Wise to pay extra mortgage payments while on benefits

andyandflo

woodbine wrote: »

How do you come to that conclusion?Many people are stuck with mortgage rates above the 6.08% currently used for SMI,this will reduce to the bank of englands average mortgage rate from october currently around 3.9%,so someone currently with a £100k mortgage getting smi will have to find another £40 per WEEK.
And your assumption that it comes off the capital debt is incorrect also,especially for the VAST majority with repayment mortgages.!

Hi, I don't want an argument but many people have motgages at or around 4%. Most people I know have.
So if SMI has been paid at 6.08%, there have been overpayments made at up to another 50% of the interest charged (6.08% - 4% = 2.08% --- 50% extra of the interest)
This overpayment has been going somewhere, and from what I understand from friends who are in receipt of MSI, it is being used by the bank/building society to reduce the capital debt. There is nowhere else that it can be utilised.

Yes I do realise that the SMI is coming down to what the government say is a more realistic rate - currently 3.9%. This will ensure probably that no one will be able to have any advantage from then on. As regards saying that there are many on rates above 6.08%, is that mainly because of either bad credit rating of the customer or lack of equity due to a very high LTV ratio? Surely it's not fair that the government should keep the rate at the current level to help those individuals out? They caused their credit rating problem, they maximised their mortgage of up to 100%, they weren't pushed into making those decisions by the government - they made their own choices to take out a mortgage.

Let us just hope that lessons have been learned about buying without a deposit - today is a more realistic situation - minimum 40% deposit. looking at affordability not just multiples of income and of course the mortgages where no references were ever taken up - 'trust me, would I lie to you my friend' comes to mind when asking to borrow money.

moneysaymoneydo

Hi Wazza the condems have in their budget from last month said that from Oct the SMI provided will be reduced (unsure of exact amount) but basically your payment will be halved (approx) but yes every anniversary of when you started receiving SMI they write to your mortgage people and get exact amount ie any deductions from you overpaying or your payments my advice would be save up overpayments in savings account wait until after they do their annual check up of outstanding mortgage then pay lump sum to mortgage would give you another year to play with if you see what i mean!

Andy and flo i know so unfair i laugh i receive housing benefit at £1000 a month so now i know the condems have capped at £1400 i am currently looking for a move to a 3 bed with a garden since i am undercutting myself by £400 :rotfl: im selling myself short in my 2 bed flat

andyandflo

moneysaymoneydo wrote: »

Hi Wazza the condems have in their budget from last month said that from Oct the SMI provided will be reduced (unsure of exact amount) but basically your payment will be halved (approx) but yes every anniversary of when you started receiving SMI they write to your mortgage people and get exact amount ie any deductions from you overpaying or your payments my advice would be save up overpayments in savings account wait until after they do their annual check up of outstanding mortgage then pay lump sum to mortgage would give you another year to play with if you see what i mean!

Andy and flo i know so unfair i laugh i receive housing benefit at £1000 a month so now i know the condems have capped at £1400 i am currently looking for a move to a 3 bed with a garden since i am undercutting myself by £400 :rotfl: im selling myself short in my 2 bed flat

Hi, I just love that comment!

Go for it, if that is what the limit is and you qualify for 3 bed property, you should take what is offered.
An absolute idiot would want to live in a 2 bed flat instead of a nice 3 bed one with a garden. What for? so they could help the government out. No I don't think so, charity begins at home!

I fell about laughing myself tonight after reading about the refugees from Somalia complaining that their property was in a poor area, so they moved to Notting Hill. Their rent went up from £850pm to £2000pm. All paid for by HB. I honestly don't blame them.

dmg24

andyandflo wrote: »

And so it should be! Too many people have been having the interest covered + up to 50% more off the capital debt.

You are showing your bitterness again andyandflo!

woodbine is correct - the average mortgage interest rate for a long term benefit claimant is going to be significantly higher than the average rate for all.

Indie_Kid

andyandflo wrote: »

Hi, I just love that comment!

Go for it, if that is what the limit is and you qualify for 3 bed property, you should take what is offered.
An absolute idiot would want to live in a 2 bed flat instead of a nice 3 bed one with a garden. What for? so they could help the government out. No I don't think so, charity begins at home!

Don't worry about tax payers; they'll just pick up the tab for you.

moneysaymoneydo

I live in a 2 bed flat at the moment but as andyandflo says why? there are reasons but i have a boy of 11 and a girl of 4 and was told i should be entitled to a 3 room because of them being opposite sexes also i plan to have another soon so that would make even more complicated so i am an idiot and entitled to a 3 bed but now i see i could have £1400 instead of £1000 i could find something better for me and my family the housing people say find a house/flat then fill in the forms and move in simple?? here was my thinking it would be a headache im well excited will let you all know how it goes my daughter will love a garden and seen a house that fits the bill with a nice little garden too fingers crossed i hated conservaties and loved gordon brown but david seems to be stepping up to the mark as well as this i get an extra £150 a month on me tax credit so well done condems!!!!!!!!!!!!!! :j

moneysaymoneydo

oh sorry i mean £150 a year but approx im better off £18 a month as tesco says every little helps i dont need to stress about looking for work!!!

moneysaymoneydo

And the Somalians maybe felt intimidated and required a move who cares where they live they are entitled like the rest of us to feel safe we are all equals regardless of where we were born i hope they feel secure in Kensington!

jules888

moneysaymoneydo wrote: »

And the Somalians maybe felt intimidated and required a move who cares where they live they are entitled like the rest of us to feel safe we are all equals regardless of where we were born i hope they feel secure in Kensington!

I totally disagree.Why do they have to live in London at all where the rents are so high?We"d all like to live in a nice posh area but arent all so lucky!Im so glad that housing benefits ae being capped.About time!

wazza

moneysaymoneydo wrote: »

Hi Wazza the condems have in their budget from last month said that from Oct the SMI provided will be reduced (unsure of exact amount) but basically your payment will be halved (approx) but yes every anniversary of when you started receiving SMI they write to your mortgage people and get exact amount ie any deductions from you overpaying or your payments my advice would be save up overpayments in savings account wait until after they do their annual check up of outstanding mortgage then pay lump sum to mortgage would give you another year to play with if you see what i mean!

So it will be best for me to wait till Feb next year before starting to pay extra into the mortgage account? Hopefully should know where we stand.