Northern Rock End of Mortgaged Deal (Merged Threads)

Captain__

Be careful, how do you know Northern rock will raise the interest by 8%? mine is capped at 6.9% if I opt out of the mortgage element and is currently at 4.89% alongside the mortgage. NR had several variations with different rates of loans. I advise you ask NR if you cannot find it on your paperwork, what your rate will be and what the monthly payment will be.

When looking for a new mortgage, you are going to request for a value of mortgage (amount you are asking to borrow) against the value of property you wish to purchase. (Property Value/Mortgage)*100 = % Loan To Value.

If it = 97%, good luck with that, but do talk to a financial advisor as there may be a product available.
If it = 85% you stand a good chance of getting a mortgage.

Once you have an idea of what your NRAM loan element will be, the second part of a mortgage application is about affordability. You will be asked for your monthly income (Pay and any other income you can produce evidence of) and outgoings (credit cards, other loans, NRAM loan, Child payments, Council Tax, Food Budget, Sky subscription, etc..) to see if they think you can afford the product.

They then take a number of personal features into account, married or single, dependents, time with your employer, payment history with credit agency etc... Create their own 'score' This is not to be confused with a 'Credit score' which in my opinion does not exist as every lender 'scores' from information gleamed in different ways, with a pass or fail on application.

But I would suggest, if you are looking to remortgage, go see an independent financial advisor as they can reiterate / ammend any of this advice.

Thrugelmir wrote: »

NRAM will raise the interest rate on the unsecured element by 8%.

So this will impact your ability to borrow the amount you require elsewhere.

So if you are serious about moving then worth increasing your equity by saving to achieve this.

badobsession81

Hey

Been reading the comments on here trying to get a steer as to where to direct some extra money - If anyone is able to offer advice or experience, that would be greatly appreciated. Also, feel free to ask for any addn info.

My fiance and I have a nearly 5 year old 125% (£175k approx) mortgage on SVR (4.79%) over a 35 year term - originally 95% secured against the house and a £30k loan. These have obviously decreased, but only by a few thousand.

We are both now earning more money than when we took out the mortgage and so are currently using £500 to pay down credit card debts of approx £7.5k.

We also have the small thing of a wedding in just over a year!

Long term we hope to be able to move house and so would like to make sure we're directing any additional money at the right thing.

Starting next month I should be able to afford an additional £200ish and then from early 2014 my partner will be clear of a personal loan and be able to contribute the £350 she is currently paying for that (all subject to circumstances not changing of course).

I've always believed in clearing other debts first, but with rates as low as they are, and the risk as them going up in the future, I do wonder if we should start directing some money to the mortgage (secured or unsecured or both), so that we increase our LTV (or remove the worry about the unsecured loan element) and make a dent on the interest/increase our chance of getting a product elsewhere.

Anyway, I've rambled long enough, and really don't know what option would be best.

Thanks muchly for any help/experience you can offer.

Thrugelmir

badobsession81 wrote: »

I've always believed in clearing other debts first,

Best to clear debt with highest rate of interest first.

Then tackle the mortgage/unsecured loan.

Unsecured debt will impact your ability either to obtain a mortgage or the amount that a lender is willing to offer you.

zipman23

Could someone please explain how porting your mortgage with NRAM works for me? I did ring them to get some info but I cant remember exactly what was said!

badobsession81

Thrugelmir wrote: »

Best to clear debt with highest rate of interest first.

Then tackle the mortgage/unsecured loan.

Unsecured debt will impact your ability either to obtain a mortgage or the amount that a lender is willing to offer you.

Thanks thrugelmir. That's what we've been doing (clearing CCs first). Was just thinking about when rates go back up and whether it might have been 'tactical' (for want of a better word) to bring the mortgage stuff down before the mortgage payment naturally goes up with any interest rate rises.

Cheers :-)

badobsession81

My only other question is around working towards being able to move to a cheaper mortgage product as NRAM's SVR is at 4.79% (higher than others I think?)

With the ultimate goal of moving to a cheaper mortgage in the first instance and even moving house if possible, is this approach the most appropriate (focus on other debt first, then target secured or unsecured element)? Has anyone with a 125% mortgage successfully moved products and at what point were you able to do so?

Thanks loads!

Thrugelmir

badobsession81 wrote: »

My only other question is around working towards being able to move to a cheaper mortgage product as NRAM's SVR is at 4.79% (higher than others I think?)

With the ultimate goal of moving to a cheaper mortgage in the first instance and even moving house if possible, is this approach the most appropriate (focus on other debt first, then target secured or unsecured element)? Has anyone with a 125% mortgage successfully moved products and at what point were you able to do so?

Thanks loads!

Any unsecured debt i.e. credit cards you have may well impact on how your application is viewed by a potential new lender. Either in terms of a decline or the amount that they prepared to lend you.

By repaying the unsecured element to NRAM first. Its more of a physicological boost in seeing the debt repaid more quickly and the balance owed reducing.

badobsession81

Thanks, just wanted to clarify that and see if anyone had taken a diff approach in the NRAM situation. (eg focused on particular element of mortgage/split payments across CCs n unsecured, etc etc)

Based on what you've said I'm going to direct everything to CCs in interest order then towards unsecured element of mortgage (once CCs cleared).

Thanks again :-)

Thrugelmir

badobsession81 wrote: »

Thanks, just wanted to clarify that and see if anyone had taken a diff approach in the NRAM situation. (eg focused on particular element of mortgage/split payments across CCs n unsecured, etc etc)

Based on what you've said I'm going to direct everything to CCs in interest order then towards unsecured element of mortgage (once CCs cleared).

Thanks again :-)

There's no magic secret to improving your financial situation. Just cut out the waste expenditure and reduce your outgoings. The hard work does pay off. Even if initially, it does seems slow progress. The more you pay off the less interest you will incur.

Good luck.

niccatw

@badobsessions, what did you do when you moved on to SVR? I contacted NRAM and asked them to keep to my original fixed rate payment (as that was what I was used to paying anyway) and to pay all of the overpayment to the unsecured loan element.

I continued to pay off my loan and CCs as I had been doing... So that was my compromise between paying down my highest interest rate loan and the psychological impact of seeing the NRAM secured debt go down...

Both the personal loan and the unsecured element of my mortgage are now gone but I can't move to another lender as I still don't have enough equity. Now however, my CCs are 0% and I am still paying my original fixed rate amount but the overpayment is now going to the mortgage - that does feel good!

And I'm slowly, slowly, slowly renovating my flat...

So I'm tackling it from different angles and I'll get there in the end. It's working for me.

Yes, paying the highest interest loan makes most sense finacially, but sometimes you also need to balance that with what works for you (and your fiance) personally and psychologically - and only you two can work out if your prefer to snowball highest interest to highest interest rate or if you would *feel* better if you knew something was going to the unsecured NRAM loan.