I've Done It!! I'm Finally Mortgage-free

barnishroader

Martinslovechild wrote: »

I would leave your two existing balances where they are - they're already at 0% so there's no point in consolidating these elsewhere.

At this point in time, you could either continue as you're already doing or apply for the Egg Money card and another 0% card elsewhere (let's call it BigBucks Visa). Max out BigBucks Visa, transfer to Egg Money then on to your mortgage. When you swap your mortgage deal in November, you could consider a fully flexible mortgage (i.e. allows overpayments and drawdowns - this is important for having the option of withdrawing cash from your overpayment fund to repay credit cards at the end of any 0% deals) - this will put you in the position whereby you can start converting chunks of your mortgage to 0%.

Regarding the Egg Card - ensure you apply for the Egg Money card, not the Egg Card (very similar names but totally different cards).


As for your question, I always apply in my own name only; this is so that your wife can apply for an Egg Money card separately in her own name, meaning that both of you can contribute to the mortgage overpayment fund. The beauty of this is that you're likely to get bigger credit limits across two different accounts than two names on just the one account. At some point or other, my wife has had cards from the same lenders as me - although not necessarily at the same time as me.

Best of Luck.

by max out do you mean transfer the whole limit from the 0% card to egg money?
and what does drawdown mean?

drillstep66

Congratulations MLC what an inspirational story!I have researched a few 0% credit cards and found out that the offer is only available on purchases and balance transfers, but not on cash withdrawls. Surely you have to withdraw cash to make mortgage payments? Thanks!

~daisy~_2

drillstep66 wrote: »

Congratulations MLC what an inspirational story!I have researched a few 0% credit cards and found out that the offer is only available on purchases and balance transfers, but not on cash withdrawls. Surely you have to withdraw cash to make mortgage payments? Thanks!

i believe that this is where the egg money card comes into play but am sure someone more able to answer correctly will be along soon

all the info is in the thread tho

Martinslovechild

barryheffron wrote: »

By max out do you mean transfer the whole limit from the 0% card to egg money?

In a word, Yes. Or at least as much as the credit card company will allow (i.e. some cards allow balance transfers of up to 95% of your credit limit or thereabouts.

barryheffron wrote: »

What does drawdown mean?

A fully flexible mortgage is one which allows overpayments, underpayments & has a drawdown facility.

It's no good making an overpayment if you can't then withdraw that cash at a later date to repay the credit card should you need to; therefore your mortgage account must have what's called a drawdown facility, i.e. you can ask for some or all of your overpayment fund back at any time.

Martinslovechild

drillstep66 wrote: »

Congratulations MLC what an inspirational story!I have researched a few 0% credit cards and found out that the offer is only available on purchases and balance transfers, but not on cash withdrawls. Surely you have to withdraw cash to make mortgage payments? Thanks!

OK, the key is making sure you have an Egg Money card - this is used as an in-between (sometimes called 'mule' or Super Balance Transfer card).

Before we begin, let's make these assumptions...

• Current Account Balance = £0
• Egg Money Balance = £0 [credit limit = £5,000]

Let's say I now apply for the BigBucks Visa. They offer me the card with a £7,000 credit limit and 0% for 12 months on Balance Transfers.

So, I now have:-

• Current Account Balance = £0
• Egg Money Balance = £0 [credit limit = £5,000, APR 7.9%]
• BigBucks Visa Balance = £0 [credit limit = £7,000, APR 0% on BTs]

I call BigBucks Bank and request a Balance Transfer from my Egg Money card for £7,000 [note that my Egg Money balance is £0, but I don't tell BigBucks Bank this]

So, I now have:-

• Current Account Balance = £0
• Egg Money Balance = £+7000 [credit limit = £5,000, APR 7.9%]
• BigBucks Visa Balance = £-7000 [credit limit = £7,000, APR 0% on BTs]

Notice that my Egg Money card is now in credit at this point.

I now log into the Egg website and request a Balance Transfer from my Current Account to my Egg Money card.

So, I now have:-

• Current Account Balance = £+7000
• Egg Money Balance = £0 [credit limit = £5,000, APR 7.9%]
• BigBucks Visa Balance = £-7000 [credit limit = £7,000, APR 0% on BTs]

So you see, we've effectively 'moved' £7000 from BigBucks to my Current Account. Once the cash is in my Current Account, I can move it onwards to my mortgage overpayment account, a high-interest savings account or wherever really.

As I owe BigBucks £7,000 at this point, I must pay them the minimum payment each month (somewhere around 3% per month) and repay the balance after 12 months so as not to incur any charges.

Important
No Cash Withdrawals ever take place - the whole process of transferring money from BigBucks to my Current Account is handled via Balance Transfers. Do NOT attempt to do this using Cash Withdrawals - they are certainly NOT at 0%!!

And that's about it really. Hope this helps.

drillstep66

Yes brilliant....crystal clear...thank you so much! I already have an egg money card...so I'm half way there!

tsharp

At which point did you make payment(s) to your mortgage, when you had the exact amount from stoozing for the remaining mortgage balance, or did you make them is lump sums as you went along?

