Northern Rock - porting product problems

DaiJoA

hi everyone this is my first post!! :cool:

We're on the market and have had an offer accepted on a house.

We're a married average earning couple given a 100% together mortgage with NR in April/May 06 for £136,000 set at a five year fixed rate. At present our balance stands at £132,800. Our house is up for £150k, we need £147k for new house, and today I rang NR to ask if we could borrow some extra, i.e. £5k or so, for when we move to cover the moving fees etc.

NO!!! We cannot borrow extra. Fine. Er, no, we cannot PORT our mortgage either, the most they will now 'lend' us is £110,000!! I've got my estate agents' IFA on the case but according to NR, there's nothing they can do as their lending criteria has changed. Well bully for them, why have they changed it for existing customers? To say I am absolutely and hopping :mad: is to say the least!!

Can someone please give me some help and hope on this? Why are they happy for us to keep chugging away paying our £810 a month in this house for the next three years, but not three miles down the road?? I've read in another thread that they are wanting to actually get rid of their customers to free up assets. I can't believe we are being treated like this, basically we are seriously stuck here if it turns out to be a flat 'no' as all the other lenders have tightened up as well. I can understand that they need to promote sensible lending for new customers, but to treat their existing customers like this frankly is nothing short of disgusting, especially as we're tied in until 2011.

Please let me know your thoughts on this.

Dan_Collins_2

Well its a bit of a problem and your not the only ones in this situation. They can and will do this, any lender can change criteria and part of the conditions of porting is that it will be subject to underwriting and criteria may change.

I understand that this does not help you and under normal circumstances this would not be happening. The IFA will have little luck, they have bigger issues than people wanting to port. I believe this whole issue is something the FSA needs to look at but they will do this when it is to late, as ever!!

What you could try is to see if they will drop the penalties for leaving them. Contact them and say if they waive them you will and pay off the mortgage, if they dont you will carry on as you are. I have heard of a few cases that have had the ERC ignored.

sassybooboos

i recently tried to port my mortgage with bm and they also said no.and declined us for a mortgage point blank but wouldnt specify why. we have now had to pay them a £7500 redemption penalty as we needed to move.

strange that halifax who are in the same group gave us our mortgage and we move next week.

i feel as though we have been conned out of £7500.

CYBERCIDERSAVER

Have you been somewhere else forthe last 8 months? say MARS!;)

NR's problems are well known. THe threat of 2000 job losses and the intention to slash their mortgage book in half ought to explain their position.

NR aren't the only mortgage lenders out there. You tied yourelf to a 5 year deal. Did you not think about the possibility of moving within that timeframe?

I feel for you. being trapped somewhere you don't want to be must be frustrating.

But if it was your business (which in a sense it is now:D ) you would want them to reduce their exposure any way possible. The fact that you are tied is as a result of your decision to opt for a long deal.

DaiJoA

I understand all the problems they've been having but what I dont understand is why its ok for us to have a mortgage on this house, but not one three miles down the road. Our redemption is 'only' four grand but its not looking very likely that we'll be able to get another mortgage with anyone else. I did think about moving on within the 5yr time frame, but I didnt think it would be a problem. I think it is completely disgusting that we should be forced into negative equity through no fault of our own, and that our son should have to go to a rubbish school and live in a rough area just because we can't get out of here now.

Hopefully the IFA will be able to do something tomorrow but I suppose its looking pretty doubtful.

How is the housing market ever supposed to pick up with this sort of thing going on??

beecher

I'm confused by why you're so angry to be honest. I stayed in my last flat beyond when I wanted to because my fixed rate hadn't expired yet - if you think you're going to move in the short term you shouldn't really be taking out a long term fix.

We're reverting to traditional lending patterns, where 100% plus mortgages just don't happen, and 90% plus are unusual, and where fees/moving costs aren't added to the mortgage, but paid for through savings. It is going to be hard for those with no experience of such a financial landscape, but it is in fact the norm.

Maybe the best bet is to sell and rent in the area you wish to live, and then save up 10% deposit and start again?

silvercar

The reason that they are happy for you to continue with your current mortgage but won't let you take your current mortgage to the new place is that times have changed, if you were asking for your current mortgage now, the answer would be no.

