Finally... a light at the end of the tunnel!!

tony863

Hi All,

I'm a long suffering NRAM customer who might just have the chance of switching to another provider :T

I've spoken with a mortgage advisor this morning and they've given me 3 options. I wanted to post them on here to see what people think as I have no prior experience of re mortgaging until now.

A quick overview of our circumstances are as follows:

Initial joint together mortgage with Northern Rock for £181k. This account was later taken over by NRAM and the mortgage has remained with them ever since on a variable rate of 4.78%. We bought our house in June 2007 for £167,000. We applied for a together mortgage with Northern Rock and was granted a 100% mortgage plus a loan amount to cover the cost of the deposit and fees. The term of the mortgage was 35 years on repayment. From memory, the mortgage was broken down as £158,000 mortgaged and the rest as deposit and fees.

Our current monthly repayments are split between the mortgage and the loan element. The mortgage is currently £793 per month and the loan is £112. The total is £905 per month.

We currently owe £168671. The breakdown of that is £147,510 for the mortgage, £20,910 for the loan and £250 discharge fee.

So having spoken to the advisor, here are the 3 options based on a valuation of £180k:

1. LTV rate 80% - mortgage of £147k for £666 per month fixed for 2 years - 2.95% apr. Free valuation fees, free legal, £495 arrangement fee. The loan would remain with NRAM initially at 15% apr with a view to me getting another loan to pay it off at a lower apr later.

2. LTV rate 85% - mortgage £153k. Pay off the mortgage and £5k of the loan. £694 per month fixed for 2 years - 3.20% apr. Free valuation fees, free legal, £400 arrangement fee. The remainder of the £15k loan would remain with NRAM initially at 15% apr with a view to me getting another loan to pay it off at a lower apr later.

3. LTV rate 90% - £162k. Pay off martgage and £15k to NRAM leaving £5k at 15% apr until I can get another loan. £783 per month fixed for 2 years - 3.6% apr. Free valuation fees, free legal, £595 arrangement fee.

My advisor reckons I should go with option 3 as this gets rid of most of the loan to NRAM at a rate of 3.6%. The other £5k would be a higher rate apr but should be lower than the 15% apr that NRAM are going to give me.

Any thoughts would be most appreciated

Thrugelmir

Can you afford to overpay? Better to do that than switch to a 15% rate on the unsecured loan.

While 3.6% looks attractive. It's only 2 years. What's the follow on rate after the fixed term has ended?

Use the £600 product fee charge plus the other costs you'd incur in remortgaging to reduce your debt immediately perhaps

amnblog

Bit baffled why you are a 'long suffering' NRAM customer.

Sounds pretty good to me.

tony863

Thrugelmir wrote: »

Can you afford to overpay? Better to do that than switch to a 15% rate on the unsecured loan.

While 3.6% looks attractive. It's only 2 years. What's the follow on rate after the fixed term has ended?

Use the £600 product fee charge plus the other costs you'd incur in remortgaging to reduce your debt immediately perhaps

I can't really tbh. I can afford roughly what I pay now but NRAM only offer a SVR with no additional options.

Good point about the follow on rate... I'll double check

It's more about getting something fixed before the interest rate rises and getting away from NRAM.

I'm a long suffering customer because this company has trapped many people on SVR rates with high value unsecure loans that revert to ridiculous apr levels if you leave them to remortgage. I'm not getting into that side of things... Please, let's just stick with which option looks the best. Staying with NRAM isn't even a consideration

tony863

Oh and I forgot to add... Once I remortgage I'll look at borrowing the loan amount from elsewhere on a better arp and over a shorter period of time.

As an example I'm looking at something like a 5 to 10 year loan as oppose to the NRAM loan that remained with the length of the original mortgage

tony863

I thought I'd have received quite a few replies by now:cool:

Any extra advice is most appreciated

Thrugelmir

tony863 wrote: »

I'm a long suffering customer because this company has trapped many people on SVR rates with high value unsecure loans that revert to ridiculous apr levels if you leave them to remortgage.

That's commercial grounds nothing more. As long as your mortgage is with them then they there's a degree of security over the debt. Once the link is broken then there isn't.

Northern Rock shall we say had loose underwriting criteria and allowed many people to roll unsecured debt into a long term loan. Granting them a mortgage at the same time. Only time will tell whether the taxpayer will pick up the pieces once the whole mortgage and loan books unwind.

You won't find many competitive rates for £20k unsecured loans in the market.

tony863

thanks for the reply... so which option would you choose? taking your comment into consideration, option 3 would probably be the best. Pay off £15k with the remortgage and get a 5k loan elsewhere

tony863

Thanks for all the advice.....not

Now I know why I rarely bother with this site. Mods, please delete this thread

Thanks