Should I pay off my mortgage discussion

Marky123

Hi
I hope Im posting this in the correct place.
At the moment I have £9000 at 0% on a virgin card and £7000 at 0% on a Halifax card. I only have about £13000 left to pay on my Virginone account mortgage. What are your views on shifting that to more 0% cards and becoming mortgage free. I will end up with £29000 at 0% on various cards. I would keep shifting the debt around to keep it at 0% which sounds better to me than paying 6.5% interest to Viginone.
Any thoughts.

cold_up_north

MY fix rate mortgage is due to end in Nov, I will then have 4 years left on the mortgage, I will only owe £14000, I have £9000 in ISA's and £5000 in savings, should I pay off the mortgage, which would leave me with no savings at all, or just pay part off and get another fix rate for the rest of the term, depending on what arrangement fees cost.

Any help welcome.

girlatplay

Bargain Rzl my situation is slightly different. I own (have a mortgage over) 70% of my property and the housing association owns 30%. I do not have to pay rent on the 30%. When the time comes that I want to sell the property (provided I haven't already purchased the 30%) I have to put it on the open market, see what the highest offer is and then give the HA first refusal at that price (doesn't seem very fair to the bidders but that is the rule and any bidders would be made aware of this). If the HA say no (which is most likely) then I can go ahead and sell the property and then give them 30% of the value of the property at that time.

If I pay off my mortgage, I will be mortgage free and will have no rent to pay but will only own 70% of my property. I guess at that time I would take out a mortgage for the further 30% if there was enough time left in my life!! There is no time limit for me to purchase the other 30%. I can live in the property until I die of old age and the HA would get their share from my Estate.

I just don't know whether to use the cash to buy out a further share or decrease the existing mortgage. If I decrease the existing mortgage I will have to wait a few more years before I would be in a position again to purchase a further share, at which time the property prices will probably be rising again.

I don't know enough about stocks, shares and investments.

I live in Edinburgh.

jamesd

Marky123, what you've been doing is fine and I suggest that you continue doing it, taking more 0% deals for as long as you can. I don't think it's prudent to just end the mortgage because that's a large pot of emergency money that you can get at whenever required. Better to carry on stoozing.

Since you're near to the end of your mortgage you should also be considering things like fully using your cash and/or Stocks and Share ISA allowances each year, so that you have a nice pot of money free of future tax. You can't get back those annual allowances later so using them while paying down the mortgage is the way to go. I'd be tempted to put any overpayment money into the ISAs and just let stoozing make the mortgage free or 2-3% whenever you take new balance transfer offers.

cold up north, if you will be saving and/or investing the money that you now use to pay the mortgage you'll probably be better off by retaining the ISA money in the ISA and adding to it to get the long term tax benefits. Paying significant arrangement fees probably won't be worthwhile for such a low outstanding mortgage amount.

philiphakim

Help!
I am a little unsure of the best course of action in the current climate of credit crunching. I have a Virgin one offset mortage currently on 6.35% with a reasonable amount still to pay but a LTV rate comfortably below 50% even in todays' market . I am the only income provider as my wife is at home raising three kids under 2! We have the occasion extra income via tax credits and child benefit and excess rent from a rental property I have. It's not a huge amount but something at least. I do make use of my ISA allocation albeit this year only a cash one. My question is, should i be putting all extra cash under my wife's name (as a non tax payer) in as many high interest savings accounts e.g Halifax's 10% one or ISA'a whichever is the highest paying as needed or should it go into V1. I have to admit I have always been keen to pay off the mortage as referred to by others as the "feel good factor" but i am concerned that the 50K or so that has already gone in might be difficult to get back again should I want it on the basis that the bank probably doesn't see them now as my savings (which I do) and might resist it particularly in this loan reluctant time. Could someone tell me if they could actually hold it back from me and ultimately what is the best thing to do?

Thank you
Philip

jamesd

Halifax does an offshore regular saver that pays 10% on up to 2000 a month (not covered by the compensation scheme) so you certainly could use that and other regular savers.

You could also consider funds like BlackRock UK Absolute Alpha and Cru Investment Portfolio since you seem to be in this for the long term. Those two are particularly low risk but there is no guarantee that they won't fall in value, especially for short periods. They pay in capital gains (or losses) not interest, so you can use your capital gains tax allowance with them. You can also hold them within a stocks and shares ISA and that would be sensible if you're doing this for the long term.

You can undoubtedly expect that the 50,000 is available to you if you want to use it. There's no reason to believe that they will break their agreement with you.

How have you funded the rental property? You can deduct mortgage interest for up to 100% of the value of the property at the time it entered rental use, including from mortgages secured on your own home. It's not at all uncommon to have the interest on a loan on your home used to reduce the rental profit of the letting business.

PETER_HARKINS

Currently in process of trying to pay off my mortgage this month July. Current fixed agreement ends 31.07 so cannot pay funds in to clear before that date or will incur early redemption charge! If I wait until 01.08 Society will charge me 1 month at new 'higher interest ' rate whether I pay on that day or anytime within that month. Is this legal or !!!!!! Turpin tactics ?

daza_3

Hi, I have a 100% mortgage of £170,000 which I am making overpayments on. Should I make they overpayments on the secured part of the loan or the unsecured element (roughly £8000), or split it between the two. Currently paying £500 per month over (wish I had this extra money a year ago, would have had a deposit then!). Will it even make a diffrence?
Thanks, would aprechiate some advice.:eek:

jamesd

daza, unless they are at different rates you'll get more benefit from overpaying on the secured part. That's because secured debts are more of a threat to your home if you have major financial trouble due to job loss, sickness and such.

When remortgaging it'll make no difference since you'll need to deal with the whole amount in some way.

dawntrace

Hi - My fixed rate mortgage deal is due to finish at the end of august. The new variable repayment rate is 6.49 and the amount outstanding will be 90,000.00. I am able to pay the mortgage off, but not sure whether I should keep the savings and continue to pay the mortgage using the interest to pay part of the mortgage payments. I have currently some money with a 6.5 interest rate paid monthly and not sure what to do. Any suggestions?:j