When lenders advertise that a great feature of their mortgages are portablility, it hits hard when the small print states that this is subject to current lending criteria. Especially when their criteria has been tightened.

I can see a case for lenders being forced to agree to allow portability when the new lending is no more generous (in terms of LTV and affordablility) than the current mortgage - or at least to relax ERCs in these circumstances.

DaiJoA

beecher wrote: »

I'm confused by why you're so angry to be honest. I stayed in my last flat beyond when I wanted to because my fixed rate hadn't expired yet - if you think you're going to move in the short term you shouldn't really be taking out a long term fix.

We're reverting to traditional lending patterns, where 100% plus mortgages just don't happen, and 90% plus are unusual, and where fees/moving costs aren't added to the mortgage, but paid for through savings. It is going to be hard for those with no experience of such a financial landscape, but it is in fact the norm.

Maybe the best bet is to sell and rent in the area you wish to live, and then save up 10% deposit and start again?

One of the reasons why I'm so angry is because our house is on the market already and so we've wasted £300 on our HIP, for a start! Another reason being that if the most mortgage we'll ever get is £110,000, we'll only be able to get out of here in about ten years time, meaning our son won't be able to go to the primary school we want him to go to. We took a 5yr fixed because they would only give £127,000 for a 2yr fixed deal.

I also feel we were badly advised by the IFA we used at the time - at no point did he ever mention anything like this could happen - also, they are meant to be independent, and yet everyone I know who went to them got offered a northern rock mortgage.

I completely understand them wanting to tighten things for new customers, but to treat existing customers like this is really bad - they were more than happy to lend us loads when the going was good, now they've over-extended themselves and are nearly at the point of ruin, all the people that can't leave are stabbed in the back. Yes, I know its business but these are people's lives here!

We have discussed renting where we want to go to but my husband is 37 and so we wouldn't be able to get another 25/30 year term, plus I'm only working part time because of the baby. Also a big part of me thinks why should we have to come off the ladder when we've worked so hard to get on it?

It really does stink in my opinion :mad::mad::mad:

beecher

DaiJoA wrote: »

I also feel we were badly advised by the IFA we used at the time - at no point did he ever mention anything like this could happen

Surely you realised that if house prices went down, you'd be in negative equity? Didn't it say as much in your mortgage offer? I do feel sorry for your situation, but maybe you shouldn't have taken such a mortgage in the first place. You say NR have over extended themselves - in my opinion people with 100% plus mortgages have done the same. It was bound to happen that this bubble would burst, and sadly it is those with these high LTVs who are going to feel the impact first.

You should've sorted the mortgage out before putting your house up for sale, and I think now you have to really think about your options carefully. Selling up and renting might be the best option - if not I'd advise staying where you are and overpaying as much as possible to try to pay off the mortgage.

You could post your combined salary and see if people can advise you about alternative mortgages. Is there a cheaper area you could move to if you feel you won't get the mortgage you need to move to your chosen area?

silvercar

also, they are meant to be independent, and yet everyone I know who went to them got offered a northern rock mortgage.

There was a time when Northern Rock was offering more money with their together mortgage than any other lender.

Circumstances can change, you just have to assess what is best to do in the situation you are in now.

We decided to move 3 months after taking a 2 year mortgage fix; the first thing I did was contact the mortgage company to see if we could port the mortgage, before deciding what we could afford.

I don't think you can blame anyone for paying for a HIP before sorting the mortgage.

You now have to balance selling and losing money, maybe buying a smaller property than intended in your desired area, or staying put and accepting the area you live in.

As far as schools go, if it is what you want send your child to a school in a different area; OK you will have journeys to contend with to and from school, but if the education is so much better then do it.

vickyh_2

Hi DaiJoA

Are you saying that you have a portable mortgage with NR but they are refusing to port it? Are they allowed to do that? I have a portable mortgage with them too, and called them about a month ago to check I could still port it and they said I could. Everything's changing so quickly I can't keep up!
If I can't port it, then my redemption penalty is going to be huge, but I can't afford to stay on!! Hey ho... just one more nail in the coffin!

Thanks

Vicky