Norther Rock pricing theselves out of the market?

iwassomeoneelse

You also need to remember that many customers aren't switched on enough to think of moving and will pay what NR ask - so it's worth their while to try it!

MortgageMamma

just to add, if your sister is self employed she should have two years accounts by now so she should not need to self cert - she may well be able to get full status on an ordinary mainstream product

OCDOCD

MortgageMamma wrote: »

just to add, if your sister is self employed she should have two years accounts by now so she should not need to self cert - she may well be able to get full status on an ordinary mainstream product

I'd wager most self certs nowadays are done by people who earn PAYE anyway.

homer_j_3

I would wager that there will be a certain amount of PAYE self certs but they will be around people with high bonuses and commissions or multiple income streams.

A lot of companies now will automatically do a full compliance check on self cert recommendations. If I do any self cert deals, I have to be satisfied that the income is accurate and will not do them unless I can see some evidence of the income.

That may sound a little daft I hear you say, as the whole point of self cert is because people cannot prove income supposedly. Well no, not really as I can satisfy myself of their income in a more flexible way than a lender will - i.e sight of bank accounts showing the money going through and/or invoices with paid receipts etc. I will keep this evidence on file too.

So I think the whole industry has tightened up, but no doubt there will be still some rouge traders out there just collecting the high commissions and fees to build up a nest egg for when they do get caught out.

Now, on a sep note I see Virgin are top draw for NR. http://news.bbc.co.uk/1/hi/business/7112481.stm

jinky67

Personally I think your sister was quite lucky to have been offered 6.99%.
At the mo we are on their SVR which is 7.59%.
AS you can imagine we are remortgaging to 6.09 BRT

Dan_Collins_2

Well clients have had it good for a few years, remember those chats with clients warning them that rates can go up and your borrowing to your max etc etc! Brokers get the blame so often yet most of the time we become order takers!

NR have borrowed money from the BOE at 6.75% plus so they cant offer 5.5% can they! BOE can make a lot of money out of this deal, just seems to be kept quiet at the mo!

poppy10_2

jane.canterbury wrote: »

The bit I don't 'get' is that sis is no greater risk now than she was when they chose to lend her the money.

She isn't, but Northern Rock is a much greater risk, so no other banks are prepared to lend to it. Thus they've had to go cap in hand to the government and borrow money at high rates.

They simply don't have the money available to lend to your sister, unless she is prepared to pay more in interest. They used to throw money at people, now they are having to be more restrained.

poppy10_2

Dan_Collins wrote: »

NR have borrowed money from the BOE at 6.75% plus so BOE can make a lot of money out of this deal!

Only if NR ever pay the money back (which they won't)

jamesd

Your sister is at liberty to stick with her original mortgage deal. Two years fixed, probably followed by Northern Rock's standard variable rate. That's the deal they offered and she accepted and that's the limit of their obligation to her. So long as they stick to that she's not being mistreated by them in any way.

She is getting a useful reminder of the implications of taking a two year fixed deal followed by SVR. If she wants to avoid a repeat she might look at life of mortgage tracker mortgages; those track at a set amount above or below the BoE interest rate. Variable interest rates but she can save the money when they are below fixed rates and use those savings to reduce the extra cost when they are above. Long term they can be cheaper than fixed rate deals with constant remortgaging.

Dan_Collins_2

poppy10 wrote: »

Only if NR ever pay the money back (which they won't)

They do have money and they started to change criteria before it went wrong. The money they have is from the BOE so it is at a rate that means they have to charge high rates. They do want to stay in the market and they do and did not throw money at people, they used good common sense when lending.

The BOE are not stupid, they know that NR is a good name and that when its brought out they will get the money back!