Is paying off a mortage depreciation of capital?

iammumtoone

Spendless wrote: »

I believe in January of each year. I am not sure of exact date, the years that you have to have paid enough NI contributions in change, so it would depend on the month that you start claiming and the dates when you applied for another claim and if you were eligible.

In the meantime, how would you manage financially to support yourself and child?

If thats right this isn't an option to me I can't survive until January until I start claiming. I might just have been able to last the 13 weeks in between if the mortgage was paid off but even that would have been a stretch.

iammumtoone

Alice_Holt wrote: »

Contribution-based ESA details here:
http://www.entitledto.co.uk/help/jobseekers-allowance

50 times the lower earnings limit is c£5,550. If you earned more than that in 2014/15 and 2015/16 tax years, and paid 26 weeks contributions in one of those tax years - then you should qualify for CB -JSA if you claim it in 2017. thanks I will be entitled to CB-JSA then

How does the offset mortgage work. Do you have a savings account with the same bank, which is netted off your mortgage? If so how much savings do you currently hold?
Money is held with my mortgage company and appears on my mortgage statement, I have to apply to them to take it out. I am not sure of the amount will need to check next week.
Total money in mortgage account, other money in my name and endowment surrender will be over £16K, I also need to check endowment surrender value next week.

..........

Alice_Holt

My view FWIW.

Since you are not imminently about to claim IB benefits.
It would be perfectly reasonable to assume getting a job offer before the 6 months CB JSA ends.
But your current job prospects are uncertain, and you wish to reduce future outgoings by settling / reducing the mortgage payments. Then such a decision would not be made with an intention to qualify for IB benefits.
If the DWP attempted to say otherwise, you would have a strong defence to appeal a deprivation of assets ruling.

silvercar

I have been overpaying my mortgage, it is an offset mortgage where the over-payment is available for withdrawal.

I have a repayment mortgage but also an endowment.

I am confused whether it is interest-only, endowment, repayment, offset.....

An offset mortgage would generally be interest only with the option to save money to eventually repay the mortgage. I wouldn't class that as a repayment mortgage.

I can understand keeping an endowment policy from a previous mortgage going in order to (a) have some life insurance and (b) towards the capital repayment at the end of the term ie if you haven't saved enough in the offset.

I wouldn't class any of the above as repayment mortgages.

iammumtoone

silvercar wrote: »

I am confused whether it is interest-only, endowment, repayment, offset.....

An offset mortgage would generally be interest only with the option to save money to eventually repay the mortgage. I wouldn't class that as a repayment mortgage.

I can understand keeping an endowment policy from a previous mortgage going in order to (a) have some life insurance and (b) towards the capital repayment at the end of the term ie if you haven't saved enough in the offset.

I wouldn't class any of the above as repayment mortgages.

I definitely have a re-payment mortgage.

I might not have an offset mortgage, possibly I have used the wrong term. My mortgage allows me to overpay which goes into a separate pot which I can access when I like, that pot can either be used to reduce the interest payable on the main mortgage or to shorten the term of the main mortgage. I believe it can also be used to take a payment break

I kept my endowment as it has life insurance and critical illness cover. Plan was once I had enough money available through combined over payment of mortgage and endowment to pay the mortgage off.


EDIT: just checked the paperwork it is called a flexible mortgage. I have just over 3K in the 'pot'. Apologises everyone I assume as its not an offset mortgage the situation might be different?

TELLIT01

iammumtoone wrote: »

If thats right this isn't an option to me I can't survive until January until I start claiming. I might just have been able to last the 13 weeks in between if the mortgage was paid off but even that would have been a stretch.

The fact that the qualifying years change in January doesn't mean you have to wait until January to claim JSA. Assuming you have an entitlement to Contribution based JSA you just won't get anything for the first 7 days.
Although the idea of reducing the mortgage seems like a good one, take care not to leave yourself too short of cash in case you don't get another job quickly.

epitome

To qualify for JSA or ESA Conts you have to have earned in both tax years 50 times LEL in total (its about £5700). In addition in 1 of those tax years you must have had 26 weeks where you earned the LEL threshold or above. You can look up LEL amounts for tax years on HMRC./google.

