Save, Overpay , Debt repayment ?

andy1886 · 14 January 2012 at 9:03AM

My fixed rate period finishes later this year . I am on a dmp and have spoken to my provider and they tell me that as I havenot missed any mortgage payments and the outstanding balance on the mortgage is 60% I will qualify for their best rates , the fact I am on a dmp as an existing customer does not matter .
So , when I get this offer , should I save the difference between my current payments and new payments , overpay to reduce my mortgage balance or pay extra on my dmp . I am quite happy with my dmp ticking along until it finishes in 4 years and at this time we would like to move so again I am not bothered about finishing dmp any earlier due to defaults still being on my credit file . So should I save and have a capital sum to add to the profit to use as a deposit or reduce mortgage balance or finish the dmp and use the monthly amount not being paid to either save or overpay ?

Thrugelmir · 14 January 2012 at 12:39PM

The clock will start running once you've settled your debts. So the sooner the better. You'll struggle to find a mortgage until a suitable length of time has elapsed after you have completed the DMP.

Catslovelycats · 14 January 2012 at 2:21PM

There'll be more knowledgeable peeps than me able to help you but my gut feeling is to pay off dmp debts as soon as you can. If wanting to save too, then you could put a tiny bit aside to save, though the interest you're paying won't match what you get in savings.