Mortgage/Savings

ironman1

We were silly really but you know what it's like, young and not really thinking about it all in too much detail. Im going to book an appointment and sort it out as we would NEVER live to pay off the Mortgage if we stuck to what we are on now, remember that 40 years is to pay off our 60%!

If anyone else is in the same position or has been, advice would be great. Thanks to all the others by the way

staffie1

Good luck with it and let us know how you get on

JayneG

As I understand it (and only from reading on here - I'm no kind of expert!) there is no penalty for reducing your term when when on a fixed rate, which seems a bit too good to be true really seeing as you can get penalised for overpaying in excess of your allowed limit, which surely amounts to the same thing really?

Others more in the know will be able to confirm/deny...

ironman1

I understand a bit more already since my post. It would be great to turn it into a 25 year mortgage which according to a payment calculator I used, would work out roughly £70 a month more. 550 instead of the 480 a month we are currently paying. Unless something happens with our jobs or something we should be able to afford that quite easily, touch wood. Seems far better than having leftover cash that we don't do alot with!

staffie1

s.h.m.w wrote: »

I understand a bit more already since my post. It would be great to turn it into a 25 year mortgage which according to a payment calculator I used, would work out roughly £70 a month more. 550 instead of the 480 a month we are currently paying. Unless something happens with our jobs or something we should be able to afford that quite easily, touch wood. Seems far better than having leftover cash that we don't do alot with!

And don't forget you can take out income protection insurance to run alongside your mortgage so if the worst happens and you get made redundant, at least your mortgage gets paid.

Lynn11

I would speak to your lender as you say and find out the different monthly payments for reduced years, as well as if you are allowed to make overpayments monthly or yearly and by how much. Therefore, if as you say your monthly payment only increases by £70 to reduce the years to 25 and you are able to still make more payments of say £100-£150 - you can make overpayments when you feel you are able to and if one month you are not able to then it is not a big deal, but it is amazing how if you do this with larger amounts of £200-£500 (if you can afford) knocks a large amount of money off your mortgage, allowing you to reduce your term even further in a few years time if you wish. Hope you understand the above. We overpay every month £250 (we are allowed to overpay £500 max every month) as well as putting money in savings. So far in the last 3yrs we are overpaid by £9450 so I believe this is a good place to be if we needed help in anyway.

ironman1

Thats great advice.

I have always saved but done things I enjoy since I started working. I always go on a couple of holidays a year, go to football every week and so on. I dont do things like going out drinking as much or buying clothes. It is easy to save money if you're not a wanting sort of person.

staffie1

s.h.m.w wrote: »

Thats great advice.

I have always saved but done things I enjoy since I started working. I always go on a couple of holidays a year, go to football every week and so on. I dont do things like going out drinking as much or buying clothes. It is easy to save money if you're not a wanting sort of person.

You've got a good attitude to money considering you're young. You'll go far my friend!

ironman1

I think it's because I've seen what debt can do to people, I dont know many people that save any sort of money. I started saving when I was about 17 and all of a sudden had £10,000 to pay the deposit to our first place. It's strange really cos I have been on alot of holidays and as I say I go football every week which involved a whole day of drinking/spending! But I can go the whole five day week barely spending a penny. It's strange really because i've never had amazingly paid jobs either.

Also with things like Tax rebates, I've always saved at least 50% of each of them. I try to get it through to the other half but she isn't the way I am, she could spend every penny she gets but luckily isn't that bad!

staffie1

s.h.m.w wrote: »

I think it's because I've seen what debt can do to people, I dont know many people that save any sort of money. I started saving when I was about 17 and all of a sudden had £10,000 to pay the deposit to our first place. It's strange really cos I have been on alot of holidays and as I say I go football every week which involved a whole day of drinking/spending! But I can go the whole five day week barely spending a penny. It's strange really because i've never had amazingly paid jobs either.

Also with things like Tax rebates, I've always saved at least 50% of each of them. I try to get it through to the other half but she isn't the way I am, she could spend every penny she gets but luckily isn't that bad!

So, how do these tax rebates come about..?;)