NRAM Letter received today re: new annual payment review. A reason to be concerned?

bunchy

Hello,

I was wondering if anybody else has received a letter from NRAM today saying that they have introduced a new annual mortgage payment review, which may contain a change to the monthly payment amount, but it was fairly sparse in information and wasn't a tailored letter to say what this may mean to us in particular (and the offices are now closed).

Does anybody else have a better understanding of this? I'm quite concerned that our monthly amount may rise above what we can manage.

Thrugelmir

NRAM cannot force anything upon you which isn't covered by the contract terms and conditions. Gradually the mortgage book has been sold off. One can therefore assume that they are looking more closely at the mortgages that are left.

Is your mortgage interest only? What are your plans to repay the mortgage. Over time interest rates may well rise so your outgoings could increase.

bunchy

Thank you for replying!

Yes, it's a former 'Together' mortgage consisting of an unsecured loan and interest-only mortgage.

My husband and friend took it out in 2006, as a 100% mortgage and had nothing in place to repay the mortgage at the end of the term, as they had intended to sell at a profit (ha, ha), but circumstances changed when the two of us met and later became serious and I took over the half of the mortgage his housemate had formally 'owned' and have been making regular over-payments (sporadically at first, but regularly and seriously this year, with the aim of the loan being paid off by next year and the mortgage balance being paid off approximately a year before the end of the term (all things remaining equal and unless we decide to get a better deal once the LTV is much lower) in 2031.

The house WAS in negative equality after the recession, but despite not having it revalued, from looking at similar properties in the area, it should be valued higher than what it was mortgaged for.

Sorry if this is too much information, but my concern is that despite having a plan to have the mortgage paid by the end of the term (we're paying more in over-payments per month than the required obligatory payment, though it hasn't been fixed or agreed, in case circumstances change, so just 'ad lib' as far as they are concerned), to NRAM, they may see that we only have 15 years left and hardly any capital has been paid off and they're going to force our obligatory payment, but you say that's not allowed?

[Deleted User]

bunchy wrote: »

they're going to force our obliquity payment

What is an 'obliquity payment'?

bunchy

Ha, ha, I meant obligatory! I'll edit my post now. :rotfl:

Thrugelmir

bunchy wrote: »

they may see that we only have 15 years left and hardly any capital has been paid off and they're going to force our obligatory payment, but you say that's not allowed?

Correct. Would go against their regulatory responsibilities as a lender. Duty of care etc.

15 years isn't a short period of time in mortgage terms. Vast majority of repayment mortgages still have a balance owing of somewhere between 20% and 40% of the original amount advanced with only 5 years left. That's the nature of the beast. Towards the end of the term the majority of the repayment is capital. The more you can scrap together to overpay the mortgage, the more interest you'll save over the longer term.

bunchy

Thanks for the reassurance Thrugelmir.

I guess I'll ring them in the morning and see what they can tell me!