Mortgage Change with Secured Loan

CaptainNoise

Hi,

Apologies if this answer is elsewere or obvious but I'm a newbie!

I have an interest only NRAM mortgage I want to change, but I also have a secured loan. The Secured loan only has 16 years left to run so it seems silly to add it into a new Mortgage for 25 years. Can I get a new Mortgage to replace the NRAM product and leave my secured loan as it is?

Thanks in advance

CaptainNoise

Senior_Paper_Monitor

In principle yes (depending upon the overall picture) - but do you realise the interest rate on the loan will double (or similar - can't remember the exact figure off the top of my head) if you pay off the mortgage and keep the loan ?

TrickyDicky101

Hi

When your mortgage is repaid, the Secured Loan (currently under a second charge) is automatically promoted to first charge. Any mortgage you subsequently took out would then rank behind the Secured Loan.

Since no mortgage lender will permit their security to be on a second charge basis, you would therefore need to obtain a Deed of Postponement from the Secured Charge holder which will effectively allow the new mortgagee to 'leap frog' the Secured Loan and rank as first charge.

Not all mortgage lenders will accept second charges, however. Hence, you need to:
i) estabish whether the secured lender will allow a DoP
ii) establish which mortgage lenders will permit a second charge to exist

One for a mortgage broker me thinks.

TrickyDicky101

Senior_Paper_Monitor wrote: »

In principle yes (depending upon the overall picture) - but do you realise the interest rate on the loan will double (or similar - can't remember the exact figure off the top of my head) if you pay off the mortgage and keep the loan ?

OP has not stated Secured Loan is with NRAM? If it was part of the Together mortgage, then it would not currently be secured either (again, I believe this is correct from what I've seen on here ).

Senior_Paper_Monitor

Ooops - speed read the original (and assumed that it was a together product).


Tricky's answer is absolutely correct (based on the OP) - mine is a pile of poo !!!