interest only mortgage

Delete33

Hi All
My first post on this thread. I have an interest only mortgage with Paratus used to be with GMAC. If I make extra one off payments during the year what happens to the payments? Are they swallowed up by interest or what? Just been checking on Noodle and the balance does not seem to have moved even though I have made some one off payments due to receiving redundancy money.

Thrugelmir

Contact Paratus and request a statement for your mortgage account.
Then check to see that the additional payments have been credited to the account. If they haven't then follow it up.

simpywimpy

I made over payments to an IO mortgage and found they didnt come off the balance because they held them in a separate account so it was pointless. I guess different firms have different rules on overpayments

Delete33

Hi Simpy Wimpy
This sounds like Paratus are not putting my extra payments on the balance. What eventually happened to your extra payments?

Thrugelmir

The link below explains how Paratus work.

http://www.paratusamc.co.uk/resources/documents/InformationForInterestOnlyBorrowers.pdf

Delete33

Thanx Thruglemir
So if I pay 1000 it comes off the balance straight away? The overpayments of less than 1000 only come off the balance once they add up to £1000 is this correct?

Delete33

Simpy Wimpy are you a politician as you did not answer my question. What happened to the extra payments you made on your mortgage?

Thrugelmir

Delete33 wrote: »

Thanx Thruglemir
So if I pay 1000 it comes off the balance straight away? The overpayments of less than 1000 only come off the balance once they add up to £1000 is this correct?

That's the way it reads. As if they are held in a separate account. Though the interest you are charged will be reduced to reflect the balance held.

Either way making overpayments is beneficial in the longer term.

Delete33

Hi all, have not posted for a while. I have continued to make over payments on my mortgage and the balance has gone down. The over payments come off the balance once they reach £1000, thank you for your help and support everyone.