Paying the car tax via EBay, and other shenanigans.

OK so more mortgage chat. Sorry. I probably should get a MF diary too . However the findings may prove useful for some.

First issue seems to be when we moved house 8.5 years ago. When you apply for the mortgage it's a few months until you actually complete. So I think what happened is that I gave them a mortgage term that was accurate when I applied, not when we actually moved. Therefore, the actual end date is about 5 months later than we thought. I can't be sure this is exactly what happened; but the Term was clear in our offer letter so I had a chance to query it. Can't blame the bank for this one.

Now onto the Term remaining. This hasn't gone down at all which is what threw me. Or rather, it has gone down by the appropriate amount of calendar months, not any more than that. When I called the bank, they said if you wanted to reduce the term you had to apply to do so. I was a bit confused as I presumed reducing the outstanding balance must by the very nature reduce the Term. Apparently not. Still confused? Me too. What this means in reality is that I still have a 14 year window in which to pay, so when my fixed rate ends, the new payment will be calculated based on the 14 year Term. I guess I can see why this might be so. But I asked to be told what my current end date would be, based on overpayments to date, and they said they couldn't tell me. I explained that I was about to remortgage, and I wanted the new mortgage to be based on my current "term", not the official 14 years I have left. That didn't seem possible, but she is apparently having a letter sent out to tell me that. I've also asked to be told what overpayments I've made in total. That way I guess I can work out how many months capital I've overpaid so far. I know it's at least 6 but must be more as we were on a cheap tracker back in 08/09 when base rates hit the floor.

Anyway, it was news to me that the remortgage worked this way. Essentially our new payment would be lower than we'd want. This wouldn't really matter if we were staying put, as we'd continue with the exact same £ payment each month as we are now, in which case our overpayment would be greater. However as we are looking to move and increase borrowing it confuses things a little.

Still, forewarned is forearmed.

In proper DF news, I had beans on toast for lunch. Complete with free prize winning cheese, they were delicious :rotfl:

So we might have changed our mind about the mortgage, it's still undecided. As the house is about to go on the market, we would (hopefully!) be moving well within the ERC period, as a new fix means another 2+ years. We can port within 3 months of selling here and get that refunded; but if we didn't find our dream home* within the 3 months we'd have to pay the ERC as well as the fee for remortgaging in the first place. So that would be around £5k in fees in total, versus a saving of less than £200/month. Of course if we DO manage to move within the 3 months, we'd have overpaid on interest - but the exposure is far less that way. I'm also not sure if we'd have to pay another fee for extending the borrowing. In which case we definitely shouldn't remortgage now - the £1k fee would not be covered by reduced interest for 5 months.

*The problem is we want to buy somewhere with land and the options are often limited, so it's a real possibility we will have a gap between homes.

Anyway we have until 22nd to sign the paperwork so are sitting on it for a few more days.

Oh yes the mortgage. I found out that we WOULD need to pay another fee on additional borrowing. So have not remortgaged right now and will leave it for a couple of months to see what happens with the house.