Northern Rock 125% HELP PLEASE!

DRS1ONE

I have learnt the hard way!
I have a mortgage of 115000 plus a unsecured loan of 28000 both with NR.
I also have other unsecured debt totaling 37000. Total debt including mortgage 180000.
My fixed rate mortgage ends Feb 09. Do I have a chance in keeping my house?
Total income between me and my wife is 47000 per annum.
Current property value 130000.
Will anyone give me a mortgage?
Is my best chance to pay off as much unsecured debt as I can between now and Feb?
To add, which might be useful, I have checked my credit report through Experian and National score is 932 out of 1000.
I have never missed a payment on anything.

Leon_W

You'll have to weigh up a couple of things here.

Your income is good. I'm guessing you're on a Together mortgage and you presently owe NR (in total) more than the property is worth so moving all of this to another lender is impossible. Now, it is possible to move your mortgage of £115000 to another lender as this now represents 88% Loan to Value. There is a downside. If you move your NR mortgage the remaining Unsecured loan of £28,000 will go to a much higher rate so you have to weigh up whether the savings you make by moving your mortgage are completely wiped out by the higher rate you'll pay on the unsecured which I think they might be. Any savings would have to be compared with the whole lot falling onto NRs Standard Variable.

The other problem of moving the mortgage is that any new lender will then see you as having £63,000 unsecured debt which in todays climate is going to be an uphill struggle.

I would prepare yourself that you are going to be stuck on NRs Standard Variable and try and budget around that. Pay off the highest rate debt first
which is likely to be your other unsecured borrowings.

Regards

sarkin

Have you considered going IVA ?

silvercar

sarkin wrote: »

Have you considered going IVA ?

Why would anyone need an IVA if they have good credit rating, never missed a payment and can manage their outgoings?

DRS1ONE

I am not struggling to pay the debt and credit rating is good so why would I consider an IVA?

I do have an option of a family member taking on the 28000 unsecured loan in their name, but would like to aviod this if possible.

The belt has been tightened and we are paying off quite a bit each month. The worry is that it is not going to be enough by feb.

Would no lender consider me with the amount of unsecured loan amount I owe? is there a freshhold? e.g a LTV 90% mortgage max unsecured amount allowed 20% ?

Leon_W

"is there a freshhold? e.g a LTV 90% mortgage max unsecured amount allowed 20% ?"

No there isn't. Apart from a few very specialist situations, 100% or anything over it mortgages are simply not available.

As I say, it may be possible to move your mortgage but the interest rate on the £28,000 will increase pretty much negating any saving you may (or may not) make.

Its good that you are paying your debts down (pay the highest interest rate ones first) but given your current situation I feel that NRs Standard Variable Rate is your only option (unless they start offering new deals).

Regards

DRS1ONE

Thanks Leon W.

If I was to take the family offer and the 28,000 disappears.

Would I still find it hard to get a mortgage. I would stil have unsecured debt of around 30,000 ??

Conrad

Its impossible to say whether another lender will allow you a 95% remortgage, its going to be largely dependant upon affordability assesments made by machines.

Leon_W

Conrads pretty much right DRS. If the £28000 "disappeared" then that will obviously help.

Any prospective new lender would carry out an affordability check but given your income, size of mortgage and unsecured debt I would be hopefull that such a case could be placed with someone.

homer_j_3

and that assumes the value is what it is today.

maninthestreet

You've already posted about this once under your other userid, NorthernRockerRemortgager.