Newbie Here - any advice

Benson

Hi Im new to the MFW and am desperate to pay off the mortgage asap.

My mortgage is currently at 125k and am on a 10 year term as weve reduced the term by 3 years every time our fixed rate has ended but ive never overpaid on my mortgage as ive not even thought about it before?!?! Rate is 6.19


Im with the Abbey which reading a few posts on here are not the best company to deal with on overpayments.

My plan is that I would like to <fingers crossed> pay £500 per month on top of my mortgage, this would be within my 10%. I would love a money pig by my H is hopeless with cash lying around in money boxes he scoops it up and spends it in the pub!

Is there any way I can see what this does to my mortgage or could someone advise what I would need to pay if I wanted to pay it off in 5 years?

Do I just set up a standing order and it comes straight off my balance or do I have to arrange something direct with the Abbey?

Many thanks and fingers crossed 2009 is a good year for MFW

abouttimetoo

Hi Benson

Welcome to the MFW gang. I know youhave said that you can overpay by 10% but it's just worth me asking do you know for certain whether they will make any charges for the overpayments - some mortgage providers do this.

In terms of how you do it - there are many different ways but again I would recommend you speaking to Abbey as some methods can incur charges while some don't. The usual methods of overpaying can be: setting up a standing order for a fixed amount, making an on-line payment, sending a cheque, paying in at your local branch, asking them to increase you dirct debit.

You need to decide which is best for you and it maybe that you would like to combine methods, eg some people have a regular standing order then make additional overpayments on line as and when.

You also need to find out how your interest is charged as this will inform your decision as to when to overpay, e.g is it charged daily, monthly etc

To find out how much you would need to OP by to clear it in 5 years I would recomend that you use one of the mortgage overpayment calculators and have a play with them:D You can find them in the sticky at the top of the MFW forum

Let us know how you get on

jill2002

I am guessing that you have a daily interest charging mortgage as you have stated that you have changed your mortgage deal with Abbey. (as opposed to an old 'SLS' mortgage) Therefore, yes you are allowed to add capital repayments to your loan - up to 10% without penalty. However, if it is something that you want to do regularly - and continue, you would be far better to shorten the term of your mortgage which would increase your monthly payments. This would not eat into your 10% overpayment allowance as it is classed as your normal repayment. There is no charge to change the term of your mortgage either longer or shorter, and you could change the term now, then in say, six months time extend it again if you wanted to stop the overpayments. All you need to do is ring the Mortgage Centre and they will arrange this for you.

Hope this helps.

It is not possible to overpay by standing order - as well as paying your direct debit for the normal monthly amount, this would not be treated in the correct way and will have the effect of reducing your direct debit payment by the amount overpaid, therefore cancelling out what you intend to do.

If you want to make 'one off' payments (minimum £500) - either send a cheque to the Mortgage Centre with a letter of explanation or take a cheque/ cash into a branch and pay it over the counter. You must stress that it is a 'Capital Repayment' and a form will need to be completed and faxed to the Mortgage Centre. If this is not done (and this is why some capital repayments go wrong) then it will be paid onto your mortgage as a normal repayment and will again upset your direct debits.

StuartGMC

Welcome!

Benson wrote: »

I would love a money pig by my H is hopeless with cash lying around in money boxes he scoops it up and spends it in the pub!

My spreadsheet includes my monthly pub allowance of £50, but to be honest I don't actually count it but do know it is about right. Regarding your OH, you have a couple of options,
1) collect his cash (or more sneakily half of it) before he does and then pop it away to pay in each month against the mortgage, or,
2) remove the "unspent" cash upon his return if he is not likely to spot it :beer:

Is there any way I can see what this does to my mortgage or could someone advise what I would need to pay if I wanted to pay it off in 5 years?

Have you checked the various calculators like Egg or downloaded one of the spreadsheets in this board?

Good luck with the quest and hope OH joins with you.