Northern Rock End of Mortgaged Deal (Merged Threads)

MarkyMarkD

Your mortgage isn't "up" in September unless (and this is incredibly unlikely) you actually took out a 5 year fixed rate for a 5 year term. Rather more likely, you took out a 5 year fixed rate over a 25 year total term (or something similar) meaning that at the end of the 5 years, you simply revert to Northern Rock's SVR which is not particularly high.

You won't lose your home unless you fail to pay your mortgage.

spidermev

Michael,

Come September you will revert to NRAM's SVR which is currently 4.79%. You didn't mention the interest rate you are on but chances are the SVR will be lower than what you are paying now. Which will mean you have slightly more disposable income.
HOWEVER, interest rates could well rise in that time and if the SVR goes above what you are on now then you will be paying more in September. If you can't afford to pay the increase they could "boot you out" but it's a long painful process.

Judging by when you bought and the mortgage you have I am going to assume you are probably in negative equity. If in September your rate goes down, use the money you save to overpay your mortgage and get yourself on a better footing for a remortgage further down the line. :money:

The best thing you can do is speak to them on 0845 604 4850, that's the number to ring them on if you are having troubles. Tell them what's going on and they may be able to offer some help. Be under no illusion though, they are a business not a charity. You borrowed it so you must pay it back.
Sorry to be the bearer of potentially bad news.

Hope you can understand this, reading it back I'm not sure how well it makes sense!!

semanticist

maxblumberg wrote: »

Does that mean if you were on a 6% fixed rate with NRAM and it expires now, you will get the (currently) lower SVR of 4.79%?

Max

If your fixed term expires you switch to the SVR, which may be higher or lower than your previous rate. For most people it'll probably be substantially lower right now, but it's a variable rate, so it could potentially change every month which makes it hard to budget for your mortgage payments.

The SVR hasn't changed in over a year (since I started tracking it on Twitter, see my sig for the link), but there's rumours that the Bank of England base rate might go up in the next couple of months, which would see banks raising their SVRs.

These are only rumours - even experts don't really know what'll happen until it happens, so I personally don't see a lot of point in worrying about it.

Bigchief

Hello,

My 5 year fixed term mortgage deal comes to an end in June 2012. I'm guessing from what i've read on here there is no way around the ERC that is currently in place?

We took this mortgage as my salary was based on the fact i was training and my salary since then has doubled.
When i purchased my house it was valued at 135,000 but as i bought it from a family member we got it for 120,000. This is made up of 100,000 mortgage and 20,000 unsecured loan. What is likely to be my best option when remortgaging?

remortgage the house and leave the loan with NRAM?
remortgage and get another loan to pay off the NRAM loan?
or will i be able to get a mortgage for the full 120,000 since my house was valued at 135,000??

Any help would be much appreciated.
Thanks

semanticist

Bigchief wrote: »

remortgage the house and leave the loan with NRAM?
remortgage and get another loan to pay off the NRAM loan?
or will i be able to get a mortgage for the full 120,000 since my house was valued at 135,000??

How much you'll be able to get a mortgage for today depends on your salary/expenses (which sounds like it won't be a problem) and the value of your house today. If it was worth £135,000 in 2007 then, depending on where you live, it's probably worth substantially less today.

A website like http://www.zoopla.co.uk should be able to give you an estimate of the house's current value.

As far as what's best to do: it really all depends on what interest rates you're paying now, and what interest rates you can get on replacement mortgages/loans. If you leave the NRAM loan and pay off the mortgage, its rate goes up a lot (on the order of 10%, I believe - so if you're paying 6.9% now it'll go to 16.9%, or thereabouts). If you pay off the mortgage you'll almost certainly get an ERC. But if you can reduce the mortgage rate enough then it still might make sense to do it.

I recommend going to an IFA and letting them work it out for you. They'll have a better idea of what products are available in the market right now.

ballybally

I'm currently with NRAM and currently on their SVR. Am I right in understanding that Northern Rock will not give us a new deal as we are with NRAM? It's not very clear, at least not to me!

semanticist

ballybally wrote: »

I'm currently with NRAM and currently on their SVR. Am I right in understanding that Northern Rock will not give us a new deal as we are with NRAM? It's not very clear, at least not to me!

NRAM won't give you a new fixed rate deal.

If you otherwise meet the requirements for an entirely new mortgage, you could get one from Northern Rock - or any other mortgage provider. If you don't (due to LTV ratio, income level, or whatever), then you'll have to stay with NRAM.

ballybally

semanticist wrote: »

NRAM won't give you a new fixed rate deal.

If you otherwise meet the requirements for an entirely new mortgage, you could get one from Northern Rock - or any other mortgage provider. If you don't (due to LTV ratio, income level, or whatever), then you'll have to stay with NRAM.

Thanks!

I know NRAM won't but I've just been doing my homework to see what's available and the Northern Rock website states existing customers aren't eligible for remortgages. As NRAM is still an arm of Northern Rock I just wasn't sure if that included me or not.

reviewbyme

NRAM and Northern Rock are two entirely separate companies now. Both Government owned but otherwise they have their own dealings (NRAM being the 'old' Northern Rock and the now Northern Rock plc being a new company). You would not be classed as an existing borrower if your current mortgage is with NRAM and you were applying to Northern Rock plc.

shy2011

Just a note. NRAM is now a completely different company to Northern Rock now so you can remortgage to Northern Rock if you are currently with NRAM.