a little help and advice needed plz

stevenha

Hi

Before the credit crunch happend we seeked advice about what we could borrow if we were to sell our flat, our mortgage provider is Northern Rock (ouchy!!).

Well this is the story.

NR told us in June that we could borrow anything between 210k - 275k depending on our credit status (its very good credit report on us) if we sold our property at est £180k.

Our combined salaries are:
£55,000

We left it for a while and put our property on the market in December, it sold for the full asking price in two weeks (very lucky believe me!)
Our property has just sold for:
£185,000, this gives us an equity of £27,000 as our mortgage left is £158,000

Now I am a little worried because of the credit crunch has made banks reduce their borrowing. I recently went onto NR and done a calculator on what we could borrow and that is £152kish.....WOWZER!! how did NR come up with a previous figure of above?????

Can anyone advise us as we have just put an offer £237k on a house which has been accepted (13k below asking price) and will need a mortgage of £220k....I cant call NR as they are closed and we are now VERY worried... We want to use 10k of our equity for costs etc.

Any advice would really help. If you need more info plz ask.

Thanks

Steve and family

selectcase

All you can really do is shop for a mortgage on wednesday when things are open again and see what you can realistically borrow now - if its not enough then be honest and withdraw the offer asap. I am sure the vendor would rather you were honest.

Melissa177

Also, what companies put as their calculators on websites is often very different from what they tell you when you talk to them.

clutton_2

NR seemed to have offered you up to 5 times your salary - this multiple is rapidly being withdrawn as the credit crunch tightens. Realisitically - could you honestly afford those repayments if interest rates went up 2% ?

stevenha

clutton wrote: »

NR seemed to have offered you up to 5 times your salary - this multiple is rapidly being withdrawn as the credit crunch tightens. Realisitically - could you honestly afford those repayments if interest rates went up 2% ?

its 4 x our salaries which i dont think is too much of a commitment. IF intrest rates go up 2 % which is unlikely atm we would be in the same boat as anybody else but we are deff prepared if they do.

Melissa177

At the moment, who knows what IRs are going to do - plus, the banks might not necessarily link their rate to the BoE. If I was the chief exec of NR, I'd whack up my variable rate and start getting people to cash in their mortgages and go elsewhere, NR need the cash that badly.

Unless you're going for a fixed rate, I'd be very wary of getting a mortgage with NR right now. Have you tried other lenders?

clutton_2

""borrow anything between 210k - 275k" - combined salary of £55k ...... 55 x 5 = 275

stevenha

clutton wrote: »

""borrow anything between 210k - 275k" - combined salary of £55k ...... 55 x 5 = 275

agreed but if u read my first post the mortgage we are aiming for is £220k.....

stevenha

Melissa177 wrote: »

At the moment, who knows what IRs are going to do - plus, the banks might not necessarily link their rate to the BoE. If I was the chief exec of NR, I'd whack up my variable rate and start getting people to cash in their mortgages and go elsewhere, NR need the cash that badly.

Unless you're going for a fixed rate, I'd be very wary of getting a mortgage with NR right now. Have you tried other lenders?

We cant look for another mortgage right now because we have a tie in early repayment fee of over £4k, our mortgage is up for remortgaging at May 08, thats when we will go with another lender for deffinate.