Info please - remortgage, secured loan question

bigbongo

Hi there, been lurking for a bit and would now welcome some help/info. I have a 96k mortgage and 25k secured loan both with Northern Rock. Fixed rate is excellent until May 2008. Question is, if and when I remortgage what happens to the loan. Sorry if this is a daft question but have been checking out other deals today and need a bit of help.

Thanks in advance and ps house is worth 175k.

Mr_helpful

bigbongo wrote: »

Hi there, been lurking for a bit and would now welcome some help/info. I have a 96k mortgage and 25k secured loan both with Northern Rock. Fixed rate is excellent until May 2008. Question is, if and when I remortgage what happens to the loan. Sorry if this is a daft question but have been checking out other deals today and need a bit of help.

Thanks in advance and ps house is worth 175k.

The most likely thing assuming the loan is the same term as the mortgage is to combine them into one mortgage when your current deal ends and you remortgage.

Spudwud

There are different ways this can work;

Further advance - This is when you take further borrowing out with the same lender, which you have done, and when you pay off the main mortgage the lender will require you to clear the further advance as well

Second charge - This is completely stand alone to the mortgage and usualy involves a third party company, in this situation, you are not obligated to clear this if you remortgage your property, but their charge will automatically move to the first charge position and to get a new mortgage on the property the new lender would require them to postpone their charge so the new lender slot in to the 1st charge position.

There are also third, fourth, fifth charges etc, but the principle remains the same as it does in the case of a second charge in that each charge moves up one when a charge above it is cleared, unless they agree to postpone it.

In your situation you'll need to clear the lot unless you remortgage with Northern Rock themselves