Direct debit or standing order??

Applecider_2

hiya!! Im a bit new here so my threads maybe a little simple or already been said so sorry in advance. I cancelled my direct debit to my morgage and phoned them up to reinstate it, they said they would send me a DD form to fill in. However i needed to send the money within four days and would never make it in time. I asked the woman and she said she would give me my account number and sort code, I was like EH??? Im only 20 and not very well knowledged in things like this, the woman was extremly helpful and explained to me that my morgage is like a giant overdraft which can be payed into at any time. My morgage was £377 on DD so I rounded it off to £400 a month paying that little it extra off it a month, the woman said I would shave off interest and time. I hope this helps other simpletons like myself to pay off a little earlier!! NB ask ur morgage ppl how much u can pay off in one year without being charged as ur only allowed to pay so much!! :eek:


If anyone has any advice for me PLEASE PLEASE help, as my life is pretty ruled by my morgage!! I got 56,000 and am paying basic basic 377!

Thankies :rotfl:

Mikeyorks

Your heading (DD or SO?) .. isn't really mirrored in your post? Not sure if that's why you cancelled the DD - but it's not a wise move.

A DD is much better as Mortgages are often variable rate .. and a DD allows your lender to vary the amount they raid your account for (provided they write you to advise the change some 10 days in advance). A SO is for a fixed sum - and you have to change it, so more risk of it going wrong.

When you re-instated the DD - it takes at least 14 days for your lender to process that and file the form (mandate) with your Bank .. as this acts as their authority to charge to your account.

Applecider_2

Im sorry Im new to things like this dont really know what im doing. Im on a fixed rate does that make a difference? All I want to do is pay it a little earlier!! How the eck can I do it.

Fritha_2

Right I'll give this a shot:

The amount you have to pay to your bank every month is £377, if you don't give them that they'll shout at you and make you give them your house and things! The £377 you pay includes the interest you owe them for lending you money, and also nibbles a little away at the amount they've lent you. They've worked out that if you pay £377 a month then you'll have paid off all the capital (amount you've borrowed) and interest in 25 years (based on the interest rate you're on now).

If you want to pay it earlier you can overpay (pay more than they make you each month). You've also started to do that by asking your bank to set your direct debit at £400 rather than £377. You can overpay your motgage in other ways. As the lady at the bank explained it's basically like a bank account with a really big overdraft on it so it has it's own acount number and sort code like a bank account. You can use these to pay money into your acount like you would a normal/current account:

Internet banking (transfer the money to the mortgage acc and sort code)
Cash/cheque (bowl up to your bank and hand over the cash/cheque and the acc no/sort code and they'll pay it in. Make the cheque payable to you.)
Telephone banking (ring your bank and ask nicely)

By your bank I mean the people that have given you your mortgage btw.

You can work out how much you can save by using one of the overpayment calculators from this thread: http://forums.moneysavingexpert.com/showthread.html?t=155707

Having a fixed rate mortage does not mean you should have a standing order, not will it make any difference to over payments. A standing order is basically set up and controlled by you, a DD is set up and controlled by the company receiving the money. As a general rule of thumb you use a SO to pay an individual, and a DD to pay a company.

Crikey, I wasn't entirely sure what you needed to know so I though I'd go back to basics (so sorry if anything is a bit paronising!), if I haven't covered anything or you want to know something else feel free to ask me and I'll help if I can!

Applecider_2

Thank yo very mch information like that is very useful to me who is not really in the know. I have started a pig jar which I throw money into evryday spare change to hopefully pay into one day!! I think I just need to earn more money!! I need to start a new buisness!! any ideas haha

Fritha_2

Dezzi,

I noticed that you've posted on the DFW boards as well as here, you might be better chucking all your spare cash at your debts with the highest interest rates first.

Mortgages usually have a fairly low interest rate so it can wait until you've pad the higher ones off, as long as you continue to make you monthly payments you'll be fine.

Focus on one thing at a time and it'll seem a lot more manageable. The chap and chapesses on the DFW board are fantastic they'll be able to find ways of getting your debts down you'll never have even thought of!

As for business ideas! No chance! But it's worthwhile looking round your house to see what you've got that you can sell off on ebay then chuck that money at your debts, sign up for Pigsback and other cashback sites (I like Topcashback best but other people prefer Quidco). There's refferals on the refferals board (or PM me and I'll help you out) all of these will give you extra cash!

Anyway, back to the DFW baord you, I'll come over to your thread there and see if I can help out a bit there too!