Help me start on my mortgage

TheBrightestStar

Hi everyone. I'm nervous about this as this is my first!

Been reading everyone's posts and it has given me enough courage to ask for your lovely opinions.

Ok, so I don't really know how to do this, so I'm just gonna lay it all upfront...

I took out a repayment mortgage of 160,000 on Sep 2010 for 25 years at 3.49% variable rate. It currently stands at 155,779.53.

In our contract it says there are no restrictions or charges on OP's and interest is adjusted immediately. If a lump sum OP of at least 2,500 then we may ask for our monthly payments to be recalculated.

Now this is the hard part, I have no idea of where to start!! What's best to do? Me and my OH are trying to save 12,000 a year to go on OP's.

If anyone could give advice or send me in the right direction, i'd be very grateful!

Thank you all.

Hurdler

Hi BrightestStar
Start with maybe doing an SOA (and publish it here, if you feel brave)... best to see what your outgoings are and see if you can't trim the fat somewhere?

downsizer3

Welcome aboard!
Are you looking to make regular overpayments or one off lump sums?
If you check with your lender to see - I do regular overpayments and have just adjusted my monthly direct debit?
You can get some great spreadsheets to plug figures in and see how much you save in interest / years off - but first there is an overpayment calculator on here ( if you look at the threads at the top of MFW) to spur you on.
In terms of making savings to make those overpayments a statement of account or SOA ( there is one on makingsenseofcards) which you can post on here - people can then see what your income / outgoings are and see where you can trim back.
Good luck. I only can manage an OP of about £70 pm but I've trimmed 5 years off my mortgage term - its quite addictive when you get going!

TheBrightestStar

Hi, thanks for your help.

This is where I'm stuck.. I would do a SOA but don't feel I can do this at the moment as I don't have many outgoings. Since losing my job, and being unemployed for 8 months, I had to move back in with my parents as I couldn't afford the mortgage. I made an agreement with the mortgage company that I could rent it out for a year. Since moving out, I have luckily got a job starting in January but the flat has to be rented out til next November. This is why we going to try and save as much as possible this year before we had to move back.

I was just wandering is it better to make monthly OP's or do it in lump sums - as then they reduce your monthly payment, which doesn't pay off as much?

Hope this makes sense !

originalmiscellany

Check the paperwork - in the old days, you would get a mortgage recalculated every year, and that amount was what you paid for the next year, and if you overpaid, it made no difference until it was recalculated the following year. However most mortgages are calculated daily, and at worse monthly, so I'd be regularly overpaying (check the minimum threshold - normally £500) and ask to keep the amount you pay the same, but just shorten the length of the mortgage, rather than keep the mortgage length the same and lower the monthly costs.

Also it may be worth contacting the mortgage company explaining that you're overpaying and you're a good customer so are showing them goodwill by paying it down - that phone call can't really hurt.

Hope that helps?