Back from the brink of disaster....now to pay off £160,400 interest only mortgage :-(

Hopelessly_Hopeful

Hi Kate


I am hoping to be on the board next year so decided to start learning and be in the reception class! I have subscribed.

You have done fabulously well and I am sure you will get there with your MFW goal.

Re NRAM, there are numerous posts around to them not making the overpayments available back to mortgagees. I have been speaking to them recently about porting mortgage to another property and other options. I specifically asked them about overpayments and was told not to rely on this as they sometimes don't give back. Just thought you should be aware of the need to check it out and get it in writing if you are relying on this. Think you have a half way plan so that sounds like a good balance.

£500 will really start to build up. In a few years time your options will open up in terms of being able to apply to other lenders.

I have APs on my credit file that are a damn nuisance as they sneakily last longer than the defaults so will be another 7 years before my file is clean.

Good Luck with your journey.

HHx

Hopelessly_Hopeful

Me again!

Have you used the mortgage calculator on here?

I have just had a fiddle with it on the mortgage element of your loan. Assuming you overpaid (to the mortgage element) £500 per month for the next 14 years at the end of the term you would owe £33 344. Not bad considering most people extend their mortgage. Alternatively if you look at where £500 extra will put you in 6 years when you will have many other options, there would be £109 417 left a LTV on 170k of 64.39% which should give you decent rate options for shifting providors.

Am sure there will be tons of other options too.

Hope that helps give some food for thought.


HHx

lessonlearned

Great thread and I have taken to dipping in and cheering you on.

Agree with the memories rather than "stuff" for children. That's what we did. You can pick up cheap toys and books from charity shops and car boot sales anyway.

I can recommend the NT membership - well worth it. Another good one is if you live within reasonable distance of a zoo is to get a yearly season ticket. You can then visit as often as you like and the children can get to visit their favourites whenever they like.

We live near Twycross and it's one of the those that is really spread out so if you only go for the day you get really tired trying to cram it all in in one go. If you have a pass you don't need to do that.

Sun Holidays (the vouchers from the Sun Newspaper) are another cheap way of having a few days away without breaking the bank. My grown up sons remember those with great fondness.

Good luck with your attempts to earn extra income. I'm sure you'll find lots of ways and it all adds up.

Cheapskate_Kate

SalsaDanca wrote: »

Hi Kate,

I see that quite a few other people have already complimented you on your attitude and your very readable posting style, so instead I'll compliment you on joining MSE in 2013 and finding a decent username. There can't be many left!

As you've just started tackling the interest-only mortgage, have you considered working out how much interest you pay every day? Some people find this a good way of breaking down a large mortgage into manageable targets.



If your mortgage is about £160,000 and the interest rate is 4.54%, you are paying just under £20 per day in interest, which might come as a shock. However, an overpayment of £80.40 will save you 1p interest per day every day for the next 16 years. £80.40 is a small enough amount that you could aim to make several £80.40 overpayments per month, which would soon have a small but noticeable effect on your monthly interest payment.

£20 a day in interest :eek:......wow I had no real idea - but that is helpful in terms of boosting my motivation

Cheapskate_Kate

So the weekend was rather more expensive than I had hoped. Did a bit of shopping and then had car issue on the way home. Thank goodness for the AA is all I can say. Had been wondering for a few years whether it was worth it but it most definitely is and I will certainly be renewing.

Garage quoted me a stupid amount for the spare part and fitting so I went online and ordered the part myself for about a third of the price and then my neighbour (who is a mechanic) fitted it for £20 and a bacon roll. :money:

So all in I now have £65 left from the budget to get me until next Tues. I have shopped until Friday evening and have half a tank of fuel so I should be able to do this. I'm feeling very impatient and wish payday would hurry up so i can start the master plan.

Cheapskate_Kate

Today I decided to see what my credit report looks like. I've not bothered since I went onto the DMP but thought I should now have a glance and see what the damage is so i can plan and take positive action!

Ordered it through Experian with a fiver cashback - now must just ensure I cancel before the 30 days is up.

So, I'd like to say there's good and bad but really it's more a case of bad and dreadful.

The only saving grace is that the mortgage arrears of a couple of mths in 2009 don't seem to be marked as such. Probably because I phoned up and agreed a reduction for a few mths. Mobile phone bill also has lots of nice greens. And there it ends.

So I have 1 default still in the red - as in not settled but this is the one I'm paying off in a week. The others are all marked as settled - which is correct. Most defaults are from 2009 with one in early 2010.

However, i also seem to have 2 defaults for the same agreement. One from HSBC and then a month later one from Moorcroft who HSBC sold the debt on to. A quick google shows that this shouldn't happen but I'm not sure how to go about correcting it or whether its even worth it? Any thoughts?

Another odd one is my credit card. Looks like they didn't default me but actually have recorded me as AP which I understand means Arrangement to Pay. This is recorded from 2009 right up until the end of 2012 when I cleared it. Apparently the account is still open and I have available funds of 5k......am totally confused by this but another quick google suggests this will be a sticking point as the AP will hang around until 2018 possibly destroying my chances of a remortgage......very depressed by that. Hopefully someone has some positive suggestions about how to sort it out. Do you think closing the account is a good idea?

Hopelessly_Hopeful

Hi Kate

I'm doing battle with the dreaded APs too. I read that sometimes you can get them to change it to a default so it off your record quicker. Some creditors see APs more favourably than defaults; the challenge is which?!

Try google the ICO guidelines on defaults and APs.

Overall like the DMP I think you have to break into chunks. probably worth saving/overpaying mortgage for three years, by then there will be no defaults on the file.

Good luck

HHx

Beckyy

Your neighbour sounds very handy!

I can't be of any help at with the credit report, but I hope you get everything that needs it seen to

Cheapskate_Kate

Hopelessly_Hopeful wrote: »

Hi Kate

I'm doing battle with the dreaded APs too. I read that sometimes you can get them to change it to a default so it off your record quicker. Some creditors see APs more favourably than defaults; the challenge is which?!

Try google the ICO guidelines on defaults and APs.

Overall like the DMP I think you have to break into chunks. probably worth saving/overpaying mortgage for three years, by then there will be no defaults on the file.

Good luck

HHx

Thanks for this - I've had a quick scan and it seems an AP should only be used for a limited time....not for nearly 4 years - I might write a letter and see what happens. Would have been better to have defaulted me - and I can't believe the accounts still open - seems odd??

Hopelessly_Hopeful

I agree

If you get no joy with them it may be worth a complaint to the ICO

HHx