Martinslovechild

tsharp wrote: »

At which point did you make payment(s) to your mortgage, when you had the exact amount from stoozing for the remaining mortgage balance, or did you make them is lump sums as you went along?

I made the payments as I went along.

During the initial 2 year period of the mortgage deal, I was allowed maximum overpayments of 10% per annum. It was during this period that I 'discovered' stoozing. Once I'd repaid the 10%, I stuck the remainder of my stooz pot into savings accounts; I didn't ramp my stoozing up fully at that point because I didn't want to max out loads of cards only to find I couldn't obtain lots of good 0% deals later on when the 10% restriction ended.

By the time the 2 year period ended, I was free to overpay as much as I liked - therefore I did! A month or so prior to this, I turned the stoozometer up to 10 and accrued £33,600 through 0% cards, all of which I threw at the mortgage; shortly afterwards, I applied for 2 further cards - the first offered me £12,900 which I paid into the mortgage the following month. Finally, the month after that I paid off a further £5,000. With all this extra cash in my overpayment fund, the mortgage interest reduced by £295 per month!!

It wasn't long before I arrived at the magical £100K point, although like I said previously, this is when things got a little trickier - not only were credit card companies beginning to clamp down on lending people lots of credit but balance transfer fees were becoming the norm. Fortunately, I benefitted from not paying much in fees during the peak years of paying off my mortgage because fees simply didn't exist on most cards. I remember paying a £50 fee once on a Capital One card with a credit limit of over £20,000, all of which was stoozed in my overpayment fund for 18 months at 0% !!! At the time I applied for this card, I already had over £60,000 worth of 'debt' on 0% credit cards - I couldn't believe the kind of credit limit I was being offered. It simply didn't make sense to me that I was being offered over £20,000 for 18 months for just 50 quid, which I could then deposit in my overpayment fund reducing the interest over the period by approximately £1,500 !! This was like receiving a pay rise of well over £2000 !!

Mrs_MakeaMint

MLC - thank you ,really. Having endured negative equity, endownment shortfalls and having to start a 25 year term again after already having a mortgage for 10 years, I have just asked my Bank to reduce the term in order for me to make monthly over-payments greater than the £500 limit they set.
This NEVER crossed my mind before and I just accepted 25 years without question. Of course, I am currently in a position to make the over-payment but I have 1 year left fixed at 4.89% . So if it gets difficult later, I'll reluctantly increase the term again. Although the plan is to try a bit of 'stoozing' although I don't have any debts to transfer to credit cards as I 've paid these off already - so not sure how easy it will be other than via Egg Money ( I already have a CC with them).
Just one question - I have £10k in a saving account. Would this really be better of used to reduce the mortgage?

MLC - you are a SAINT!!!!!!!!

Martinslovechild

Mrs_MakeaMint wrote: »

I have just asked my Bank to reduce the term in order for me to make monthly over-payments greater than the £500 limit they set. This NEVER crossed my mind before and I just accepted 25 years without question.

It's bizarre isn't it that in retrospect, the most obvious things are sometimes the very things we don't see!! This technique is a very simple & powerful method of circumventing banks' £500 monthly maximum overpayment restrictions.

Mrs_MakeaMint wrote: »

I am currently in a position to make the overpayment but I have 1 year left fixed at 4.89%, so if it gets difficult later, I'll reluctantly increase the term again.

Agreed, you may need to consider increasing the term but it really all depends - in all likelihood, your monthly payments are certain to increase to 1% higher than they are now or thereabouts, but you'll also hopefully be able to reduce your mortgage significantly in the meantime by overpaying more than £6000 in the coming year. Don't forget to search for the best mortgage deal when your current deal ends, particularly if you're considering stoozing.

Mrs_MakeaMint wrote: »

Although the plan is to try a bit of 'stoozing', I don't have any debts to transfer to credit cards as I 've paid these off already - so not sure how easy it will be other than via Egg Money (I already have a CC with them).

You need to re-read my various updates on this thread - you don't need existing debts to transfer (in fact, it works in your favour if you don't have existing debts) - indeed, the debts you'll be transferring to new 0% cards are ficticious - you in effect create an illusion of transferring 'debt' from your Egg Money card, which in reality carries no real debt at all. For a detailed description of what I mean, read this thread in its entirety - there are full instructions on the techniques which you need to use.

Mrs_MakeaMint wrote: »

I have £10k in a saving account. Would this really be better off used to reduce the mortgage?

It depends on the rate of your mortgage account, savings account and whether you're a basic-rate or higher-rate taxpayer.

Let's assume you have a Sainsbury's Online Savings Account paying 6.25% gross, your mortgage is 4.89% fixed and you're a basic-rate taxpayer:-

You'll therefore be earning 6.25% * 0.8 = 5% net
As your mortgage rate is 4.89%, you're currently slightly better off in savings (providing your savings rate is more than 4.89 / 0.8 = 6.1125%).

If, however, you're a higher-rate taxpayer:-

You'll be earning 6.25% * 0.6 = 3.75% net
As your mortgage rate is 4.89%, you'd be better off overpaying on your mortgage.

You'll really need to do the maths to determine where to best place your £10K.

Mrs_MakeaMint wrote: »

MLC - you are a SAINT!!!!!!!!

You're making me blush now!!