northern rock?

ELIZA_D

hi all.......i am looking to remortgage and raise capitol to pay my partner out of our house (20k) my mortgage is currently 40k on an interest only.
I have been advised to go for a 10 year fixed flexi ith Northern rock as it is completely flexible in overpayments,transferring the mortgage if ever needed and has the ability to take mortgage holidays if they are needed also ( once a year i believe).
What do you guys think of this ...................the rate is 6.49%

Lipstick_2

What more do you want?

homer_j_3

I would get the "can transfer the mortgage if ever needed" part checked out.

Portability is never guaranteed and if your circumstances change , your next property not suitable to the lender or even if the lender changes their criteria - they are well within their rights to refuse this option.

At the amount you are borrowing there are more suitable deals out there in terms or rates and features, however, without knowing all the information that I need to make a decision on which would be best for you - I can not be specific.

I do apologise for Lip-JoeK-stick - he is a barred broker posting under a new name and once again is showing his true colours.

I would seek some advice as you may find that it could cost you a lot of money if you make the wrong decision.

ELIZA_D

mmm ,thanks,this advice was given to me by a whole of the market broker who has this mortgage himself and has been the advisor to my extended family for years. I am meeting with him next week to finalise things but i said i would look into it first. Would it be worth me getting another quote,sort of a get 3 quotes before you buy? or is this going to confuse me! :huh:

Rick62

Most portability options are potentially discretionary and are subject to meeting criterior on moving, Northern Rock is no different than other lenders in this respect. Where they are good is they say that if you need to change the amount when you move, including if you increase it, they will do so on the same product at the same rate.

Northern Rocks products are one of the best in terms of flexibility, where they let themselves down is all their fees can be a bit high and their rates have not been so competitive recently.

If you have a broker that you have confidence then ask him, go through the options of Northern Rock vs other lenders with maybe a better rate but less flexibility and decide on the merits. Also consider if you really want a 10 year fix, can you really plan that far ahead?

homer_j_3

I think that by getting a load of quotes you will potentially end up confusing yourself.

If you want a fixed rate and to be tied in for 10 years
If you want flexibility ot overpayments, payment holidays etc

then the product does tick the boxes. Do you intend to use this flexibility, if so, to what extent?

If you think you will move in the next 10 years then I would ask whether you would be happy paying the early repayment charge(4% in first 5 yrs and 4% last 5). If the answer is no then I do not think the product is right.

Looking at the interest rates and the loan size, I would hope that you were being recommended the fee free product which is currently 6.79%. You may qualify for a free valuation as part of the remortgage package.

As I said, without going through a full and thorough process with you, I cannot possibly tell you if this deal is right or wrong but I think you need to be comfortable and be clear on what you are getting.

I am not saying your adviser has got it wrong - i am always deeply suspicious of NR being advised as they rarely come top of the tree but there is nothing to say that they didnt with your specific circumstances.

Also remember - Whole of Market doesnt mean that they have access to ALL lenders. A broker can say they are whole of market with access to a minimal amount of lenders. All that term means is that they have access to deals that represent deals that can be found across the marketplace as such - so an adverse credit lender, a buy to let lender, a prime lender etc..

If your adviser does truely have access to every lender out there that will accept business from brokers then it should be a case of trying to get your requirements across to them and letting them see if this deal still is the best one.

Hope that helps.

ELIZA_D

thanks homer.............i would not be happy to pay this charge and do hope to move in years to come.He did state that this would be ok to do and even borrow more at the rate i originally borrowed ( he informed me of a client of his who had just done so).
He haS advised my aunt and uncle to go with northern rock,as my cousin,her sister in law and himself. He stated thet NR are the biggest lenders in the market with the best flexibility?

Rick62

Yes you can port the mortgage with Northern Rock without penalty and alter the amount at the same rate. The only problem is if you were to redeem the mortgage in full, eg to sell the property and move into rented for a while.

They are one of the larger lenders, but so what? They are about the best for flexibility but not great for charges and rates, so it all depends what your requirement are. I have used them a fair bit in the past, particularly for clients that need/want the flexibility but I also use other lenders a lot too. I'm a little concerned that your broker seems to suggest that they are the only suitable lender.

What fee does this product have and why do you need a flexible mortgage?

homer_j_3

Rick62 wrote: »

Yes you can port the mortgage with Northern Rock without penalty and alter the amount at the same rate. The only problem is if you were to redeem the mortgage in full, eg to sell the property and move into rented for a while.

What fee does this product have and why do you need a flexible mortgage?

Rick,

I didnt realise northern rock committed to promising portability without consideration to the clients circumstances at the time? Have I missed something here as I haven't done that many ported deals and the ones I have, have always gone through underwriting?

With a loan of 40k, I would assume no fee option as the difference in rates between that and the cheapest with a 2k attached will not be worthwhile paying even over 10 years..

Is this broker a NR broker - is that the only product they know - to be on it himself, to advise your family all on it aswell... It seems strange. I hope proc fees arent the driver here..

As I have asked and Rick too, How much do you intend to overpay by or what other flexibility do you require?

ELIZA_D

Thankyou all,
I think i want flexibility because it seems to be a good thing to have? I do want to overpay but wont be able to yet as i will be getting myself on my feet financially after my partner leaves. I am self employed and so can pay in some months and not others.
I have been advised to maybe take an extra 10k and pay this straight back in to the mortgage as i can draw this out at any time in the future without incurring any charges. There is a possibility that i will need a new roof in a years time and may need to draw on the mortgage again so this was a ppealing.
However what i need in the main is to reduce my mortgage so i can give my partner 20k without it crippling my threadbare pockets.
Thanks for your advice,

Rick62

Homer, did you not read the first line of my first post?; 'Most portability options are potentially discretionary and are subject to meeting criterior on moving, Northern Rock is no different than other lenders in this respect'.

Where NR are different is if they allow you to increase the mortgage on moving they will do so on the same product, i.e. same rate and end date.