Northern Rock and All that

yellowkylie

Hello Peeps,

Just lookin for some helpful advice please. I have a mortgage with Northern Rock 4.99% fixed until July 2009. Mortgage is 118000, house worth about 125K so 95% mortgage. Only bought in October.

I have three part-time jobs (and 2year old lol) I earn 15k from two of the jobs combined and another 6K from self employed work (before tax)

I have 3 credit cards with balances of 2100, 1200, 1800. they are all life of balance cards and am paying an extra 250quid off them a month (alternating!!) so that I can have my debts paid off when my fixed rate ends.

However my question is this. Given that there might not be any 90%+ mortgages left come July 2009. Should I paying the 250quid or maybe more off my mortgage, instead of my credit cards?

Is it better to have no 'other debts' come July 2009 or a lower mortgage? Does this make sense?

Cheers
:money:

UK007BullDog

A fourth job perhaps?

To be serious, your monthly payment of £250 until 2009 will not make much of a difference to your mortgage. I would try to get rid of the CC as quickly as possible and change one or two of them to 0% cards and hit the one with the lifetime raste. If you can get rid of at least one card or two that would help when looking to remortgage. Do not take on any further debt.

Can you tell us the lifetime rates you are paying on the cards and the mortgage interst rate you are paying now.

chappers

essentially pay as much as you can on the higest rate card whilst paying the minimum on the others then move on to the next one.As bulldog says unless you can overpay massively on your mortgage I doubt you will make much difference to that.Probably better to get rid of your debt commitments leaving you more spare cash each month for when you come to re-mortgage

yellowkylie

Thanx Chapper and Bulldog for your replies. In answer to you questions, the mortgage rate is 4.99 fixed until July 2009 paying 616quiddidlies a month.

Credit Cards are: 2100 with Marks and Sparks 3.9% Life of Balance
1800 with Citi Bank 4.9% and 1200 with Virgin 0% for the time being.

I guess I am more worried that there will be no mortgages available to me, if they keep pulling the higher lending % mortgages. Though I agree I will prob have more available mortgages if I pay my credit cards off.

In theory I could prob pay upto an extra £500quid a month of cards and Mortgage. Which might make more of an impact, but not much I agree.

I am panicking I think because I am with NR and not knowing that much about mortgages and current situation I dont want to be done over when the fixed term ends and it reverts to the variable. A lot of people on here are saying they decrease in interest rates has not been reflected in NR variable rates.

I am also thinking that if my house price falls, then I will also find my self in goo, which is partly my reason for saying should I pay my mortgage off instead?

I have thought about a fourth job lol. But I do like to keep Mondays and Tuesdays Free!! Thanx for you input.

:j :beer:

UK007BullDog

Well you might not have enough income to hit the mortgage. So best is to clear all the debt of the cards and then worry about the mortgage when the time comes. You will have better bargaining power when you can prove you only have a mortgage to worry about. Also who knows what 2009 will bring. You cannot change your situation right now anyway. I suggest you concentrate on your credit cards instead as there you can make a difference.

yellowkylie

thanks again bulldog, i forgot to add that I have a boyf who earns bout 20k so it is not just me paying lol. But I have been thinking about this today and I am gunna blast the debt off my cards over the next year. Having no credit card debt sounds very appealing.

And If we can over pay easily now then we probably dont need to worry too much about being able to pay the SVR in the NR deal come July 2009 - if we are not in a position to remortage for what ever reason.(when we have no credit cards to think about!!!) Although I would love some info on what is happening with NR and SVRs if anyone has an upto date idea.

I heard Martin Lewis sayin something on the Wright Stuff the other morning, which is why I am in this panic.:eek:

UK007BullDog

There is a sticky on the board about NR. Have a look there.

UK007BullDog

If you plan to live in your property long time then no need to panic even if prices go down. I dont think there will be a crash only a correction and a small fall, but not a crash.

yellowkylie

Yeah I read most of the sticky but I coudnt find anything about NR and SVR. So do banks not need to reduce their rates when there is an interest rate cut? Could NR even increase the Variable rate to what they wanted?

I might have to ring them lol.
:beer:

UK007BullDog

Yes they can as it is their SVR as like all other banks too, so they can move it up or down as they please.

Its if you have a Bank of England Base rate tracker where they have to follow the Bank of Englands lead.