Northern Rock - Nightmare

Tillydot

My mortgage with Northern Rock came to an end a couple of months ago but I didnt take out their new offer as they wanted around £6000 to fix a new deal, although I wish I had now. We were going to move house but there isnt enough equity in the property. I am self employed so need 85% LTV. I do just about that amount but a shortfall to cover the new mortgage product fees. Anyway I have had the letter that most Northern Rockers seem to get. Thank you but no thank you.

neas

over stretch yourself and this is what happens unfortunately . This is gonna be more of a n occurance when house prices drop more.

Now imagine your house drops by 10%.... you have even more negative equity... you can't move, you can't remortgage at all, you are stuck on a higher SVR... eventually you have to get repossesed.

I would say it would be best to try and sell your house and rent now... I know it sounds extreme but this is the best way to avoid more debt.... if you wait for houses to drop too much you will be in more negative equity... you wont be able to afford the mortgage payments and would be forced into a repossession.

This is nasty , What fixed rate deal were you on? Couldn't you have saved more of a deposit like most FTBers do?

Tillydot

I am not a first time buyer. I have remortgaged quite a few times, like a lot of people have to just survive. As I dont have a crystal ball I did not foresee the credit crunch. Being self employed doesnt help the matter either as new mortgages companies want a bigger deposit. Renting is not an option as I have a lot of rescue animals so at the moment I am going to try and hang on. Any other suggestions folks. Why are you so sure house prices will drop by so much, do you have a crystal ball?

dimbo61

If you can you need to move lenders and fast
Northern Rock dont want to give you a new deal they want you to
take your mortgage elsewhere and pay them back the money so they
can repay the government, simple as that.
So get on the phone and contact a few lenders ASAP to see if you can get a
mortgage with them.
get together all the paperwork about the house, mortgage with NR and bank statements, payslips,tax returns and ask.
try and get a 3/5 year deal and work hard at reducing the loan and therefore
building up more equity in your home.
I am with yorkshire building society ( no i dont work there !!) and there are lots of others , try local building societies and your bank (as they know you as a customer ) move from NR asap GOOD LUCK

beecher

Tillydot wrote: »

I am not a first time buyer. I have remortgaged quite a few times, like a lot of people have to just survive.

I think the fact that you've had to dip into your equity 'just to survive' should be setting off alarm bells about your situation, regardless of the credit crunch. It suggests you're living beyond your means, and I think hanging on is honestly the wrong move. If you're determined, then I think your best bet is going to a broker to see if there's any possibility of you getting a mortgage deal - I do think the arrears might be a problem, but you can but try.

If you are stuck on the SVR, can you manage? You could go onto the Debt forum and post a SOA where people might be able to give you advice on budgeting, if that'd help.

Tillydot

Thanks for the advice. I have already been in touch with mortgage brokers. As I said I have been offered another mortgage but the valuation didnt come in as much as we thought it would and therefore there isnt enough in the house with the new mortgage product fee as well. What I wanted to know is if we managed to pay the SVR can NR increase it at their will if they are so desperate to get rid of us?

chappers

Tillydot wrote: »

What I wanted to know is if we managed to pay the SVR can NR increase it at their will if they are so desperate to get rid of us?

Yep thats why it's called variable, they won't raise your rate specifically though.Post up your mortgage amount , the recent valuation and your income you never know one of the brokers on here might see a possibility for you.

beecher

Who knows what'll happen to the SVR - it could well go up, particularly if inflation gets out of hand and interest rates have to go up.

EdInvestor

It's hard to know what NRK will do: if they really start squeezing on the SVR they are open to political criticism, being Govt owned, so it's probably unlikely they will get totally out of line..

I'd have thought best to stay put, sort out your general credit picture/arrears and rein in costs with a view to overpaying the mortgage whenever possible to increase equity.

House prices may not crash but rather drift, though it's unlikely they will rise for a while.It's a difficult time for everyone, you are not alone, and everyone needs to tighten belts a bit, including all family members.

Rick62

Money raised on the credit markets in the uk is now running at less than a fifth of what it was the last 2 or 3 years, the lack of funds is like taking oxygen from a fire. Prices are and will come down, all serious economic commentators are now suggesting 20% to 30%.

owitemisermusa

neas wrote: »

over stretch yourself and this is what happens unfortunately . This is gonna be more of a n occurance when house prices drop more.

Now imagine your house drops by 10%.... you have even more negative equity... you can't move, you can't remortgage at all, you are stuck on a higher SVR... eventually you have to get repossesed.

I would say it would be best to try and sell your house and rent now... I know it sounds extreme but this is the best way to avoid more debt.... if you wait for houses to drop too much you will be in more negative equity... you wont be able to afford the mortgage payments and would be forced into a repossession.

This is nasty , What fixed rate deal were you on? Couldn't you have saved more of a deposit like most FTBers do?

I'm sorry but the OP asked for advice only, nothing else. Let's get with the program.

I can only suggest scouring the market for other mortgage deals - provded the terms are reasonable. I'm sure there's a lender out there for you.