LL starting small

dimbo61

Hi If you are the only breadwinner in the family and with Xmas just round the corner I would build up some savings first.
I know others may say clear the CC debt or other debts but having even £3K in savings may well keep the wolf from the door.
how would you manage if the car goes BANG or the washing machine needs replacement NOW.
Perhaps 50/50 savings/clear debts is the way to go

PixieFace

Hi LL :wave:.

My mortgage is with NW and to make my first OP I rang the mortgage centre and made the payment using a debit card. If you are planning to make a regular payment of the same amount each month, you can set up a standing order to do so - this was detailed in my paperwork, but the mortgage centre should be able to advise. You can also make payments using online banking, they can give you the relevant sort code and account number (this doesn't suit for me as my mortgage is split into three sub accounts, one of which has a higher interest rate and paying online won't allow me to specify which part the OP is for).

When I made my first OP last month I had it confirmed that the payment was automatically taken off the mortgage and comes off the capital, the interest is calculated daily, and you can pay as little and as often as you like. However, I was also advised that you only get the option to reduce the term or payment amount when you overpay £1000, which has to be in one go and not OPs that build up to £1000. Which reminds me, some advice on this would be great - do I overpay little amounts, or save up and overpay £1000 in one hit?

So, LL, the first thing to do is give NW a call and ask them all the questions, then decide what works best for you.

Good luck on your quest!

Pixie

quicklee99

DVardysShadow wrote: »

Apart from a false feelgood factor, this is a waste of money. Always pay off minimums on everything except the debt with the highest rate of interest, to which you should throw everything else. [only exception is paying off some smallest debts first when minimum repayments are nearly crippling].

Only start to overpay the mortgage when it is your highest APR debt. Although this keeps you from paying extra to the mortgage, in the long term it is the quickest way to pay it all down.

It's not quite as clear cut as that. I'm only using these figures to illustrate a point but say you have £1000 on your credit card you pay 15%, then you have a mortgage for £100k which you pay 5% on, although the APR is higher on the Credit card the actual amount you pay in interest is considerably higher with the mortgage. You pay £150 in interest for the credit card but £5k for the mortgage.

CLAPTON

quicklee99 wrote: »

It's not quite as clear cut as that. I'm only using these figures to illustrate a point but say you have £1000 on your credit card you pay 15%, then you have a mortgage for £100k which you pay 5% on, although the APR is higher on the Credit card the actual amount you pay in interest is considerably higher with the mortgage. You pay £150 in interest for the credit card but £5k for the mortgage.

that is incorrect

you are not comparing like for like

for any given amount of money you have available to make payments then use as much as possible on the higher APR is the cheapest overall way of paying the debts

Secret_Saving_Squirrel

I am quite confused by all of the above, but it is quite satisfying to knock off the cards first and see them disappearing. Otherwise you seem to have debt hanging over you forever.

Good luck,

Squirrel:j

lobbyludd

thanks everyone for the info and interest in my journey

hmmm.....slight backwards step in that my bank (who have just given me a mortgage) won't let me sign up to their 0% balance transfer credit card, they knocked me back so quickly on-line I don't think it can be a credit reference problem (and they HAVE just lent me 130K so i wonder if I already have the products this credit card is a "loss-leader" for?), as soon as I filled in that I wanted to transfer balances it instantly declined me.

so I'll have to wait a month to see if the searches show up on the credit agencies and then apply somewhere else.

so, in the meantime, no OPs for me on the mortgage, all spare cash goes to the cc balance

Sepa74

What a pity but I think you are spot on that the CC was a loss leader and because you already have a product with them you were rejected.

20vt-rs

Obviously each lender and person is different, but I over-pay my mortgage by varying amounts each month. I am with the Halifax and they let you pay anything as long as it's not more than 10% of your total borrowings in any 12-months.

So at the end of each month, I send whatever I have left in my bank before pay-day to my mortgage account. Sometimes it's literally £30-40 or sometimes it's in the hundreds. I find this easier than saving and then sending a lump sum, as I would rather keep the lump sum as my savings!!

Eveything counts I guess.