We took out a Northern Rock Together loan in March 2006 off of the back of another from a different property in 2002. We took it on Interest only with the intention of only staying there for 3 years. The house was 18 months old when we bought it. We foolishly thought that it would increase in price, as our previous property had.
In January 2008 I had my son. We took the 7 month payment holiday available to Northern Rock customers, adding the payments to the mortgage. We fell behind early 2009 after a period of maternity leave. Then the dreaded credit crunch happened and the rest is history. Our house fell in value and is now worth about 5-10k less than we paid for it. Many other houses on our street went up for sale around 2010-12 and were selling at ridiculous prices. We paid £149k and neighbours were selling houses at £120k. This had a knock-on effect when being valued for mortgage purposes. Most recently a neighbour sold hers last year at £142k so, as long as things stay stable, there may be some hope.
I’m not sure how NRAM, (or whoever now owns the book) calculate the interest but I’m sure that our balance should not have increased by 10k from one statement to another? I did see that people had noticed calculation problems?
We have tried to sell our house over the last 12m as the area has declined in the last 10 years. It has become unrecognisable. My hubby is in the police and is worried he will be recognised on the street, given that he knows a few people in an official capacity. I refuse to sell it for a silly amount, therefore we are trapped.
A google searching by my husband revealed that we are only allowed to rent the property out for a maximum of twelve months and so even that is a lose-lose situation. Both my kids are at high school nearly 10 miles away and we are desperate to move nearer their school. We can’t see any way out, short of a lottery windfall!
I see that the Government are trying to help people that simply can’t move the mortgage to other lenders. This does not help those that are in negative equity or that have already lost their homes.
This situation has caused both my hubby & I sleepless nights and no end of stress