.

Never heard of them taking some of the unsecured loan before. As you say, this will go to a higher default rate.

Key for you though is that you borrowed 100%+ for the property, then ideally you should try and clear it off as this was the purpose for the loan.

Does the balance on the unsecured loan also include the rebate from the interest refund last month?

tomt

Cheers crashandburn,
Yes, I've had a few thousand knocked off my unsecured part - and if I use the sale price fully I'd still have a few thousand left, but I thought that by taking the cash from the sale that might offset not getting cash as redress from NRAM!

I've been meaning to fully read the NRAM redress threads and chip in if there's any group action etc going on but just been really busy for the past few weeks.

kaybo69

I'm in the middle of delinking now and have been told that the difference between the outstanding secured balance and selling price does not go against the unsecured part.
Ideally I would love to pay it off, but I am using the difference as a deposit on my new house. It's my only option unless I want to rent, which I don't !

Thrugelmir

kaybo69 wrote: »

but I am using the difference as a deposit on my new house. It's my only option unless I want to rent, which I don't !

The outstanding debt will be disclosed on the new lenders credit check. So may impact upon your application.

tomt

Thanks kaybo69 - good luck with your new place! (or finding one!)