Northern Rock End of Mortgaged Deal (Merged Threads)

Becles

I'm currently on a 5.99% capped rate with Northern Rock, due to expire in Jan 2009.

I know they don't want the mortgage business right now as their rates are incredibly uncompetative. What will happen now that the bank has been nationalised?

I was single and working full time when I took the mortgage out, so the loan and the house deeds are in my sole name. I've since married and had a baby, and I'm only working a few hours a week now so I don't have the income multiples to move elsewhere. Husband doesn't want to be on the mortgage. House is my asset from before we met, so he refuses to go on the deeds/mortgage.

I am worried what will happen when my rate runs out in January? Can anyone put my mind at rest?

Trying_to_be_good

You've got nearly a year before you will know what is on offer from Northern Rock - the news has just said that they're not looking to run down the business, so I would say don't worry too much about it yet.

Talk to your OH about why he doesn't want to be on the deeds/mortgage - if you talk about it now before it's decision time there'll be less pressure.

UK007BullDog

right on.

if your work/life situation stays the same he will have to be on the mortgage in 2009. why is he so anti mortgage?

toomanyshoes

I'm with NR too but my fixed rate has already run out.

I want to move as the interest rate is not competitive (none of the recent interest rate drops have been passed on) but due to personal circs I am not in a strong position at the moment financially.

This will change for me in the next few months (got an inheritance coming) but for now I am stuck and not happy but what can I do.

By the time yours runs out we will know a lot more (hopefully!). Perhaps mortagages will be sold on to other companies who can offer a better deal?

I dont know what can be done under this nationalisation but I guess its a wait and see sort of moment.

mircea

Hi
Received our letter today from NR saying our mortgage repayments on 1.6.08 will go up to £1048 on our Interest only together mortgage! our current payment is £798.

Ideally we would like to get back onto repayment but no way can afford it with NR! However, if we move our mortgage but leave the 'together part' with NR we will have to increase our payments on the usecured part as we are no longer with NR, is any of this making sense?

I am also worried about our credit rating, I am currently reducing my overdraft by £100 a month so by September i will have a £300 overdraft limit, we have no credit cards any more as we paid them all off. A loan which finishes in July and one which finishes in October next year, we have never missed a payment on any of them.

Do you think we should shop around for a better deal and if so are Charcol worth going to? Other option is we sell the house, pay £16k off the unsecured part with the profit from the house sale, move into rented and wait for the market to settle?

Any ideas anyone?

Thanks.

UK007BullDog

If you remortgage you will have to pay off the secured loan as well. Check the other posts about NR. You will understand what is going on and what we advised others in similar situ as you.

MortgageMamma

Its difficult to say what is best without knowing the ins and outs of your finances but you have ages yet, your deal doesnt go up until june this year, sit and watch what happens with NR and the market as a whole until end of March

MM

chappers

Agree with MortgageMamma i think the next few months will see NR becoming a bit more competitive again, in order to attract a few more customers.

Rachman_2

chappers wrote: »

Agree with MortgageMamma i think the next few months will see NR becoming a bit more competitive again, in order to attract a few more customers.

No, they won't - NR don't want any new customers. They desperately need to get the overall risk down. That means pricing their products such that people who can leave them and leaving only those unable to find a deal elsewhere with them - who are more likely to default and will be paying out far more interest than elsewhere and will effectively be left to stay with NRK or go subprime. Neither of which are palatable.

It will negatively affect a large number of MSErs - but please don't be deluded to think that the government wants to run a bank with that sort of risk. They need to get £110Bn (or as much of it as is possible, because they won't shift all of it) off the government's balance sheet as quickly as they can - the best way to do that is to make people leave them and so use mortgage advances from elsewhere redeem their loans - and believe me, the residual NRK owned loan book is as crap as it gets without getting as low as GMAC or Kensington sorts of things.

mircea

Hi
the 25% bit of the NR Together mortgage is unsecured not secured, have checked all my statments and are therefore not required to pay it off with the mortgage. Am reticent to stay sitting with them as I believe they are trying to recoup their losses through pricing themselves out of the mortgage market. But will give it a couple of months.

kingkano

Rachman wrote: »

No, they won't - NR don't want any new customers. They desperately need to get the overall risk down. That means pricing their products such that people who can leave them and leaving only those unable to find a deal elsewhere with them - who are more likely to default and will be paying out far more interest than elsewhere and will effectively be left to stay with NRK or go subprime. Neither of which are palatable.

It will negatively affect a large number of MSErs - but please don't be deluded to think that the government wants to run a bank with that sort of risk. They need to get £110Bn (or as much of it as is possible, because they won't shift all of it) off the government's balance sheet as quickly as they can - the best way to do that is to make people leave them and so use mortgage advances from elsewhere redeem their loans - and believe me, the residual NRK owned loan book is as crap as it gets without getting as low as GMAC or Kensington sorts of things.

The only problem with this strategy is that this will run NR into the ground. I find it hard to comprehend why they'd do this. They want to sell the business as soon as they can. Running it into the ground would get them no sale at all, ever. And probably a heck of alot of defaults. If the market falls they could make horrendous losses repossessing and selling the places on 125% or even on 90% LTV bought in the last year or so (assuming the market keeps depressing).

The trouble with having the horrendous rates is they only keep the bad business. Anybody with a decent credit record and 10% equity will be able to move away easily. The others which are bad risks is all the govt will have left. At some point they will need to get some prime business in or, again, the business will be worth nothing and we as taxpayers will be scorched horribly.

I think they have to at some point in the near future make their offers more competitive than they are now. Atleast for prime business?