advice on becoming mortgage free

talks2fast

Hi,
I just wanted some advice on whether the idea ive had would be a viable way of starting the process to becoming mortgage free.
My husband and i moan about wanting to be mortgage free but havent taken any steps to get there, but i had an idea that because ive got an interest free overdraft which i dont use on my old student account, why dont we take the money from there, make an overpayment on the mortgage so that we're knocking some of the interest off, and then just make monthly payments to the overdraft account as if it was just another monthly bill, so that weve finally set the ball rolling with over paying our mortgage, but using interest free money! What do people think? is it a good idea?
Also, ive heard about stoozing to use credit cards to boost your savings, would it be possible to use credit cards to make overpayments to your mortgage? Could i get an interest free credit card, make a payment to my mortgage from it (which would again make a dint in the interest on my mortgage), that i could then pay off each month interest free! again, is this possible? Is it a good idea? Any advice would be greatly appreciated!
Thanks, talks2fast x

beanielou

Why dont you pop over to the mortgage free wanabee board?
welcome to MSE.

fermi

Hi, Martin’s asked me to post this in these circumstances: I’ve asked Board Guides to move threads if they’ll receive a better response elsewhere(please see this rule) so this post/thread has been moved to another board, where it should get more replies. If you have any questions about this policy please email [EMAIL="abuse@moneysavingexpert.com"]!!!!!![/EMAIL].

dimbo61

Becoming MF is a way of life !
Overpaying even by a little each month is a start
Using Credit cards which now have a 2.75/2.98% fee is not always worth the effort anymore and I am sure that the old student 0% overdraft will end up costing money.
Simple things like getting the cheapest gas,elec,home & contents insurance,car insurance, life assurance, quidco, cash back credit card,
cheap shopping, canceling SKY and being wise about your spending will save much more and you can use this money to clear your mortgage years early
GOOD LUCK

abouttimetoo

Hi there, yes your idea is a sound one as long as you are confident that you could always repay the interest free od if it was called in or reduced for some reason. Not sure if you are actually thinking about taking your od to the max in order to bring the mortgage capital down?

The other thing I was thinking is that if you are repaying money to your interest free account you need to take into consideration whether any interest you are getting on wherever the money is in the first place will be effected

Re stoozing - have a look at the stoozing sub section within the credit card thread on MSE for advice as there is lots to consider but again yes your thoughts are valid

You mention paying your mortgage via credit card - this is a particularly interesting question to me as I've been following a thread where a few people have been really really innovative here! Hopefully I can explain it clearly enough but you would really need to research it, check your credit card terms and conditions as well as check your mortgage providers T&C

Scenario one - stooze money via 0% interest balance transfer and put some or all of it into your mortgage (obviously you must have some means of repaying the balance when it is due as well as being able to afford monthly minimum repayments and establishing that the advantages outweigh any balance transfer fee you may pay

Scenario two - get credit card that has 0% on both balance transfers and purchases. Make normal - or overpayments - via credit card and have the money in your savings account for longer

Scenario three - as above but the card is also one that has reward scheme e.g. point, cashback etc so that you are also racking rewards up while paying for your mortgage

Scenario four - as above re 0% on balance transfers and purchases - I'll do this one with example figures - say mortgage is £10, 000 and monthly repayment is £x and you have a credit card with a £5000 limit. Make overpayment on cc of £5000 thereby reducing your mortgage capital that month to £5,000 (minus normal payment). Towards the end of that month ring mortgage company to get overpayment back and use to repay creditcard

The last one seems to be absolute genius to my mind but soooooooo many things to thing about and investigate, some of which are

• you need to be super organised
• you need to confirm with your mortgage provider that they will accept cc payments
• you need to confirm with your mortgage provider that they will return overpayments and how quickly
• you need to confirm with your cc company that such transactions will be classed as purchases and not cash advances!

In the last scenario some people seem to be pulling it off successfully although I don't know if the mortage company at some point will get sick of them asking for their overpayments back every month but how clever have they been - they are reducing the capital temporarily and therefore paying less interest AND racking up stuff via rewards on cards:D

Sorry, bit of a long post - hope that makes sense. Please note I'm no expert and you really need to fully investigate such things