Overpayments lost forever?

stayathomedad_2

For the past few years I have been overpaying on mortgage with every spare penny we have got.

It means we have no savings at all. Now after a couple of health scares and jobs looking less secure it seems wiser to have some savings especially as mortgage rates are lower than savings rates up to a point.

Put in an application for an offset mortgage with first direct but they say they cannot offer any more borrowing than our outstanding mortgage without evidence of what it will be spent on.

Is there anyway round this without making stuff up about what we want to spend money on?

libf

Is your mortgage currently with First Direct? Will they let you skip mortgage payment up to the value of your overpayments?

stayathomedad_2

Current mortgage is with another company. We got a 2 year fixed rate on a short term (10 years) nearly two years ago wanting to force ourselves to make overpayments compared to the term we would have gone with (about 20 years). Looks like I have screwed us up completely now we want more freedom.

Only way forward I can see now is taking out a long term and piling the disposable income created into the savings accounts. Or we can make up that we want the money for something else. I'm guessing it would have to be a home improvement and a new car or similar wouldn't be valid.

libf

Which lender is your current mortgage with? Are you sure that you can't agree with them to stop payments up to the current value of your total over payments?

Thrugelmir

Why not reschedule your new mortgage over a longer term?

Where you asking to borrow more from First Direct?

thriftylass

stayathomedad wrote: »

Put in an application for an offset mortgage with first direct but they say they cannot offer any more borrowing than our outstanding mortgage without evidence of what it will be spent on.

We just went to Nationwide for a 3 year fixed deal plus an additional 8k borrowing for a car. They didn't want proof although in the interview we had to explain how that would be a good idea to borrow for a used car over the next 18 years. They were happy when we said a loan would cost us more and we will start overpaying in two years anyway. Home improvement would have been fine too although I think the minimum extra borrowing would have been 10k. Despite the extra borrowing we stayed below 75 LTV which seemed important.

stayathomedad_2

We could borrow and additional £38,000 before we hit the 60% LTV mark so I would have thought we were pretty low risk.

I estimate our overpayments over the last two years to be about £19,200.

Angie_B

stayathomedad wrote: »

We could borrow and additional £38,000 before we hit the 60% LTV mark so I would have thought we were pretty low risk.

I estimate our overpayments over the last two years to be about £19,200.

You keep using the phrase "overpayments" however you haven't actually been overpaying.

As per your earlier post, you shortened the term to 10 years and hence what you have been doing is paying the contracted amount.

Some banks will let you borrow back overpayments; however these need to be actual overpayments, not just you meeting the payments that you agreed to meet.

To get more money out of the your mortgage, you will need to ask for additional borrowing or re-mortgage on a longer term and start putting the difference between what you are paying now and what you would pay on a longer term into savings.