New arrival expected - save or overpay

dantheman2010

Good afternoon everyone

Myself and my partner were planning on starting a family, so before we decided to crack on with it we had a look at our finances.

I have just gone on a SVR mortgage (at 2% above BofE). I worked out that before pregnancy, during maternity leave and after the baby is born we would be comfortable moneywise if the BofE gets back up to 5%.

My intention was in the time it took to become pregnant when my credit card had been cleared I would start making over payments on the mortgage to reduce the LTV.

However, my partner and I are delighted that she is pregnant already, we are over the moon and hope everything goes ok. :j :j :beer: :beer: :j

My question is, she would be due to go on maternity leave toward the end of the year thus a reduction in income and IF rates increase within that time overpayments would have to cease. I estimate about £1000 could be paid off by the end of the year one way or another, meaning the LTV wouldnt change whatsoever, so I think I will probably save rather than overpay so we have funds available if needed i.e. baby things.

What would you do? Over pay even though it will be only for a shortwhile and wont change the LTV OR save so you have a bit of surplus cash for when the baby arrives?

Cheers people.

pigpen

save it for the baby stuff.. you can make up overpayments if your partner returns to work after maternity leave or in the future once your child is older and away to school.. babies are disgustingy expensive to provide for.

Congratulations!

skintchick

What pigpen said. SAVE!

And congratulations!

*Louise*

I would clear the credit card, then save after that.

It's always nice to have a little tucked away for emergencies anyway.

dantheman2010

Credit card will be totally gone on pay day of this month. Shame I have a stinking loan, but thats just tough.

Thanks guys. I thought it made sense to do it that way. I would like to get the LTV down but I would rather have the cash somewhere incase its needed. Cant get it back once its paid to the mortgage company. Can always pay more in the future.

dantheman2010

Anyone know at what stage you can find out what sort of benefits and credits you are entitled too? My partner is on a poor wage and we were wondering whether it would be better for her to not return to work and look after the child herself or go back to work and pay extortionate childcare fees. Long way off, just wondering. So much conflicting info out there on the net. Thanks

*Louise*

There's a good benefit calculator on here:

http://www.turn2us.org.uk/benefits_search.aspx

twi1ight

Just wanted to say we're in a similar situation with mortgage on SVR of 2%+base rate and baby on the way. Have decided to save save save so have a contingency for when on maternity leave. If the money turns out to be not needed then we can always pay it off the mortgage later.

I don't have any experience of tax credits or benefits but believe there is a website called Entitledto.co.UK where you can enter numbers and get an idea.

Congratulations and good luck!

dantheman2010

http://www.turn2us.org.uk/benefits_search.aspx
Thanks for this, but I cannot make any sense of it.

I was trying to fill it in as if I was one year in advance (so put all the dates down as last year) but I just dont understand it whatsoever.

I suppose we will have to wait until nearer the time of the potential return to work, so about 18 months time yet. Haha.

onlyroz

Have you budgeted for childcare?

dantheman2010

Yep we have. But unsure whether we would be better off her not working and looking after the child or going to work and paying for childcare. Plenty of time for that decision to be made.