Mortgage Free in Three Yrs

Bargain_Rzl

Hi Karmacat,

Basically they mean that if your monthly payment date is the 15th of the month, then the overpayment has to be made between the 16th and last of the month in order to trigger a reduction to your monthly payment.

I think the way it works is that the first payment you make to them in any given calendar month is taken to be contributing to your regular payment. So unless overpayment comes after your regular payment in any month, it won't see it as a £500 OP. In my case, my regular payment is about £295 and it comes out on the 27th of the month, so if I have made a £500 OP earlier in the month, their system sees it that the first £295 of that £500 is the regular payment, and that my overpayments that month consist of the remaining £205 plus the £295 that comes out later in the month. Because of this, it never sees a "£500 overpayment" per se - it sees £295+£205+£295 - and therefore doesn't reduce my monthly payment. On the other hand, if I was to make that overpayment on the 28th of the month, it would see the £295+£500, and the overpayment would trigger the reduction to the monthly payment.

So basically it's saying that in order to trigger that reduction, your monthly payment has to be accounted for as such before any overpayments are registered that month.

I hope that makes sense - I'm sorting exactly the same thing out for myself at the moment!

angelavdavis

Karmacat wrote: »

Now, my decision is about when to make the overpayment - I regard the time between overpayments as exactly that, *between*. Nationwide have written to me confirming that when I make future overpayments, they'll always be used to reduce the monthly payment, as I wanted them to, but they've also said:

"please note this will only be activated if your overpayment is made after your monthly mortgage payment has been received".

At first I thought they meant something really stupid like, we have to receive it by the last day of the calendar month, but do they just mean the monthly payment amount can't be reduced for the monthly payment immediately following the overpayment? Which is annoying but understandable.

Anybody got any clue? I'm tempted to do it this afternoon, I happen to be going into town and I could pay out of my current account and transfer money in to cover it before its cashed.

Hi Karmacat, great to hear you are doing so well!!! It's good to make "free" money isn't it!!!?!

I think your assumption is correct - what they are saying is you need to have made that months actual monthly payment in order to then get the reduction on the next months payment.

Trying_to_be_good

I'm still plugging away at the mortgage, and when I started this challenge I took out 0% cards for purchases and balance transfers. Now, with the credit crunch, I'm trying to really simplify my finances - paying off the cards with the stoozed money (which fortunately wasn't in icesave), even though there're a few months left at 0%.

Is anyone else tempted to 'keep things simple' now, even if it means not making a few pounds in the process?

firesidemaid

i am keeping my stoozing on hold/as it is till our new mortgage goes through - although we are applying now it's not due till the end of feb.

as it's an offset mortgage i want to be able to stooze like crazy, but will have to wait as don't want to risk getting the great mortgage deal (and some folks have said that even when you have been offered the mortgage they sometimes check credit files again before they finally release funds).

but, i now will only stooze if it truly is a 0% deal (ie. no BT fee either) or with BT fee but for 12+ months to make it worthwhile.

MoneySavingNovice

Trying_to_be_good wrote: »

.... Now, with the credit crunch, I'm trying to really simplify my finances - paying off the cards with the stoozed money (which fortunately wasn't in icesave), even though there're a few months left at 0%.

Is anyone else tempted to 'keep things simple' now, even if it means not making a few pounds in the process?

Your better off than me, my stoozed money was is IceSave, I will be very pleased to get it back later on this month.

When I first found out that IceSave had gone under, I was very tempted to pay off my Credit Card debt and not continue to snooze.

I have since somewhat changed my mine, but I am not going to do any more balance transfers. When my current 0% deals come to an end I will pay them off in full. What I am going to continue to do is the simple snooze, in that I have just applied for a 0% Barclay Card Breath Card, for new purchases. When the 0% rate comes to an end I will pay that off in full..... and so on.

I have a personal view that these 0% cards might not be around for much longer, it seems a pity to miss this opportunity while we still have it. That said I do agree a less risky strategy than true snoozing will make me sleep better at night.

When I do get my IceSave money back I am going to split it between several accounts - so in a way the less complicated credit card is offset by the more complicated savings.

Trying_to_be_good

MoneySavingNovice wrote: »

When I do get my IceSave money back I am going to split it between several accounts - so in a way the less complicated credit card is offset by the more complicated savings.

I think it's these complications that are putting me off now - when you could get 6-7% on a savings account with no hassle, I could put up with the tracking the money and moving it about bit (and the mortgage was bigger then, too). Now, with instant access rates dropping, I think I'll retire from stoozing for now, and see if 0% cards are still around as and when rates are on the up again.

Kaz2904

Well I've invested in a pair of shoes. Specificaly, a pair of Kurt Geiger shoes.
I managed to get them for £27 (Lucky timing of an ebay auction). Now at this price I can wear them for a while and then if I get bored I can flog them on again. I may even make a profit.
I have decided to do this now with all of my clothes purchases now. I reckon that if I look around on ebay and time it right then I can replace my wardrobe with designer clothing for Tesco prices. These will all keep their value for resale so I can just sell them on again if I get bored with them.
I got the idea from SiL who is always buying and selling on ebay and manages to stay fairly neutral cost wise. She buys something and then sticks it back on again within a couple of months. Her wardrobe is very current because of this. TBH I will not be going for all of the high fashion items as I prefer classic styles (like jumpers with proper sleeves!).

Anyway that is another strategy of mine to keep the mortgage free money available and flowing my way!
Hope all's well, TTFN, Kaz.

Dithering_Dad

A quick update from me. I paid another £2k off the Interest Only part of my mortgage yesterday and this is now down to £2013.25. I am currently half way through a 3 yr deal with my mortgage provider and so phoned them to see if the redemption policy covered the mortgage as a whole or the 3 individual mortgage accounts I have with them.

Unfortunately it covers the individual mortgage accounts and so if I completely paid off my Interest Only account, I'd end up with a £1k fee . However, the nice lady who I spoke to told me that I could just leave £1 in the account and they would freeze it until the end of my mortgage redemption period.

I'm now looking to scrape together any bits of cash I can find in order to reduce this account to £1 and cross it off my signature, though I doubt I'll manage this before Christmas now.

Still, it'll be great to have finally paid this off - it was originally supposed to be covered by an endowment (and we all know how they turned out :rolleyes:) - and it'll be repaid 12.5 years early. Yay!

Bargain_Rzl

My strategy has changed a little. I haven't made a November overpayment and I'm not planning to; even when my fixed rate deal ends at the end of the month I think I am going to leave it a bit longer. The SVR I'd be going onto is 6.19% at today's rates, which is lower than the rise I'd budgeted for, and should be dropping further from 01 December if the BOE drops the rate today as expected. My savings which are designated to go towards the mortgage are fixed at 8% (6.4% net) until February, and so it makes sense to leave my money where it is at the moment and review the situation over the next couple of months.

I am probably on the brink of negative equity at the moment but once I do eventually make the transfer from savings, it should put me back in the <90% LTV bracket again. Currently there's no real advantage in trying to reduce my LTV because the deals available at <90% are no more worth having than the SVR.

I am however going to contact my lender and save a small amount of interest by bringing my payment date forward. I used to get paid on the 26th so the mortgage gets paid on the 27th. Now I get paid on the 21st so it makes more sense for it to go out on the 22nd.

Kaz2904

Sounds like a mini challenge to self DD? £2012.35 to go. Will he won't he..............
So which one are you going to hammer next? I'm guessing it'll be the home extension one?
You're doing well though, you've paid off nearly 1/3 in just over 18 months. Maybe it'll take you longer than 3 years but it sure as heck isn't going to take you your original date!