When selling, can you keep the personal loan part of a NR Together Motgage?

albreda

Hi

Can you keep the personal loan aspect of the Together mortgage when selling your home?

eg. We borrowed 135k mortgate and 20k unsecured personal loan with Northern Rock.

We have sold for 175k. Can we just repay the 135k and take the 40k, or must the mortgage and loan be paid off at the same time?

Thanks

mpsavuk

Who did you find to buy your house off you and pay off your debts for you? Are they First time buyers?

HelpWhereIcan

You can repay just the mortgage, but the interest rate on the personal loan is likely to go up to approx 13%. So unlikley to be the best thing to do for most people.

You will have to do your own sums as to whether or not you may be better off switching that loan to another lender.

homer_j_3

Its 8% above Base rate so as HWIC has said, you are looking at an expensive loan.

When did you take the mortgage out?

mircea

mpsavuk wrote: »

Who did you find to buy your house off you and pay off your debts for you? Are they First time buyers?

The op has come here for advice - to whom he is selling, how he got into debt or whether we should have saved the tazmanian wolf or not, are all matters beyond the scope of his post. If you have any advice pertinent to his post, good. If not I suggest you take a hike - why don't you go into the debt free wannabe board and start laying into them - see what they say.

Treadmill

The problem i can see here is that if you pay off both parts you will only have a 15K deposit to put down on another house, is that enough or will you just end up getting another unsecured loan that could work out just as costly of the unsecured product you have with NR ?

Ian_Griffiths_Halifax

Not all of the Together Mortgages had a loan that reverted to a high rate above SVR if you paid off the mortgage only. Some of the early ones went onto something in the region of 3% above SVR If I recall.

The best thing for albreda to do would be to check the original offer letter for the conditions and call Northern Rock, but in answer to the original question, as others have stated, yes you can keep the personal loan part if you sell the house. If you are buying another though, just bare in mind the fact that the payments to the loan will usually be taken into account by the new lender before assessing what you can borrow.

albreda

Thanks to all those who have posted with information, points to consider ect. My circumstances are such that I will have to take the path of repaying the morgage and keeping the unsecured loan, as the sale is going through just now and there is a secured loan on the flat.

I understand that the secured loan must be repaid in full at settlement of the flat and cannot (even part of) be converted into an unsecured loan?

silvercar

Correct.



....

luckyfool

If there is equity in the property to pay the Secured loan off then it will get paid off. They will only consider converting some of it to unsecured if there is a shortfall, and then only because they do not have much of a choice.