How is it Done?

emma_marie · 26 February 2007 at 1:22PM

Having just brought my first house with the OH I am new to all of this mortgage talk.

Firstly...how do you even make overpayments?!? We are with HSBC and have been told that we can make overpayments of 20% of the monthly payment each month at no extra cost but have not been told how to do this!

Also, as a young couple, what are the best tried and tested ways to pay off a mortgage and become mortgage free? I love the mortgage pig idea and am definitely going to invest in a mortgage pig to deter us from having the odd take away when we are feeling lazy. Are there any other suggestions for those on a budget to become mortgage free?

angelavdavis · 26 February 2007 at 1:42PM

You can set up a standing order to credit the account from your bank account if you want to make a regular overpayment, or simply write a check and walk into a branch with your mortgage account details and pay over the counter.

These are stickies at the top of this forum presenting tips on becoming mortgage free. Basic rules, stay focused, maximise your earning potential and live frugally.

southern_chick · 26 February 2007 at 8:33PM

Speak to someone at your bank to make sure you are doing it the proper way but as Angela says just going in and paying over the counter works well. you could always ask the bank to increase your monthly standing order that way the extra gets paid each month so there is no chance of spending it by "mistake", hth SC xx

lixi · 2 March 2007 at 5:47PM

I am currently making overpayments on the same basis with HSBC. I just called customer services and asked to increase my monthly payment. I had calculated the max before calling and doublechecked with them that it was ok. They then sent me a revised statement confirming the effect that it would have which was nice to see ;-)

lixi · 2 March 2007 at 5:51PM

Also if you want to knuckle down and really scrimp and save towards your mortgage, check out the DFW board - there are some really good hints and tips on budgeting, post a SOA over there and the bods will tell you how you can save money.

Lixi

tranquil_2 · 2 March 2007 at 6:34PM

I'm not sure with HSBC but with Nationwide we had to stipulate that we wanted the term of our mortgage reducing, not the monthly payment.

This meant that as our payments were the same (i.e. what we had budgeted for), we could still overpay by £500 a month (maximum we can overpay), any spare cash after that goes into a savings account to pay off lump sum when product ends. If we hadn't specifically asked for the term to be reduced, they would have automatically reduced ourr monthly payments (thereby not allowing us to pay so much off a month).

Our regular payments go out Direct Debit, overrepayments by standing order.
As Southern Chick says, check with your bank how they want you to do it.

Good luck!

tranquil_2 · 2 March 2007 at 6:39PM

Oh and check out the Old Style board - full of good ideas for money saving on a day to day basis (looking after the pennies...!;) )

How is it Done?

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