If you had money in Northern Rock

Would you draw it out today ? (doh) (doh)

 

Why??? nt

 

They're in the poo.

Unfortunately I don't think that means that we get away with not paying any mortgages we have with them.

 

Our mortgage is with them

and to be honest when you are talking about 10s of thousands of pounds you do get nervous ... I will be discussing this with the present Mr Fired tonight. We are planning to extend the house & up the mortgage. The last thing we need is for it all to go belly up.

 

RE: Our mortgage is with them

in your case you just need to remortgage with another lender,if they are limiting that side of the business,seek out chorley on here,he's the man for remortgaging.

 

Cheers

Will certainally have a look into that.

 

But a good time to buy shares nt

 

Northern Rock don't have the level of deposits with them, in relation to their mortgages, that most other banks do. What they do is to borrow money from financial institutions at low rates to finance their lendings, i.e. they'll borrow millions at say a 3% interest rate and then offer mortgages at 5%. The problem is because what has happened in the sub-prime market the lenders are getting jittery so aren't lending the money out or if they are then the rates have shot up, NR are well run and manage this very well but have unfortunately been caught up in what's gone on elsewhere.

If people don't panic then they should be fine, but that's easier said than done, and I could see quite a few people closing their accounts and deciding to move their savings which would then cause a problem for NR.

 

I would be a bit 'jittery' if my money was involved

not unheard of for a major bank to go tits up is it. Look at the case some years ago when thousands of investors got sweet FA. when a bank went down

 

Which bank?

If you mean Barings, they were solely (I believe) an investment bank so monies lost were not direct "savings".

Also a dim bint on the radio has just mentioned Equitable Life collapse. Surely a completley different situation.

The only thing that will make this an issue is panic

 

You don't need to worry

Your mortgage is one of their assets. If they go belly up their assets will be sold and the only impact you will see is a different name on the headed papaer and you'll have to set up a payment to a different company, but it should not affect the terms of your mortgage.

If you are in a fixed deal it will cost you money to get out and that would be a pointless waste of your money. I have a Northern Rock mortgage and so I went and checked things out ... vaguely hoping that if they went bust I wouldn't owe anyone. I just typed "What happens if my morgtgage provide goes bankrupt" into google.

If you have savings and they go bust I suspect you'd lose them, but if you owe money then don't worry ... the loan is safe you've no chance of losing it!!

 

If they don't go bust

or drop even more.

It's a brave man that buys shares on the first drop in a situation like this. There could be more bad news and there's still some way to go. I bought Somerfiled shares a few years ago @ 50p when they'd been up at £3, but it took a number of drops before they go that low!

 

RE: Which bank?

Thats it could'nt think of the name 'Barings' But Northern Rock is a sort of 'Investment Bank' you invest your money and they lend it out to somebody else the difference in interest rates pays you a dividend. Not a lot of difference.

 

...then there was my mate Mike...

...who had plenty of shares in Marconi when they starting going down. No worries thinks he, I'll just make best of the situation and buy some more while they're cheap. Then they went down again. So he bought more. He ended up losing all his and his wife's savings (not that she knows!) by the time they disappeared completely.

 

Ouch!!!

That's a pretty bad share trading strategy. You can almost never recover losses in shares by buying more. Mind you I've been in a syndicate where we tried it ... we also lost all of our money but it was only £200 each, and we did it on the basis of "it's only another £100"

Buying shares that are falling is risky, buying more to try and recover your losses is verging on crazy. Companies that have sharp downward corrections in their share price, rarely get back to their original value in the short term.

Northern Rock shares might end up being a good punt, but it's a high risk punt at the moment. Two options

1) Buy them and set a target to bail if they drop say another 30%

2) Hold onto your balls and be preparred to tough it out until they either increase or go bust

With my limited knowledge of tradingh option 1 is the only sensible one if you are going to punt on a falling share. Buy, but set a target when you buy and be prepared to bail out well before you lose all of your money.

If anyone else has any better ideas I'd be interested to know what they are.

 

big ques apparently outside NR in Kendal