Which option would you take? Repayment or IO?

RenovationMan

Wutang wrote: »

Because 1.) I thought no one would be interested in reading your story and 2.) its funny that you are such a devout overpayer and havent overpaid any of your own dosh yet.

1) Well, clearly you were . Plus you must think people are interested enough to care where my latest overpayments came from, though perhaps you knew it wasn't terribly stimulating and so you were drumming up interest via the journalistic style of your post?

2) It depends which overpayments you're referring to. As I have already mentioned in this thread, I have owned three houses and I've made substantial overpayments on all of them. Only the overpayments on my current home are from money supplied by my parents when they sold their own house and moved into ours (we're renovating a former stable that was converted into a 'granny annexe' for them).

I could hardly describe myself as a devout overpayer (in fact I used the word 'dedicated') if I only included overpayments on my current house - I've only made two overpayments and have only lived there two months. Hardly dedicated!

As you've intimated, this is all documented in my Mortgage Free Wannabe Blog, please feel free to subscribe, the more the merrier!

CapJ

RenovationMan wrote: »

I had a look at your link and the information was about ability to repay the mortgage and was in the 'Business standards' section, not 'Regulatory Processes', so perhaps these are guidelines rather than regulations?

At any rate, I'm afraid I can only say the same thing so many times, so here is my last word on the subject. They didn't ask for a repayment vehicle, perhaps they should have according to the guidelines, but they didn't. If they had I would have tried to get overpayments accepted as a repayment vehicle, if that failed I would have set up an ISA or something and then used it for emergency savings while I reverted back to direct overpayments.

That section included both Regulations and guidelines on how to meet them.

Overpaying your mortgage is not a repayment vehicle (though it is a method of repayment - but not one I could imagine a lender accepting).

That section makes it clear that lenders have to understand that you can repay your mortgage. Therefore either you or your broker told your lender a method you would be using to repay your mortgage or your lender broke the law big time. Given your broker had the details for a repayment vehicle ready (according to you) I know what I think happened.

Radionotme

Overpaying your mortgage is not a repayment vehicle

You're right, but one has to wonder why. A repayment mortgage is considered an adequate payment vehicle, and that's effectively just a regular comittment to overpay.
An ISA is considered an acceptable overpayment vehicle, and yet the current returns on ISAs are usually less than the mortgage interest, so you're better off putting money into overpaying the mortgage than into an ISA. Plus, the bank can't keep track of what you're putting into an ISA whereas they can monitor a mortgage.

RenovationMan

CapJ wrote: »

I know what I think happened.

There are known knowns. These are things we know that we know. There are known unknowns. That is to say, there are things that we now know we don’t know. But there are also unknown unknowns. These are things we do not know we don’t know.

Wutang_2

RenovationMan wrote: »

There are known knowns. These are things we know that we know. There are known unknowns. That is to say, there are things that we now know we don’t know. But there are also unknown unknowns. These are things we do not know we don’t know.

You don't talk like this in real life do you?

RenovationMan

Wutang wrote: »

You don't talk like this in real life do you?

Nope, that's a famous statement from a former US defence secretary.

lee636

Wutang wrote: »

You don't talk like this in real life do you?

:rotfl: Your comment made me chuckle, thanks!