We’d like to remind Forumites to please avoid political debate on the Forum.
This is to keep it a safe and useful space for MoneySaving discussions. Threads that are – or become – political in nature may be removed in line with the Forum’s rules. Thank you for your understanding.
📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!
The Forum now has a brand new text editor, adding a bunch of handy features to use when creating posts. Read more in our how-to guide
Another MFW! - Chelly's quest
chelly78
Posts: 61 Forumite
Hi there and Happy New Year
I'm afraid its yet another MFW although we are probably in a slightly different position to many of you.
My brother and I bought a house together in October 2007 (rubbish timing but there you go!). We have a 120K mortgage with Alliance and Leicester fixed at 5.79% for 2 years and are allowed to make annual overpayments of 10% in January of each year. We didn't manage the first year as we had only just moved in at that point after quite a bit of DIY.
This January we will be making an overpayment of £4000 which according to the documents will "result in both the amount outstanding on your mortgage and the amount of interest you pay being recalculated immediately". Does this mean that the monthly payment will be reduced and if so could I ask them to leave the payments the same even if it is a fixed term mortgage?
Also fixed rate deal comes to an end in August 09 so hoping to get a better rate then. Mortgage was 50% of the value when we bought it but that will have changed so I am hoping to keep the LTV to at least 60% by paying off another lump sum when the current deal expires. Is this possible without incurring penalties?
We both have full ISAs for the year and at least 6 months emergency savings each but obviously won't be living together forever so want to have the smallest mortgage possible when the time comes to go our seperate ways.
Any advice much appreciated. On a mission now to reduce the mortgage:o
I'm afraid its yet another MFW although we are probably in a slightly different position to many of you.
My brother and I bought a house together in October 2007 (rubbish timing but there you go!). We have a 120K mortgage with Alliance and Leicester fixed at 5.79% for 2 years and are allowed to make annual overpayments of 10% in January of each year. We didn't manage the first year as we had only just moved in at that point after quite a bit of DIY.
This January we will be making an overpayment of £4000 which according to the documents will "result in both the amount outstanding on your mortgage and the amount of interest you pay being recalculated immediately". Does this mean that the monthly payment will be reduced and if so could I ask them to leave the payments the same even if it is a fixed term mortgage?
Also fixed rate deal comes to an end in August 09 so hoping to get a better rate then. Mortgage was 50% of the value when we bought it but that will have changed so I am hoping to keep the LTV to at least 60% by paying off another lump sum when the current deal expires. Is this possible without incurring penalties?
We both have full ISAs for the year and at least 6 months emergency savings each but obviously won't be living together forever so want to have the smallest mortgage possible when the time comes to go our seperate ways.
Any advice much appreciated. On a mission now to reduce the mortgage:o
0
Comments
-
Yes contact your lender and ask if mortgage payment can remain the same after overpayment of the £4k.
Overpay as much as you can because you will not get savings rates to beat your mortgage rate of 5.79%.
GOOD LUCK0 -
goodluck with it. Sure we'll all enjoy reading your progress. I think you sound like you are doing really well.Top wins in 2018: Trip to Iceland, helicopter ride over london, couples massage, £300 flight from Pringles, trip to Paris, cocktail making class and afternoon tea up the shard. .
Top wins in 2017:holiday to the Bahamas, trip to Paris, meal with champagne, a week in a manor house in France with £500 spending money.0 -
Chelly
Once out of the fixed period you may or may not be able to overpay more, check. However, do remember you may well have fees to cover once you re-mortgage, so keep those at hand. Also, you presumably can pay in a lump sum with new lender at time of taking out new mortgage?
Start monitoring now and get firm data from your present lender.
Best wishes for 20090 -
I agree with others Chelly, keep cash back for fees and ask your lender what restrictions there are. Good luck!A positive attitude may not solve all your problems, but it will annoy enough people to make it worth the effort
Mortgage Balance = £0
"Do what others won't early in life so you can do what others can't later in life"0 -
Welcome
and 
0 -
Finally made the overpayment - now mortgage is £4000 smaller than before which feels really good. I asked Alliance and Leicester to keep the payments the same so now my term has been reduced, although its probably only by a couple of months!0
-
Congratulations! Well done!* * * Catriona's Credit Card Countdown * * * from -£16k to debt neutraldom - for my debt diary click here
Barclaycard -£5,867.52;
mbna1 - 3,009.22
mbna2 - 1,755.70
Savings £5,017 MFiT #25 £2,627/£10k; daily interest £5.040 -
Well done and welcome!0
-
Go for it !:rotfl:RosieTiger - Highest £242,000 Feb 2004 :mad:
Lightbulb Dec 2008 £146,000 by March 2026:eek:
MFi3T2 and T3 No 28 - Dec 2009 Start Balance £117,000
Current Position-Fully off set by savings since March 20130 -
Well done on the ops. 0
This discussion has been closed.
Confirm your email address to Create Threads and Reply
Categories
- All Categories
- 354.3K Banking & Borrowing
- 254.4K Reduce Debt & Boost Income
- 455.4K Spending & Discounts
- 247.2K Work, Benefits & Business
- 603.9K Mortgages, Homes & Bills
- 178.4K Life & Family
- 261.4K Travel & Transport
- 1.5M Hobbies & Leisure
- 16.1K Discuss & Feedback
- 37.7K Read-Only Boards