Thoughts Please ( Long Winded Post Alert Full Of Babble )

Bigadd_2

Hi all not been on for ages and ages. Stopped overpayng the mortgage to use the money to finnish off the house. Have budgeted to start overpayment in January as i will need all the money up until then on the house. ( Never buy an old cottage !!! )

I rang up my mortgage provider today Yorkshire Building Society to get an up to date figure of money outstanding its split into two parts both on a fixed rate of 5.69%. Part 1 is fixed until 31/01/2019 and part 2 is fixed until 31/01/2016 the total amount owed is £85,951.98.

When we start to overpay in January we can overpay by a whopping £850 per month, our mortgage is £604 per month. I have done some calculations on spreadsheet i downloaded from someone on here ages ago and i think im correct in saying we can be mortgage free in 5 years and 3 months once overpayment has started.

My question is this my wife is very keen on starting a family she is 30 and im 35 we would rather start sooner than later so if we didnt miss an overpayment at all in 4 years then tried for a family once the little fella/girl comes along we will only have £10K left on the mortgage what would be the best thing to do then get a small loan out and clear or carry on and pay standard rate (£604) ?????

It may seem very clinical the way im thinking but so so many of our friends have had kids and then go back to work only to pay childcare etc i cannot see the point the master plan would be for me and and wife to both go part time adn spend as much time with our child as possible.

Thoughts please and sorry for a long winded post i do rabble on i know !!!!!

Adam

PS We have no other debts only our mortgage.

MrC-117

Hi, couple of questions for you. Is there a redemption fee if you pay off a lump sum, like the £10k at the end? Also how long will be left on the mortgage after the overpayments stop?

It depends what happens to the Base Rate, etc. but I think the mortgage would be less interest than you'd have to pay off the loan so probably you'd want to keep the mortgage. Good luck! I always like to see people overpaying their mortgage

Bigadd_2

Intresting i dont know i will have to find out about if there is a redemption fee good point.

Im not very good at this sorry but after we stop overpaying we will have just over 10K left then it will revert back to our normal £604.00 per month so we will have around 16 months left to pay is that correct ??

Apolgies not very good at this and get easily confused !!!!!

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Tesco_points_addict

Hi Bigad, you need to consider that for some people (hopefully not you) baby making takes years.....what if you waited until you had finished paying your mortage off then babies didn't make an imediate appearence? From what I understand the younger you are (or you wife even!)the more likely you are to be able to concieve naturally. I can understand you wanting to wait as both working part time when you have little ones sounds idilic. Just something for you to mul over. Good luck xx

TPAx

MrC-117

If after the 4 years of big overpayments you carried on paying £604 a month then it sounds like it would be paid off in about 16 months.

That £604 after 4 years might still be an overpayment though. After big overpayments, many lenders will not reduce how long your paying the mortgage back for. In other words if you owed £10k and told the lenders you didn't want to overpay any more, they might recalculate and only want you to pay £90 a month for the next 10 years. Or something like that. Hope that makes sense

Bigadd_2

Cheers TPA

Good point and one we have thought of long and hard about my wife will only be 34 when we "Start" so fingers crossed should be ok i know nothing is certain in life though.

Your correct it does sound idilic but i honestly think its achievable we still save a small pot of cash to go on holiday with each year. We like you are fairly Frugal is there another way to be ???? lol

Again thanks.

Bigadd_2

MrC-117 wrote: »

If after the 4 years of big overpayments you carried on paying £604 a month then it sounds like it would be paid off in about 16 months.

That £604 after 4 years might still be an overpayment though. After big overpayments, many lenders will not reduce how long your paying the mortgage back for. In other words if you owed £10k and told the lenders you didn't want to overpay any more, they might recalculate and only want you to pay £90 a month for the next 10 years. Or something like that. Hope that makes sense

Ahha i see cheers for that we could live with that im sure how would i find out how they play it ring them up i guess ( see im even answering my own questions !! )

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Welshlassie

Being as you are fixed for so long, I check to see if therea re any redemption fees to paying off the mortgage befoe the end of the fixed rates.

The £805 that you can OP is this what you can afford or what the mortgage company will allow you to OP?

Bigadd_2

Welshlassie wrote: »

Being as you are fixed for so long, I check to see if therea re any redemption fees to paying off the mortgage befoe the end of the fixed rates.

The £805 that you can OP is this what you can afford or what the mortgage company will allow you to OP?

We can overpay 99% on the mortgage as that was one of my main concerns when we got it out. I will check about redemption fees but surely even if there is it still pays to get rid of it if you can ?

Welshlassie

So is the £805 what you can afford, in which cause this will increase (with any luck) each year and pay rises etc kick in, so you may be MF before you originally envisage. Even with a redemption fee it would still be worthwhile you paying it of, but include it in your calculations.

dimbo61

Hi I am also with YBS but on an offset deal
At the end of each year the YBS will send you a statement telling you how much you have overpaid and the new mortgage payment that will start in march/april !
All you have to do is ask them to keep the payment static ( IE the same mortgage payment as you have been paying)
If in 2/3 years time your plans change and the OH becomes pregnant then you can ask the YBS to recalculate your mortgage payment to spread the cost back over the original term and hence greatly reduce your mortgage payment ( while the OH is off work ).
Dont pay any ERC charges by spreading the much smaller mortgage over the last few years until your fixed term comes to an end. GOOD LUCK