Flexible savings plan with mortgage

fili65

I purchased my home last year as a right to buy property and initially had trouble obtaining a mortgage. I eventually got one at a hefty price to set up with a company. I have a two year mortgage agreement and the plan runs alongside the mortgage. I pay interest only but save additionally alongside the mortgage. At the end of every year the money saved and the interest is paid off the balance of the mortgage so the repayment on the interest eventually fall. However, since the collapse of the financial world I am now not benefiting. I paid off over two thousand off the balance made no interest and paid the company the sum of £60 for the privilage of making the payment. Can anyone out there advise me I am a key worker and wonder if I can change tact now?

Fliss

feisty1

who is yr mortgage lender ?..why did have a savings plan instead of a repayment mortgage?...ah...i've just read yr post fully, you don't need these companies in place for them to "overpay" on yr behalf, what company advised on the mortgage

dunstonh

We would need to know details behind the decision to go interest only with a repayment vehicle and why you chose that option. You certainly didnt need to go with that option.

We would also need details about the mortgage scheme you are on as it appears it is not a conventional mortgage either and these schemes all have differing rules.

fili65

feisty1 wrote: »

who is yr mortgage lender ?..why did have a savings plan instead of a repayment mortgage?...ah...i've just read yr post fully, you don't need these companies in place for them to "overpay" on yr behalf, what company advised on the mortgage

.

Actually it was a mate of mine who introduced me to the advisor he stood to gain a £50 introductury fee only. The mortgage lendert in Abby. Thank you for your advice just want to try helping myself now I have a mortgage in place. I believe you can pay up to 10% without being penalised.

feisty1

fili66: I have clients with these in place before, utterly useless..Can you remind me of the Co name who you "save" with

Check yr original mortgage documents section 11 this will tell you how mch you can overpay by. Just check if you end yr agreement with the savings plan they don't charge you for cxlg

11. What happens if you want to make overpayments?

fili65

dunstonh wrote: »

We would need to know details behind the decision to go interest only with a repayment vehicle and why you chose that option. You certainly didnt need to go with that option.

We would also need details about the mortgage scheme you are on as it appears it is not a conventional mortgage either and these schemes all have differing rules.

I initially was struggling to obtain a mortgage at my age 50, a first time buyer and also having the right to buy. Principal mortgage services Ltd in Worcester provided me with a two year fixed mortgage with Abbey and this flexible savings scheme to run alongside it. Instead of paying a repayment of £851.45 per month I pay interest only at £566.17 and save £200 per month towards paying off the capital which is done yearly. My monthly outlay is reduced by £85.27 and I get to save 6.23 years off my mortgage but this is projected savings based on a 3.5% indexation. With the plan which is transportable to any mortgage and lasts for the duration of 25years should I need it. It allows repayment holidays, underpayments, overpayments and no reliance on investment performance. it states it does guarantee to repay the mortgage. I am a key worker and wonder if I ould get a better deal now the market has dropped and there is now no interest?? I would welcome any advice Thanks

Fliss

feisty1

Quote: it states it does guarantee to repay the mortgage.
Fliss, i am quoting u, but what guarantees to repay yr mortgage?
What is yr actual deal with the Abbey, what rate are you on, are you tied in for any length of time ?

fili65

feisty1 wrote: »

fili66: I have clients with these in place before, utterly useless..Can you remind me of the Co name who you "save" with

Check yr original mortgage documents section 11 this will tell you how mch you can overpay by. Just check if you end yr agreement with the savings plan they don't charge you for cxlg

11. What happens if you want to make overpayments? The company in Flexible repayments Ltd in Worcester. Their new plan states I should pay £143.08 per month which would reduce my outlay by £205.66.
At the moment I am requested to pay £132 per month but choose to pay £200 they just pay it in one lump sum minus the charge of £60 per year fee. My original Mortgage docs state I can make a lump sum or regular payments at any time of up to 10% in a year any more and I would incur early repayment charges. It also states if the overpayment is used to reduce the amount owing the interest will be recalculated. I managed to make a payment of £2977.44 and my interest has been reduced to £551.93 instead of previous payments of £556.99.

Thanks for your advice and interest

Fliss


I am now thinking I have been a pratt but was glad to get the mortgage in the first place.


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fili65

feisty1 wrote: »

Quote: it states it does guarantee to repay the mortgage.
Fliss, i am quoting u, but what guarantees to repay yr mortgage?
What is yr actual deal with the Abbey, what rate are you on, are you tied in for any length of time ?

I hear you what does guarantee to repay??

My actual deal with Abbey is a two year deal ending ?June 2009 interest only payments at 5.74% mortgage is over 25yrs

feisty1

hear you what does guarantee to repay??

u wrote this in post 6

feisty1

Just check with Flexible repayments Ltd in Worcester that you can cancel the savings plan with them and not incur any charges..........Then fone the abbey & expain u'd like to make overpayments to yr mortgage...around march you should start thinking to review yr mortgage but make comparisons with what abbey's svr is, what deals they are offering before you consider moving away to another lender for another deal.......always plenty peope here to point u in the right direction............so dont worry