Snowball puzzle - please help

Karmacat

Okay, I've been inspired by Seaxwyn to follow up on my post on "what dfw thing will I do today", and post my snowball problem (which I confessed to recently on a diary and hypno told me off, so I had to pay attention, didn't I?:D . I half did a snowball ages ago, and it came out saying that I should focus on my mortgage. I don't know if thats true, because my mortgage is interest only, and I can't work out how to input that into the snowball, it doesn't seem to take that into account. My debts are as follows:

1. Capital One interest free credit card till 1 Jan 2008, repayment 3% per month, currently £2497.74 o/s, next payment due early July.

2. Mortgage just rearranged with Nationwide, two year interest only tracker expires 31 May 2009, monthly payment £206.12, interest rate is 5.78%, cant see an APR, but there was no fee so I'm guessing APR is also 5.78%. Existing overpayment earlier this year of £100 (!). Mortgage term is until October 2012. Endowment ends in January 2012, but there will be a shortfall.

3. Northern Rock loan, originally of £10862.51 (my English lawyers made a cockup of this, which is why the funny loan amount). APR 5.7% fixed, established April 2005, currently £8102.56 o/s.

Thing is, I'm really scared about overpaying anything at the moment. I would do maximum repayments to the Nationwide if I knew they wouldn't be objectionable about getting it back, because I *have* to have some work done to my house - there are garden (retaining) walls falling apart, the electrics are dodgy at the moment (I had to get the fire brigade out last year), and the porch is disgusting, to the extent that when I have to go through it and I'm on my own, I duck. Its vile. Those renovations are going to cut really deeply into my savings, maybe 50% (and I'm self employed, so I *need* savings) but some of them at least just have to be done. I could overpay to Nationwide for 4 months, and claim it back the next, that would help minimally. If my other business plan works out, I wouldn't need to reclaim those, but Ive been struggling wtih it for a long time now, and it all shows no sign of coming to fruition.

I'd love to have a debt free date, but I don't know how to work it out, given the interest-free thing. Does anybody know? And I'm also asking for help about the Nationwide's attitude to reclaiming overpayments already made - they say its fine, but is it?

Thanks all.:o

CLAPTON

snowball calculator is all about the best way to repay debts.
If you have savings or intend to increase your debt of have an interest only mortgage then it doesn't really address your sistuation very well ... e.g. an interest only mortgage does of course mean you will never to mortgage free.

in your situation I would save the money in an ISA or the best rate savings a/c you can find and see how the situation develops (e.g. your house repairs or the ending of the 0% CC deals )

Seaxwyn

HI Karmacat

The snowball calculator is great but not very sophisticated - it doesn't allow for things like switching balances before rates rise, or saving at a higher rate of interest

In your case it does seem clear you need savings for the building work, so I would investigate the highest paying savings account you can find.

If nationwide does allow you to 'reclaim' overpayments without penalty, then perhaps that is a better way of saving, I've never heard of it before.

Good luck!! Is there any quick fix you could do to your porch before you do the building? Paint it white? Knock it down? Hang up bells and crystals to attract good chi?

Karmacat

Seaxwyn wrote: »

HI Karmacat

The snowball calculator is great but not very sophisticated - it doesn't allow for things like switching balances before rates rise, or saving at a higher rate of interest

In your case it does seem clear you need savings for the building work, so I would investigate the highest paying savings account you can find.

I suppose thats true - I guess I just wanted to have a debt-free date like everyone else!

Seaxwyn wrote: »

If nationwide does allow you to 'reclaim' overpayments without penalty, then perhaps that is a better way of saving, I've never heard of it before.

And overpaying then reclaiming would feel very money-saving if I could do it, but I'm a bit in doubt now, since I've re-read, not the papers I signed, but the papers that came along after I'd signed. Must find the signed papers.

Seaxwyn wrote: »

Good luck!! Is there any quick fix you could do to your porch before you do the building? Paint it white? Knock it down? Hang up bells and crystals to attract good chi?

Now thats a really good idea! I can't knock it down, because a piece of the wall that'll be exposed isn't external-wall standard, but I might well do a healing-space ritual. Thanks!

Seaxwyn

I thought your porch sounded lovely with all the sweet little baby spiders!

elantan

i have a flexable repayment mortgage with the nationwide and pre lbm days i paid extra to my mortgage on two occasions i had to withdraw the money from the mortgage once for £5000 once for £1500 never had a problem either time it can take up to a week though so please be aware that you may need the 7 days notice ...also i'm not sure about your mortgage but with mine i can only pay up to £500 a month extra (not that i do) otherwise i will get penalised (just to make you aware of that too)

pania

hey guys. yes with nationwide you can over pay up to £500 per month, but they won't accept a lump sum.
If yo overpay you can "borrow back" the amount you've overpayed but this will increase your monthly payment back to what it would have been before the overpayment. Does this make sense?
P
xx

Karmacat

Seaxwyn wrote: »

I thought your porch sounded lovely with all the sweet little baby spiders!

Thats the one! :rotfl: I *did* get rid of them I'm afraid, since they were on the front door, but their mummies and daddies are still living in various parts of the ceiling, which is why I duck, lol - they're a new sub-species to me, and my sister just told me the new import to England, thats now breeding here, is related to the black widow spider. :eek:

Karmacat

Elantan and Pania, thanks - yep, it is the same deal that I've got, I checked with the Loan Advisor at my branch. Glad to hear you've done it, el, and yes, it does make sense pania - that increase back to what it was is only fair, really.

Thanks again.