Northern Rock refuse to renew mortgage...?
Discussion
Hi all,
I have a friend that bought a house jointly with another friend.
They took their mortgage out with Northern Rock in March when everything was seemingly ok.
As they had no deposit due to various reasons, they took out a 95% mortgage and a further joint personal loan to provide the £5k deposit. House was £100k. Everything was going well.
Their fixed rate ends in March '09 and NR have written to them stating that they are not prepared to offer new terms and as such will not be providing a mortgage after March. They've never defaulted, never been late with a payment and haven't got any CCJ's or any other debt issues.
With house values dropping, they are lucky enough that the improvements they have made to the house will hold it's value around the £100k mark.
What can they do before March..? Can NR do this to them..? They've arranged to see a mortgage broker to try and sort something out, but are understandably worried with house prices still sliding. They are both in employment and have good credit rating.
Seems like Gordon's new acquisition is crapping on them from a great height to me.
I have a friend that bought a house jointly with another friend.
They took their mortgage out with Northern Rock in March when everything was seemingly ok.
As they had no deposit due to various reasons, they took out a 95% mortgage and a further joint personal loan to provide the £5k deposit. House was £100k. Everything was going well.
Their fixed rate ends in March '09 and NR have written to them stating that they are not prepared to offer new terms and as such will not be providing a mortgage after March. They've never defaulted, never been late with a payment and haven't got any CCJ's or any other debt issues.
With house values dropping, they are lucky enough that the improvements they have made to the house will hold it's value around the £100k mark.
What can they do before March..? Can NR do this to them..? They've arranged to see a mortgage broker to try and sort something out, but are understandably worried with house prices still sliding. They are both in employment and have good credit rating.
Seems like Gordon's new acquisition is crapping on them from a great height to me.
You mean they will be on a floating rate mortgage?This happened to a workmate of mine.
Came to the end of his fixed rate and while they didn't refuse, they made it very difficult to stay with them.
In his own words, he got 'raped' having to change mortgage provider.
I think they're just trying to claw as much money back as possible.
Mine's up in 2011. Just hope things are on the up by then.
Came to the end of his fixed rate and while they didn't refuse, they made it very difficult to stay with them.
In his own words, he got 'raped' having to change mortgage provider.
I think they're just trying to claw as much money back as possible.
Mine's up in 2011. Just hope things are on the up by then.
NR are not asking for their money back, they are refusing to offer a new incentive.
They would like your friends to remrotgage with a new lender.
Deopends what deal they have,they will most likely go onto SVR or a tracker over base. (Read the offer it will spell it out in there.
If they have a high LTV, then SVR is most likely their best bet at the moment.
It will cost them nothing to set up, and has no redemption penalties.
Are they in a position to overpay? If so, tell them to get on with it.
If they want a 2nd opinion on what the broker or NR say to them I'll happily run thorugh things with them.
They would like your friends to remrotgage with a new lender.
Deopends what deal they have,they will most likely go onto SVR or a tracker over base. (Read the offer it will spell it out in there.
If they have a high LTV, then SVR is most likely their best bet at the moment.
It will cost them nothing to set up, and has no redemption penalties.
Are they in a position to overpay? If so, tell them to get on with it.
If they want a 2nd opinion on what the broker or NR say to them I'll happily run thorugh things with them.
carmonk said:
scotal said:
NR are not asking for their money back, they are refusing to offer a new incentive
In that case it's a very different story! That needs clarifying because the OP makes it sound like they are withdrawing the loan.I will be clarifying the letter wording later on this evening with said friend.
I'm thinking that the letter is worded in such a way that it instigates the kneejerk reaction it has.
We shall see....
Edited by Dover Nige on Thursday 4th December 14:51
Update:
Had a look at the letter and it appears the same as the one that Bahn-Stormer received.
It appears to me that the current mortgage will indeed drop onto NRK's SVR as opposed to being totally binned. However, towards the end of the letter it says that NRK regret that they won't be able to offer a deal on this mortgage. To the quick glancing read, it does "seem" that they won't be renewing, but after digesting the contents and explaining it to my friend, the initial worry that the letter brought has now subsided somewhat. It also suggests that the borrower should indeed look elsewhere for a mortgage.
A badly worded letter IMHO.
Thanks for all the advice and suggestions. The worry has subsided that they will be unable to get a mortgage, but with the values going pear shaped on so many houses and lenders asking for min 85% LTV for any fixed rate or tracker mortgages, how many people are going to end up on the SVR and completely in the s
t when the interest rates shoot back up (which undoubtedly they will)...?
It's a scary outlook for many.
Had a look at the letter and it appears the same as the one that Bahn-Stormer received.
It appears to me that the current mortgage will indeed drop onto NRK's SVR as opposed to being totally binned. However, towards the end of the letter it says that NRK regret that they won't be able to offer a deal on this mortgage. To the quick glancing read, it does "seem" that they won't be renewing, but after digesting the contents and explaining it to my friend, the initial worry that the letter brought has now subsided somewhat. It also suggests that the borrower should indeed look elsewhere for a mortgage.
A badly worded letter IMHO.
Thanks for all the advice and suggestions. The worry has subsided that they will be unable to get a mortgage, but with the values going pear shaped on so many houses and lenders asking for min 85% LTV for any fixed rate or tracker mortgages, how many people are going to end up on the SVR and completely in the s
t when the interest rates shoot back up (which undoubtedly they will)...?It's a scary outlook for many.
I'm just taking out a fixed rate mortgage, and the cost of the fixed rate is higher than the SVR (583 -v- 634), and that was before the rate cut this week.
The only reason I'm taking it is at least I will be able to budget for the first few years, knowing that my mortgage isn't going to change.
It is worth your friends checking this out, with NR, and other providers. Get a cheap SVR now, and as the rates increase, so will the availabilty of F.R. mortgages. Due to the mortgage being on the SVR, there will be no hidden penalties with moving to a F.R. at that time.
The only reason I'm taking it is at least I will be able to budget for the first few years, knowing that my mortgage isn't going to change.
It is worth your friends checking this out, with NR, and other providers. Get a cheap SVR now, and as the rates increase, so will the availabilty of F.R. mortgages. Due to the mortgage being on the SVR, there will be no hidden penalties with moving to a F.R. at that time.
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