Over payment advice

tracybaby

Hi there

I previously posted this as a reply as I am not quite myself, read on and you will see why.....................................:mad:

I overpaid my mortgage for 3 years, and today we accepted an offer on our house. I called our mortgage provider to enquire what my actual balance was and they commented that we had over £6K in credit. I asked why this had not been taken off of our mortgage as we were paying it, and he commented that we would have had to call their HO to request this.

I innitially made the call 3 years ago and carefully asked the following;

1) how was the interest calculated? (to decide like you, if we were to pay in a lump sum or periodically).

2) if I paid made the additional payments, would this reduce my balance each month and we would not have to pay interest on it?

They confirmed this would be the case, however I am now in a position that , yes my mortgage was less than I had anticipated, however at no point did anyone make me aware that I would need to call their HO to have this extra payment deducted off of my overall balance.

I am going to call their HO tomorrow, and try to get them to calculate the intertest on my mortgage (that I had paid but shouldn't have) worked out and reimbursed.

Anyone have any inclination where I would stand legally?

Thanks

Newbie Tracy

somethingcorporate

Legally you'd be bound by the terms and conditions of your mortgage.

What do these say with regard to overpayments?

tracybaby

thank you for your speedy response.

I am reading the back of the statement under "Flexible features" regarding overpayments and it states "following the recipt of an overpayment, your outstanding balance and the interest charged will be recalculated.Please note that any over payment bewteen all loan parts unless you specify where you would like your overpayment to be paid"

we dont have any other loan parts on our mortgage?!?!

D'oH! right in front of me

VT82

You will have been saving interest immediately (or at the end of the month) from when you made the overpayment. You are not out of pocket at all. It will have brought your balance down if you were to redeem the mortgage, but the amount you are supposed to pay each month will only be recalculated if the rate changes or if you make a really big overpayment.

The fact they haven't 'taken (it) off of (y)our mortgage' is a good thing, as it means if you ever need to take a payment holiday, you can use up your overpayment credit. It's a bit like an offset mortgage, except you cannot withdraw the overpayment, just use it to take a payment holiday. For all intents and purposes, it has come off your mortgage.

:money:

tracybaby

Thank you for explaining it and saving me from a sleepless night.

I am going to contact their HO tomorrow and request that the overpayment be taking off of the remainder of the mortgage , as I am going to be finishing my mortgage with them (just sold my house) which means that I should have a bigger deposit than we first thought! :rotfl:

WINNER! :T

thanks again

I will ask your opinion on where I should stash our cash for 6 months until we pay for our new house in January, you obviously know your stuff!

Thanks again and have a beer on me :beer:

VT82

No problem. Although you won't need to ask them to take it off, it will automatically have lowered the amount you need to pay them to redeem the mortgage when it comes to that point.

Enjoy your sleep-filled night, I'll enjoy my beer in front of the footie on Friday!

somethingcorporate

Good news all around :beer: