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Mortgage Overpayments
Baggins_2
Posts: 1 Newbie
Hi, I'm new to this so please bear with me.
The situation:
Mortgage=£100000 (£55000 on repayment, £45000 interest only)
We normally search for the best fixed rate every two years. Our interest only portion (at the moment) is covered by three endowments, hopefully with a little to spare. However, in the past, because we've needed the money..... young family and all....we've remortgaged but advised our IFA that our mortgage is the same as it was two years previous, receiving a cheque back for the extra that we had overpaid. That was until the last time we remortgaged (February 2005) when we paid off £10000 off the interest only portion as advised by our IFA.
Our deal finishes in February 2007. We can probably afford to pay off another £5000 lump sum. Do we pay it off the interest only portion or the repayment portion? Would it be better to get a more flexible mortgage and make overpayments monthly or continue on a fixed rate put the money away for the two year deal into a high interest account and pay off another lump sum when we remortgage again? Also, when we are asked by our IFA what term we would like, do we say 25 years pleas as this keeps our payments low during the deal and we can save more or could this cause problems when we start to pay off the mortgage in huge lumps as we will (hopefully) in 2012 when the first of the three endowments pays out?
Hope that's clear enough. Would appreciate any help/comments.
The situation:
Mortgage=£100000 (£55000 on repayment, £45000 interest only)
We normally search for the best fixed rate every two years. Our interest only portion (at the moment) is covered by three endowments, hopefully with a little to spare. However, in the past, because we've needed the money..... young family and all....we've remortgaged but advised our IFA that our mortgage is the same as it was two years previous, receiving a cheque back for the extra that we had overpaid. That was until the last time we remortgaged (February 2005) when we paid off £10000 off the interest only portion as advised by our IFA.
Our deal finishes in February 2007. We can probably afford to pay off another £5000 lump sum. Do we pay it off the interest only portion or the repayment portion? Would it be better to get a more flexible mortgage and make overpayments monthly or continue on a fixed rate put the money away for the two year deal into a high interest account and pay off another lump sum when we remortgage again? Also, when we are asked by our IFA what term we would like, do we say 25 years pleas as this keeps our payments low during the deal and we can save more or could this cause problems when we start to pay off the mortgage in huge lumps as we will (hopefully) in 2012 when the first of the three endowments pays out?
Hope that's clear enough. Would appreciate any help/comments.
0
Comments
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Lots of questions - see below an excellent website I found which you can plug in most of the scenaries you talk about
http://www.loanbright.com/edirectlending/calc_amortization.html0
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