To qualify for JSA Conts twice you would claim now in 2017, for 6 months, when it runs out, you would close your JSA claim. Then wait 13 weeks with no claim (or claim ESA Conts), and then after 13 weeks make a new claim to JSA conts in 2018.

To qualify for conts each claim will depend on tax years.
a claim in 2017 will use 14/15 & 15/16
a claim in 2018 will use 15/16 & 16/17

bigbill

You would have to wait until April 2018 to claim CBJSA again and have a minimum 13 week gap with no claim before this time.

Given that Mortgage Interest help on means tested benefits is becoming a loan after April 2018 for all new claims and for all existing claims shortly after April 2018.

I would say that any future DWP decision that you have deliberatly deprived yourself of your capital or still have notional capital due to using savings to pay off any mortgage after April 2018 will be a thing of the past.

epitome wrote: »

To qualify for JSA or ESA Conts you have to have earned in both tax years 50 times LEL in total (its about £5700). In addition in 1 of those tax years you must have had 26 weeks where you earned the LEL threshold or above. You can look up LEL amounts for tax years on HMRC./google.

To qualify for JSA Conts twice you would claim now in 2017, for 6 months, when it runs out, you would close your JSA claim. Then wait 13 weeks with no claim (or claim ESA Conts), and then after 13 weeks make a new claim to JSA conts in 2018.

To qualify for conts each claim will depend on tax years.
a claim in 2017 will use 14/15 & 15/16
a claim in 2018 will use 15/16 & 16/17

epitome

bigbill wrote: »

You would have to wait until April 2018 to claim CBJSA again and have a minimum 13 week gap with no claim before this time.

Given that Mortgage Interest help on means tested benefits is becoming a loan after April 2018 for all new claims and for all existing claims shortly after April 2018.

I would say that any future DWP decision that you have deliberatly deprived yourself of your capital or still have notional capital due to using savings to pay off any mortgage after April 2018 will be a thing of the past.

I have quoted your bit in red. It is not clear what you are saying. But you can have 2 periods of JSA Conts each for 6 months, it is even possible to get a third period in the right conditions without having worked again since the first claim.
To qualify for the second period of JSA you wait with no claim to JSA for 13 weeks. During those 13 weeks you can legitimately claim ESA C, before going back to JSA C.

Just that your words "with no claim before this time" does not compute, you had your first JSA claim "before this time" and you can claim ESA C during those 13 weeks (obviously if you get a med3).

You also quoted my post and bolded tax years not sure why?

KiKi

iammumtoone wrote: »

I definitely have a re-payment mortgage.

I might not have an offset mortgage, possibly I have used the wrong term. My mortgage allows me to overpay which goes into a separate pot which I can access when I like, that pot can either be used to reduce the interest payable on the main mortgage or to shorten the term of the main mortgage. I believe it can also be used to take a payment break

I kept my endowment as it has life insurance and critical illness cover. Plan was once I had enough money available through combined over payment of mortgage and endowment to pay the mortgage off.


EDIT: just checked the paperwork it is called a flexible mortgage. I have just over 3K in the 'pot'. Apologises everyone I assume as its not an offset mortgage the situation might be different?

Yes, this is an offset mortgage - I have exactly the same arrangement, same title of 'flexible' - probably the same mortgage, and it is repayment. (I've never heard the idea that offset mortgages are interest-only to pay the capital off.) As you say, you overpay, and all money goes into a savings pot which is then offset against the capital. So if you have £3k in the pot, you don't pay interest on £3k of the capital.

It's an interesting one, though - whether the pot is considered as 'savings'. I think it probably is, as it's accessible to you.

As an aside, if you have the same flexible mortgage as me - Santander? - you may find that you're better off putting that money in a savings account as the interest on that flex mortgage is currently so low (0.74%) that you'll be better off getting a higher rate of interest than having it in the savings pot.

I can't be of any help on the benefits front, but thought I'd clarify the mortgage thing for you as I have exactly the same arrangements.