URGENT - Northern Rock Mortgage Help

scottp_2

Hi,

This is not my problem but i am just trying to help someone out, so all your advice would be appreciated, i need to know by tomorow if possible.

Someone i know has just split with his Girlfriend who he has a Mortgage (with Northern Rock) and a loan with RBS. The mortgage is currently around £86,000 on a house worth around £103,000. It was a 100% mortgage as he had no money for a deposit. He is almost certain that he is fixed in for a few years, maybe even until 2010. His girlfriend has said he can have the house if he wants it, but he is unsure if he could take on the mortgage at its current amount (£500 a month). He wants to know if there is any way he could reduce the monthly payment of the mortgage. I thought about the HLC method, whereby once the LTV is less than 90%, you could ask to be taken off the HLC, would this be the case with a fixed mortgage? If so how does he go about it?

If not, then he is considering remortgaging over a longer term, would northern rock be able to do this?

Just want some information for him when i see him tomorow.

Thanks in advance!

homer_j_3

The HLC method?

If he is tied in there are 2 ways of making the payment less. Option 1 - ask to extend the term or Option 2 - ask to convert to interest only. Option 1 is a safer option as your friend will still continue to reduce the loan slowly.

If they are tied in then it will be unlikely that it would be worth their while paying the charges to get out of it.

lynnexxxo

Hi there

I reckon if he is only paying 500 quid a month for a 86k mortgage then he already had a pretty good deal.

I pay northern rock 430 for a 55k mortgage. Or mortgage is also fixed till 2010 and just the other day they told me the have a 3% early repayment fee, which on my mortgage is nearly £1650.

So in answer to your question I'd suggest he keeps his mortgage as it is and if he can't afford it get a lodger.

scottp_2

Higher Lending Charge, as he is still being charged the higher lending charge rate even though he is less than 90% loan to value.

Thanks alot for your help!

Muscle750

What interst rate u paying on a 55k mortgage at 430 a month, i think its time u moved lenders!!!

homer_j_3

you don't pay a higher lending charge. they will have to pay any erc's if they want to change their product onto a better rate. You will have to consider the fact that interest rates may be higher at the moment than the rate they are currently on