What do I do with leftover money

markwilkinson

I think that might have been a result of using my iPad lol (and not proof reading before posting). At least you didn't take the mickey out of our chocolate coloured bathroom suite.

Apodemus

theoretica wrote: »

It is often a matter of flexibility - you need to make the fixed payment, you can overpay or not. If you took it over a shorter period there wouldn't usually be the option to pay less.

Also, you might not get the shorter term if the mortgage company thinks the payments are or might be unaffordable.

Quite agree! In my case the fees to change to a new mortgage were excessive, whereas simple overpayments were flexible and easy. Technically there might have been slightly more lucrative ways of doing this, but simplicity wins out.

Pincher

Infrastructure is best done all at once, to minimise disruption.

Decoration is when there are good deals, like carpet sale at John Lewis.

chelseablue

Thank you for all the advice, very helpful


As I posted above, I do have 12k available on my 2 credit cards, but neither are 0%.
If I wanted 0% I guess I would have to close both my credit cards, wait for my credit file to update and reapply elsewhere?


My Barclaycard is a cashback card and I've been a customer about 10 years so wouldn't really want to close an account with such a long history.


My mortgage rate is 1.49% until 2018, my savings rate is 3% (although I've read Santander want to lower the interest rate to 2%??)
So perhaps its better to leave the overpaying until my house is done?


In regards to where does the work in the house ever end, I am very disciplined with money, always been a saver.
When I bought my flat in 2010 I had it repainted and re carpeted throughout and that was all the work I ever did in it in the 6 years I lived there :rotfl: apart from buying furniture as I moved in with a bed and TV and that was it

Kim_13

While you can beat your mortgage rates with your savings interest, I would split between improvements and saving. I would want the improvements done by the time your mortgage rate goes up, then chuck everything you can at overpaying (assuming you have a decent amount in cash savings for emergencies.)

Have you exhausted all higher options before putting savings in the 123? The Santander Regular Saver for one?

atush

chelseablue wrote: »

Thank you, I already have 2 credit cards, I have available credit of about £12,000 but they are not 0%


So I would rather not do anything on credit

You are missing the point, using a 0% interest free card to do the work, while meantime saving the money to pay it off, means you wont be paying any interest so not really credit in the traditonnal sense like your normal cards (which you should never carry a balance on.

So I think you should rethink the advice IF you qualify for an interest free card.

In the case you dont go this way, 600 on t he house, 600 into savings (use current accts to get 3-5% on this). DONT overpay mtg if you have a decent rate.

chelseablue

Kim_13 wrote: »

While you can beat your mortgage rates with your savings interest, I would split between improvements and saving. I would want the improvements done by the time your mortgage rate goes up, then chuck everything you can at overpaying (assuming you have a decent amount in cash savings for emergencies.)

Have you exhausted all higher options before putting savings in the 123? The Santander Regular Saver for one?

Good plan, rate is up in March 2018, so that's a good date to aim for in having the house done and furnished


I've not looked into the Santander regular saver, will check that out

chelseablue

atush wrote: »

You are missing the point, using a 0% interest free card to do the work, while meantime saving the money to pay it off, means you wont be paying any interest so not really credit in the traditonnal sense like your normal cards (which you should never carry a balance on.

So I think you should rethink the advice IF you qualify for an interest free card.

In the case you dont go this way, 600 on t he house, 600 into savings (use current accts to get 3-5% on this). DONT overpay mtg if you have a decent rate.

My credit rating is excellent so I think I would qualify, only thing is would I get a 0% card(s) with a high enough limit.


My salary is £31k and I already have 12k available so I might not be offered a big enough limit (unless I close down existing cards?)

jimjames

chelseablue wrote: »

My credit rating is excellent so I think I would qualify, only thing is would I get a 0% card(s) with a high enough limit.
My salary is £31k and I already have 12k available so I might not be offered a big enough limit (unless I close down existing cards?)

We did building work and put £15k on 0% cards. I could have paid it from savings but why spend money you are getting 5% interest on when you can borrow 2 years at 0%. I do also have a lot of other cards and that didn't affect applications but everyone is different so that may not be the case for you.

If you don't have any emergency fund then that's worth building up too so if your boiler or car breaks you have the money to sort it. How much have you already saved with this £1200 per month you have available?

edwink

Dan83 wrote: »

i don't understand why people over pay mortgage's, if you wanted to pay it off and be mortgage free sooner, why not take it over a shorter period?

I'd be more tempted to send the money getting the house to a standard you are happy with before starting to save, and I'd save before I overpaid.

A lot of homebuyers are never quite sure of what amount of money they will be left with at the end of the month after paying their mortgage, bills and anything else. So getting a 25 year mortgage for example makes the payments more manageable than say a 15 year mortgage. Then you can over pay any amount you have left over every month if you want to. Also you can have over payment breaks if anything unexpected arises as you have not committed to paying the extra money by having a mortgage with a shorter lifespan.

The thing with doing the house up first is that you can only do so much at any one time. So some of your left over money at the end of the month might as well go towards the mortgage if there is any leftover as long as you have a little savings pot stashed away for a rainy day.

We moved in to our house 7 years ago and had to do every room. We sorted the house as and when we could and overpaid anything we had left over at the end of the month. We now have a lovely home and are delighted to be mortgage free. Freedom from your mortgage is the best feeling ever.

So I would do your house up slowly, left over money pay towards a savings pot like maybe £100 a month and the rest of the excess money pay towards your mortgage. This is just my opinion because it worked for us and we are so pleased we did things the way we did. Remember that some lenders only allow you to repay £500 a month though or a certain percentage of your mortgage.

Hope that is some help to you

Edwink