What is going to happen?!?!

sarahbrown58

Sorry if this has already been discussed elsewhere but I cannot find anything.

We took out a northern rock mortgage 2 weeks before their downfall.

We took 2 years fixed 100%.

It runs out September 09.

With the current state of economy what are our chances/options going to be when it comes to September 09.

We wont have paid much off of the mortgage due to interest and start up costs...

Will Northern Rock remortgage us? If not will another lender touch us?

We have no problem making the payments as they are now, and can afford a substantial increase when I get a salary rise also September 09.

sarkin

Its hard to tell by 2009 but you will be possible in negative equity. Best to overpay on the mortgage to keep up.

At the momment the rock only have variable rate at 7.83% for existing customers. They need to get everyone off the books to give the money back to the goverment.

At least you asked the question now and not 2009

Conrad

I agree, if possible try and over pay the debt to reduce the capital balance. Sept 09 is a long way off, but its quite feasible there will still be no 100% options by then.

homer_j_3

Also if you took the Help with Costs option (if they still offered that at that point) then these will be repayable if you move in 2 years time.

Dan_Collins_2

I agree with the above. We cant tell what will happen between now and then. You can over pay to help. Did you borrow 90 or 95% secured?

I imagine that they would have paid a big chunk off of that debt to boe by then do fingers crossed they may help you.

sarahbrown58

we borrowed 95% i think and 5% unsecured, we have no spare cash to overpay but will have a substantial salary increase at the time the mortgage ends. we have no wish to move at the end of the fixed period - but what happens if no one remortgages us - i guess we will have to stick with northern rocl? do they have a duty to remortgage us?

tommyc352

You would go onto their SVR - as the 2yrs fixed rate is the introductory/teaser rate. Your mortgage with NR would last for however long you took it out for 25/30 yrs etc.

Something that I learned on the boards here, its so easy to think your mortgage is just for those 2yrs before you can switch to another product, but you should always be aware of the SVR as it may not be possible to switch. NR SVR is quite high - im coming to the end of my fixed rate with them in June and I think its around 7.5

Are there anythings that you can cut back on to overpay the mortgage? I'd imagine £50 -£100 extra per month is better then nothing.

sarahbrown58

unfortunately no, not at this point. hubby is seeking promotion and i pay my car off march 09 so then at the least we could pay an extra 75 a month for the last 6 months of the fixed rate

sarahbrown58

i could always get a student loan... and pay tha tinto mortgage i guess

Gorgeous_George

You may be better off saving in Cash ISAs than overpaying for two years.

Just check your mortgage rate versus the ISA rate. If the ISA is higher, that's the one to go with. After two years you will probably need to find another lender or go on to NR's SVR.

I think that by September 2009, NR will have given up on their aim to reduce the mortgage book by 50% (unachievable) and your SVR will be more competitive. If not, keep your fingers crossed that the cra...orrection is less severe than many expect.

GG