Northern Rock End of Mortgaged Deal (Merged Threads)

UK007BullDog

mircea wrote: »

Hi
Thank you for all the 'comments' none of which so far have really answered my question or offered any advice. If anyone out there could offer some advice or information which would be useful rather than arguing the 'agenda which NR has' I would really appreciate it!!!

As a NR customer it is important that you understand what is going on with NR. With that information you can deal with your situation. You have been given some advice but once your deal is coming near its end I would look for a broker to search the best deal for you. In the mean time you might want to throw as much money as you can at your debts to reduce those.

lynnexxxo
I don't really understand why NR would want to get rid of all the 'good' customers with low LTV ratios and less chance of defaulting

Lynn, the good customers will get better rates, however NR has a cashflow problem, by getting rid of the good and risky customers they will get money paid to them when another mortgage company takes on those customers. They desperately need the cash to pay for their costs. Hence them offloading their cusomers. They lost a lot of money through customers withdrawing their savings and then not able to sell their bundled mortgage customers to those venture capitalists who used to buy them (Citi, Barclays, Merril Lynch and a large number of US companies.

There is less risk for them to get rid of customers than to keep those on 100% plus mortgages when house prices are slowly creeping down, leaving a lot of people in negative equity.

WTF?_2

mircea wrote: »

Hi
Thank you for all the 'comments' none of which so far have really answered my question or offered any advice. If anyone out there could offer some advice or information which would be useful rather than arguing the 'agenda which NR has' I would really appreciate it!!!

Well, it's a bit late but here's some very good advice for anyone else who might be considering putting themselves in your predicament: Don't take out a 125% Interest Only mortgage that you can only just manage to pay the 'teaser' rates on.

If you actually have some equity in your house by the time you pay the mortgage back then you'd be well advised to sell ASAP before you find yourself in the position where you can't meet the repayments and don't have a low enough LTV to remortgage. It's entirely conceivable you could later find yourself in negative equity in which case you face losing the house and still owning the bank thousands.

NeilQuinn

One of my N Rock clients has just telephoned me with similar concerns to the OP.

He said he's heard that Abbey are offering to pay the penalties for any N Rock clients who want to switch. Anybody heard about this?

UK007BullDog

NeilQuinn wrote: »

One of my N Rock clients has just telephoned me with similar concerns to the OP.

He said he's heard that Abbey are offering to pay the penalties for any N Rock clients who want to switch. Anybody heard about this?

Nope have not heard of that. But that would be madness in the time of the credit crunch to do that. Why not just let customers come off their deals naturally? That does not make financial sense at all to me. I know lenders are desperate of the good customers from NR but to actually pay the penalties sounds more like a corker to me.

Unless they meant they will lend extra to cover the penalty even if the LTV is higher than they usually go up to. Hmmmmm.......

NeilQuinn

I had a good search around all the websites & couldn't find anything myself. Probably Chinese whispers.

You're probably right....Abbey have lent someone the extra money to cover a NR penalty.

mircea

Hi
Sorry to keep coming back,
a poster earlier said about LTV.
Our house has been valued at 150,000 the 'mortgage part' of our house is 132,500 which means, in theory, we have 18,000 equity? The non secured part of the mortgage is 29522.

If we were to sell would that equity been automatically taken off our unsecured part? or would we be able to take the lump sum as a deposit for a new house?

Also if we were to remortgage would a company say, ok the house is worth 150,000 you own 132500 therefore the LTV is 85%? Would not want to come out until the 1st june so that we do not incur penalties.

Sorry for so many questions, but many of you seem very knowledgeable, would be happy to have this discussion through private messages if people prefer.

chappers

NR will not be able to survive if they put all their eggs into the savings market it is awell known fact that customers tend to be loyal if they think they are getting agood deal and will take out other products.
Mortgages are probably most households biggest expenses and the one thing that people shop around for even to the point of maybe saving just afew quid amonth.
If your not happy with someones mortgage deals your probably less likely to want to put your savings into that bank especially if they're on shaky ground, I'm not sure the government taking control is going to reassure anyone.
As with all banks to be succesful they need to spread their business over a balanced set of products both investment and lending.

lynnexxxo

Mircea - am I right in assuming that you have a mortgage for 132 and the together loan part is for 29K.

I believe that NR will allow you to sell and pay off the mortgage part an let you keep the loan - however as they seem to not want any new buisness they will put the loan onto a high rate, not sure but maybe higher than the SVR as it is not a mortgage.

One issue is that having such large loan to pay will reduce the amount other lenders are willing to lend you either for a remortgage or a new property, especially if you are looking to get a high salary multiple.

kingkano

mircea wrote: »

Hi
Sorry to keep coming back,
a poster earlier said about LTV.
Our house has been valued at 150,000 the 'mortgage part' of our house is 132,500 which means, in theory, we have 18,000 equity? The non secured part of the mortgage is 29522.

If we were to sell would that equity been automatically taken off our unsecured part? or would we be able to take the lump sum as a deposit for a new house?

Also if we were to remortgage would a company say, ok the house is worth 150,000 you own 132500 therefore the LTV is 85%? Would not want to come out until the 1st june so that we do not incur penalties.

Sorry for so many questions, but many of you seem very knowledgeable, would be happy to have this discussion through private messages if people prefer.

Yes 17,500 equity. If you were to sell then the unsecured part is irrelevant, its unsecured, all your solicitor would do is clear the mortgage amount. However I understand if you clear the mortgage then NR put your unsecured lending onto a punitive rate (did I read 10 or 12% somewhere? can somebody confirm?).

If you transfer the mortgage its 88% ltv. So would qualify for any products needing 90%. Your just short of 85% products though (unless you can pay a bit off as you transfer it). Again your unsecured loan will go to the punitive rate, unless you can also refinance that.

When applying for the new mortgage your personal loan will be taken into account. They will deduct 12 x your monthly repayment, from your total quoted salary, when working out the multiple for your mortgage.

Hope that helps.

mircea

kingkano wrote: »

Yes 17,500 equity. If you were to sell then the unsecured part is irrelevant, its unsecured, all your solicitor would do is clear the mortgage amount. However I understand if you clear the mortgage then NR put your unsecured lending onto a punitive rate (did I read 10 or 12% somewhere? can somebody confirm?).

If you transfer the mortgage its 88% ltv. So would qualify for any products needing 90%. Your just short of 85% products though (unless you can pay a bit off as you transfer it). Again your unsecured loan will go to the punitive rate, unless you can also refinance that.

When applying for the new mortgage your personal loan will be taken into account. They will deduct 12 x your monthly repayment, from your total quoted salary, when working out the multiple for your mortgage.

Hope that helps.

Hi
Thank you that helps a lot.

Our idea is to try to get a new mortgage with someone else but keep the unsecured bit with Northern Rock - hopefully our payments will jump to about £250 a month rather than £168?? then we are going to do our loft (have had planning permission for a while!) finally we hope to be able to then sell the house and pay off the NR unsecured part in a few years time when the housing market settles down.
I hope some of that makes sense - does it??

BTW now that NR have pulled their together product, what will happen to those of us who have the product at the moment?

Have had a panicky few days but having done my maths even with the loan we have at the moment we can afford the interest only payments, however would obviously be better to get onto repayment as quickly as we can!!! Think i need some pills to calm my nerves - we were recommended NR as a good provider.