Remortgaging from Northern Rock Together

tomjeffery

Hi,

Have been with Northern Rock for 2.5 years on their Together mortgage (part loan part mortgage). Was in a 2 year fixed deal which has now ended and looking at my options.

I initially borrowed £90k against a flat which i bought for £77.5k. The flat has now been valued @ £91k and the balance on the mortgage is £88k.

I am making overpayments and paying off £1k from the balance at the moment but the interest rate is at 7.75% or thereabouts on their SVR.

Any of the fixed rate offers are around the 8% mark so i don't benefit from going to one of their fixed rate deals - i'm just waiting and hoping base rate continues to fall.

Should i think about moving to a different mortgage lender?

The bad points that have put me off so far are:
i have a poor credit rating
the LTV ration on the property is poor
my balance is part loan and part mortgage (don't know if this complicates things)

Any advice would be welcomed

Thanks

kingkano

How much do you actually owe on the mortgage? Remember you can refinance the 2 parts individually..... I believe if you move the mortgage and not the loan from NR they do charge a punitive rate on the loan portion.

homer_j_3

last time I looked the unsecured loan was charged at about 8% above base rate so currently 13.5%.

If you were to remortgage then you would have to declare the unsecured loan as part of your commitments which may effect borrowing capacity.

Without seeing how bad your credit is, it will be difficult to see if there is a better option. I would get your credit file from https://www.creditexpert.com and then take that to a mortgage adviser to review and advise if there is anything better. You dont want to be doing uneccassary credit checks with a poor credit score already.

tomjeffery

i was hoping that i could just move the whole lot (loan & mortgage) as 1 large mortgage to another company so i would just have a normal 1 amount mortgage.

the values are as follows:
property worth - £91k
mortgage - £78k
loan - £10k

so would be looking for a £88k mortgage on a £91k property.

i am currently paying and slightly overpaying my mortgage which is resulting in £1k / 4 months coming off the balance, so in 1 more year the total balance will be about £85k, but then again the value of my property may have dipped as well.

am i trapped with NR's high rates or will someone else give me a near 100% mortgage at a better rate?

homer_j_3

You will only achieve mortgages with the LTV allowance you require with a good credit history at the moment.

Some people have a perception of their credit score which is all wrong.

For example, I had some clients who I arranged a mortgage for and their credit score was low - not because they didnt have credit or because they had been late with payments but because they were not on the voters roll. They thought they had good credit.

I had another client who was on the voters roll and had been late with 1 credit card but had a high credit score.

So you can see why I recommend getting your credit file and score from experian as this will give you a better picture. With this score and more accurate information, a broker will be able to quickly tell if something can be done.

cells

hand the keys back to the bank and tel NR to stuff their 8.5%



you can get 5% fixed for 5 years, but your sub prime so your paying more than 50% of "normal" people



are you sure you want to keep the house now that prices might be dropping?

homer_j_3

Yeah- go hand your keys back on a voluntary repossession. Let them boot you out of your home and then try and sell your house whilst what little equity you have in it disappears with charges and interest.

Seriously, ignore the above poster. If you can afford to maintain your debt and it is on repayment then you may have to face the fact that you have no choice but to stay where you are but as long as you can afford to service your mortgage then your home is safe and in the long term you will reduce your debt and you be OK - After all, when you have repaid the mortgage, your bricks and mortar will never be worth nothing. Its whether you view your home as a home or an investment.

You may have paid for it the more expensive way but if you keep your payments on time for 6 years then you will have a good solid address history and credit rating. Handing your keys back is not the solution as you will have to declare this in future applications for a mortgage.