Northern Rock End of Mortgaged Deal (Merged Threads)

booboomania

Well I feel sick reading this post. I hadn't realised things had got so bad for people in our situation.

We have a NR 100% mortgage of £202,000 with an unsecured loan of £4,000, and our 5.8% fixed rate is due to end in April 2009. If I have understood things correctly we have no chance of finding an alternative 100% mortage with another lender, and so are tied in to NR. They sent us a letter recently indicating that they were unlikely to be able to continue with our mortgage arrangements as they currently stand when in April 2009, which reading between the lines mean we will have to stomach the SVR??

Can anyone offer any advice please? Should we be seeking some financial advice now, through a mortgage adviser perhaps? Could the lending market change between now and April 09 - maybe this is our only hope.

MarkyMarkD

You have a few more choices than maybe you guess:

- if your property value has increased over £217k, you could get a 95% LTV mortgage for £206k from another lender. It won't be cheap, but it'll be cheaper than NR SVR; or
- even if there's a shortfall between £206k and your present property value, you could get a 95% LTV mortgage from another lender and get a personal loan for the difference - personal loan rates aren't ridiculous and may indeed not be more than NR's SVR (or much more) and you'll save a lot on the mortgage part.

I shouldn't assume that you will be stuck with NR - you are in a far better position than people who originally borrowed 125% who frankly have very little chance of getting down to a 95% LTV mortgage.

There's no point at all doing anything right now. You can't remortgage until April 2009; you can't get an offer than lasts longer than 6 months; and your financial position will (presumably) be better in a year's time.

Obviously you should be living on baked beans for the next year with the aim of cutting down your borrowing under the magical 95%: once again you have the benefit of time which others rolling off their cheaper NR products now don't have.

booboomania

MarkyMarkD wrote: »

You have a few more choices than maybe you guess:

- if your property value has increased over £217k, you could get a 95% LTV mortgage for £206k from another lender. It won't be cheap, but it'll be cheaper than NR SVR; or
- even if there's a shortfall between £206k and your present property value, you could get a 95% LTV mortgage from another lender and get a personal loan for the difference - personal loan rates aren't ridiculous and may indeed not be more than NR's SVR (or much more) and you'll save a lot on the mortgage part.

I shouldn't assume that you will be stuck with NR - you are in a far better position than people who originally borrowed 125% who frankly have very little chance of getting down to a 95% LTV mortgage.

There's no point at all doing anything right now. You can't remortgage until April 2009; you can't get an offer than lasts longer than 6 months; and your financial position will (presumably) be better in a year's time.

Obviously you should be living on baked beans for the next year with the aim of cutting down your borrowing under the magical 95%: once again you have the benefit of time which others rolling off their cheaper NR products now don't have.

Thank you for your response.

I think it is likely that our property has increased judging by recent house sales in the area. Plus we have replaced most of the windows and decorated most rooms (hopefully this would have some positive impact on the value - if only we had that crystal ball we would have put the money into the mortgage rather that on the work). Although if I am to listen to the housing market forecasts, prices may well have dropped by the time we re-mortgage.

I have applied for promotion at work, so should I be successful the additional money will be going straight to NR. Only snag is we have a baby due in October, but not a lot we can do about that now!

Jenni1980

This is my first post to this forum! I'm hoping that someone can give me some advice.

I've got a mortgage with NR and the fixed rate comes to an end on the 1st June.
I was a first time buyer and borrowed about 106% to do the house up with and get on the ladder - 141k
With the current NR issues I've gone back to the mortgage adviser (London & Country, advice taken from this website).

On their advice I applied for an Abbey fixed rate for 5 years at 5.58%, the amount we need to pay back is around 140k. They came out to value the property and valued it at 140k, this was a conservative valuation so they asked me to provide details of houses that sold in the area for more, I found sold houses for 155-163k in the last 2 months, I sent this and they have revised their valuation to 147k

This means that they will only lend us 132.3k - 90% LTV.

The mortgage adviser has said that I could keep the 8k difference with northern rock (as this would fall in as part of the unsecured loan) and continue with the mortgage, however, NR has loaded the interest rate so its around 15.5% (8 % above base rate) so it would be around £100 per month on top of the mortgage amount of £732, or I can get a loan else where over a shorter term but a lower rate.

Anybody got any advice whether it's worth trying another lender or going with the option above.

Sorry for the life story but I've seen some really excellent advice given on this forum and thought I'd give it a go!

MarkyMarkD

You can borrow far cheaper than 15.5%, even (possibly) on a long-term basis from a nasty second charge lender.

Why on earth did your adviser suggest applying to a lender who will only go to 90% LTV if the valuation was likely to be an issue? Other lenders will give you 95% which would eliminate almost all of the shortfall which is presenting a problem.

Or did you tell them up front that the house was worth (say) £155k, so they thought there wasn't a problem?

Jenni1980

Thanks for advice, we had our house valued by an estate agent who valued at between 155k-160k so thats what I thought the mortgage surveyor would value it at.
Our mortgage adviser reckons that we would be best sticking with this option because of the good rate, but I'm not so sure. What do you think?

MarkyMarkD

I don't quite understand why the valuer won't value it up as you expect. If you have evidence of comparables, they should accept them if they are recent and truly comparable prices of completed transactions, not knock off a random £8k or whatever.

You've changed from saying that you had evidenced comparables at £155-160k to saying that the estate agent reckoned it was worth £155-160k. Are both true?

thfccambs

I have 2 years left with NR on my fixed rate, but reading this thread has even started to get my worried. My mortgage was for 179k and i took out a loan with it for £28k last year. My house is worth about £220000 at the moment. Main problem now is im earning probably £8k a year less as bonuses at work have well dried up.

Will just have to sit tight and see what happens.

tobytoes

Hi I am i a similar position, my husband and I where both on a good salary, bought as an investment property, now have lmost 50% equity in the property, had an excerllent rate of 3.99% with NR now this ahs come to an end along with redundancey for both of us and ou mortgage has now gone up by £582 per month, huse been up for sale since dec as wanted to down size - no sale as yet, cant move as salary is low and only ben quoted a small loan, also 57 years old.......

sappho_2

tobytoes wrote: »

Hi I am i a similar position, my husband and I where both on a good salary, bought as an investment property, now have lmost 50% equity in the property, had an excerllent rate of 3.99% with NR now this ahs come to an end along with redundancey for both of us and ou mortgage has now gone up by £582 per month, huse been up for sale since dec as wanted to down size - no sale as yet, cant move as salary is low and only ben quoted a small loan, also 57 years old.......

Sorry to hear that Tobytoes, I too am 57 years old with a Northern Rock mortgage.

Anyone heard if NR will be passing on the recent 0.25% rate cut to its poor customers?

Sappho