pammyj74's MFW diary (or possible wishful thinking!!)

pammyj74

I didnt know about this thread but glad I found it.
I am such a novice and have no clue about any of it other than the more I pay off the less interest and quicker I pay it off!! I dont understand how to work out the figures such as interest being paid etc either

I have been overpaying my mortgage by about £100 a month and did a lump sum. I have paid £1100 so far this year but hope to maybe get it to £2000 by the end of the year. Not sure that is possible but i will give it a damn good try

Right I am about to ring my mortgage people and want to ask some questions just to make sure but would like to know if there is anything else I need to know.

I have roughly about £89000 left on my mortgage and a fixed rate of 5.89 until feb 2010. I have just under 21 years 6 months left

I have read in my documents that the interest is daily so it is good to pay it off as and when I can
I havent had a statement since nov last year so I need to know how much is o/s and also the term left.
I also need to make sure the payment are coming off the mortgage and not the interest (is that right?)

I feel so dumb about it all and hope there are some helpful people here (which I know there is!)

I am a single parent and save my money by doing tesco shopping with mocs (this saves me approx £100-£150 a month) not any more boohoo I do car boot sales (recently done one this weekend and made £140)
I did do ebay before but have stopped as I dont like there charges.
I have just started doing comps again and hoping that I might get a few wins which I can then sell to make more money. this takes me about an hour a night and is quite fun actually (no luck yet tho )
I am not sure about ISAs and whether I have enough money to save into one of them as well as paying extra on the mortgage!
I am amazed at how people do it all.

So my goal is to pay £2000 a year.

Any help appreciated, thank you
Pam
:beer:

Pee

You are doing great. Nice to hear about it.

pammyj74

Have just rang the mortgage people and they tell me that I have £86,818.62 which is a couple of grand less than I thought for some reason!!
I checked that the OPs are coming off the mortgage and he says they are but when the base rate goes down my payments go down too but that I could just set up a standing order to keep the monthly payments the same. But rather than me doing that I will just add the few quid onto the OPs to save faffing about.
and i was right that there is 21 1/2 years left.

so from the egg calculator it reckons that i have

£155,073.96 to pay if i keep the payments the same and 22 years (only in full years)

if i pay £100 a month (£1200 a year)

£135,810.01 saving £19,263.95 and paying it off in 16 years (i'll be 51!)

if I pay £150 a month (£1800 a year)

£129,891.17 saving £25,182.79 and approx done in 14 years 3 months (i'll be 49!)

and £200 extra (£2400 a year) would be paid in 13 years ish.

would ideally like to pay the mortgage off in 10 years but not sure how feasable that is as yet.

Pee

How about setting up a standing order for the amount your mortgage would be if interest rates were higher? Maybe 8%. You could then feel confident that whatever happened to interest rates, your payment wouldn't change and be clocking up a substantial overpayment.

Peelerfart

Pee wrote: »

How about setting up a standing order for the amount your mortgage would be if interest rates were higher? Maybe 8%. You could then feel confident that whatever happened to interest rates, your payment wouldn't change and be clocking up a substantial overpayment.

Which is exactly what we do we're currently on a tracker at +0.38 above BofE but paying as if it's a lot higher . It's like a DIY fix rate ,so we can clear the debt earlier.

pammyj74

yeah I did think of doing that but its only a £3 difference lol. So i did think about setting the SO to £50 extra a month and then still trying to pay the extra £100 on top if and when I can afford it.
I pay £595 at mo and he says it will be £592 next time. So do I just cancel my DD and set up my own SO?

I am also planning to cut a couple of years off the payments when the remortgage is due next Feb depending on how much the offers are.

Pee

If you speak to the mortgage company, they would alter the DD, but I see your point, if it is only £3, then you are much better with the £50 standing order and the extra payments when you can.

Peelerfart

Cutting a few years off your term is the same as overpaying but without the flexibilty to stop,

Don't want that to sound negative because in truth I've done it ,but I do sometimes wonder if it's wise.

Self contradiction I know but what do others think ?

pammyj74

Yes I see what you mean, you are then stuck into paying the extra each month and cant get out of it if you cant afford it. But this also makes you pay it.
I think i will just have to have a look and see what the payments will be and if they are not too much more than I am paying now then thats good.
With the standing order can I cancel or alter that at any time myself? So if i set up to pay £650 and then find I cant keep this up can I go back to £600?

I can do this online and cancel the DD myself? and set up the SO myself? Or do i need to do this through the mortgage company?
they did say they could alter the DD but he says everytime the base rate alters I would have to keep ringing them to change it again whereas if I set an SO it would always stay the same as I am making the payments instead of them requesting it.

Peelerfart

Just reread your OP Pammy and unless I've missed something you don't say you have a "emergency fund" of a few months money.

I'm not saying that you should or shouldn't but there is a school of thought that says that it's more important than making overpayments .
It's your decision at the end of but once you overpay your mortgage it aint easy to get the money back cheaply.

To answer your question I pay by DD and Email the bank (HSBC) when I want to change the amount. Never had a problem

pammyj74

i have a very small savings account, its only £700 and i try and add to it when i can (was more but bought a laptop and took out money for holiday spending money last month)

thanks for your help