Northern Rock End of Mortgaged Deal (Merged Threads)

WorriedFromBristol

Hi,

I think I'm in a fairly similar situation to a lot of you out there. I took out (with my other half) a NR together mortgage/loan last April, for £157,000 + £20,000 on top - and it's interest only too.
It's a 5-year fixed rate due to end in 2012. Seems like a long way away but I know that soon, it won't be :rolleyes:

The initial idea was to get our feet on the ladder (we had no deposit), do some renovations to the house to increase its value (hence the Together loan) and then save on the side for a deposit on our next house, putting our trust in the housing market of course...

How wrong could it have turned out... :eek:

Obviously with house prices falling in the way they are (a rough estimate from a website says that our house is now worth about £152k - and I think that's generous), we are in a tight spot. We're not particularly happy with where we're living at the moment but can hold on for a few years at least.

I'm looking for advice as to the best way to get out of this spot when the fixed rate comes to an end in 4 years' time. Should we save all that we can to put a significant dent in the mortgage/loan when we come to remortgage, and if so, will this increase the chances that we'll be able to remortgage (or hopefully have enough to move house)? Or will that really matter? Is there a better way of beating this?

I'm hoping that the house price fall will be temporary but man, who knows?...

Cheers
WfB (i'm not a mortgage advisor)

dixie_chick_2

My fixed rate mortgage with NR is due to expire on 1st September this year. I bought my house 4 years ago for £49,000 and got a mortgage from NR for £53,000.). My house is now valued at £72,000. The problem is I also have a loan secured on my house from FirstPlus, it was for £25,000 over 25 years. I've never missed a payment on anything in my life so don't have bad credit. Will another mortgage company take me on? Thanks very much for any help in advance.

happybroker

dixie_chick wrote: »

My fixed rate mortgage with NR is due to expire on 1st September this year. I bought my house 4 years ago for £49,000 and got a mortgage from NR for £53,000.). My house is now valued at £72,000. The problem is I also have a loan secured on my house from FirstPlus, it was for £25,000 over 25 years. I've never missed a payment on anything in my life so don't have bad credit. Will another mortgage company take me on? Thanks very much for any help in advance.

distinctly possible though you won't be able to consolidate the Firstplus loan.

Firstplus will have to agree to the new mortgage being taken by signing a deed of postponment which will allow the new mortgage lender first dibs on the property if it all went belly up.

john_mac83

I am another NR together mortgage holder but thankfully I bought a cheap property (£82000) which was valued at 90k in December 07. Now i know it may have decreased in value but with it being for such a low price in the first place even 10% less would only be 81k.

My mortgage is a 5year fixed which runs out in Feb 2011 - 74k mortgage and 8k unsecured loan.

I have called NR and began overpaying the unsecured loan only off by £320 a month. This means it will be completely paid off before the fixed rate ends and so i will only have a 74k mortgage left on the property (minus the small payments made over the 5years). I am obviously hoping that the housing market is in a better position in 2 and a half years time and the house is worth at least in the mid 80's but I am not relying on this hence the overpayments now. At least this way the LTV will be around the 90% mark rather than near 100% as it is now.

Maybe this wont be enough, just hope things get better by 2011

poppy10_2

Oh dear... so much for the "high quality mortgage book"

20pc of Northern Rock customers face negative equity

Northern Rock, the state-owned bank, will reveal this week that roughly one in five of its mortgage customers faces negative equity next year as it unveils a heavy loss for the six months to June.

About 5 per cent of the nationalised lender's mortgage book is already thought to be in negative equity, reflecting Northern Rock's aggressive tactics of lending up to 125 per cent of the value of a home in its last years as a private company. Another 15 per cent is expected to have been lent to households with less than 10 per cent equity. That equity will be rapidly whittled away next year as house prices tumble.

HBOS, the country's biggest mortgage lender, last week predicted that house prices will fall 15-20 per cent by the end of 2009. In total, almost £20bn of Northern Rock's £90bn loan book is expected to be in negative equity by the end of next year, making it unlikely that those customers will be able to remortgage.

Negative equity raises the prospect of the Government having to repossess large numbers of people's homes.

depurnell

Hi all,

If you have a mortgage product that is due to end in up to 3 months time it is possible to secure a current rate with another lender now so that if rates increase you will be protected.

Kind regards,

Damian Purnell
Mortgage & Protection Consultant

jamesd

poppy10, it's no longer possible to judge what the quality of Northern Rock's loan book was this time last year. It's been successfully reducing the size of its loan book and that means that the borrowers in negative equity will be an increasingly large proportion of its book because those are the ones who have most trouble leaving.

A better past quality indication is probably those in arrears, about which the story said 'by the end of December, 0.57 per cent of the mortgage book was three months or more in arrears. By the end of April, that was 0.95 per cent. Chairman Ron Sandler said in May the figure will "move much closer to the industry average... in the coming months". The Council of Mortgage Lender average is 1.34 per cent.'

Even that is going to get worse over time because the most financially sound borrowers will have been departing, leaving Northern Rock with the worst portion of its loan book.

ceebeeby

Hi All,

Can anyone give some advice pse. Our NR mortgage fixed rate deal expires on 01/09/08. I spoke to them yesterday to discuss what they can offer ... basically nothing except SVR at 7.xx% which will raise the payments by approx. £100 per month.

The issue is basically that we were given a £1000 home start 'gift' at the start of the mortgage, which means if we move lender between now and the end of Jan 09 we have to repay this gift.

Is this fair and just? We would love to stay with NR if possible, however, they won't have us. Obviously it's cheaper for us to stay with NR until end Jan, but still feel as if we've been conned somewhere. NR did offer to put us in touch with brokers, but what's the point if we can't go anywhere!!!

Agree with poster above, that they seem to be screwing over all existing customers!

catwoman150

ceebeeby wrote: »

Hi All,

Can anyone give some advice pse. Our NR mortgage fixed rate deal expires on 01/09/08.
The issue is basically that we were given a £1000 home start 'gift' at the start of the mortgage, which means if we move lender between now and the end of Jan 09 we have to repay this gift.

Is this fair and just? We would love to stay with NR if possible, however, they won't have us. Obviously it's cheaper for us to stay with NR until end Jan, but still feel as if we've been conned somewhere.

How did you find out that your £1000 "gift" expires in Jan 09 and not with the mortgage deal in Sept 09? Is it on the paperwork or did you just ask. I could be in the same situation my deal runs out in Aug 09. So infact I could have to stay longer then with them.

coolchef

My NR fixed rate deal finishes on 01/09/08 however i too had the help with costs and if i move mortgage before 01/02/09 i am liable for £1000 + £200 draw down fee i think they call it. i also had a letter from Lloyds TSB like alot of NR customers about a good Deal ( Not) they could offer me, i am in a fortunate position where my payments are going up to only £450 a month from £378, so prettly low really,
I worked it out it is cheaper for me to stay with them and take a hit with their interest rate @ 7.49% i believe it is until feb 09 then move my mortgage and lloyds TSB can go rot they wanted 1200 admin fee,,
I spoke with a local broker and because my mrtgage is under 55000 he got a deal with admin cost of 150.00