Hurrah, my MFW quest has started

abouttimetoo

Sorry, got another dilemma, actually that's not strictly true as I've pretty much decided but guess I'm just interested in what you would do?

As some of you may know I've stoozed £20k. I'm not regretting it but do think I should have researched the savings accounts I was considering in more detail as the amount of interest I can gain - when I take into account tax etc - is not lots more than balance transfer fees paid (although any free money is good:D )

So.. what I'm thinking of doing is using something like £2k of it as a mortgage overpayment - I can easily repay that from savings when the time comes.

I've only just started the number crunching in terms of how much mortgage interest I would save but early indications look good and if it pans out I might put some more of the stooze money off the mortgage and again repay from savings. I'm realy keen to take as much advantage as possible of the recent base rate drop.

What do you think, would you do it? :rolleyes:

PS if it helps any I am organised and would never be in the position of not being able to repay the stozze money when it is due

StuartGMC

abouttimetoo wrote: »

I have a 10 year old run around and normally do approx 2000-2500 miles a year (work away a lot). My car is probably only worth scrap value and currently has a few minor things wrong with it thatI'm guessing might be £300 ish to put right. I'm happy to spend this money but here is where the dilemma is - there is some pretty good deals to be had at the moment as the credit crunch has hit the car dealerships so I've been thinking is this a good time to change the car as opposed to in a couple of years time when my car will still be worth nothing but might have disintegrated and car prices may have gone up.

I'm only thinking of getting a second hand one for £2-3K, any thoughts:rolleyes: ???

ATT if you try to PX with the dealer let them fix the problems. Not sure what they'll offer but, the key question you have to ask them is "price to change" ignore the sale price on the car and offer on the trade-in, all that matters to you is the cash price to change.

If you have the cash in your current account then you can look to squeeze them on their month end position too! Not sure if anyone can confirm, but if the books close on a fixed week basis then next Saturday could be the day they are desperate to make sales to hit month targets. So, look around today if you can and then next weekend, give them the impression you could walk away to consider if they won't move down to a deal you are happy with.

You have nothing to lose in trying and a lot to gain.

I assume you know the new tax regime for 2009 and further changes in 2010 but doubt this is an issue for your requirements?

Good luck

abouttimetoo

Hi Stuart

Many thanks for your advice and I will certainly be following it if I change the car. I guess my dilemma is more around spending the money now as opposed to in 2ish years time.

I know no-one has a crystal ball but I just can't work out whether it is worth shelling out now (when i don't absolutley have to so can leave the money in savings) or whether I'll regret it in the future - when the car falls over - that I didn't do it now and take advantage of the market :rolleyes: :rolleyes:

I'm always interested in your views Stuart - can I ask if you have any around my thoughts to use some of my stoozing money to overpay mortgage rather than investing it?

abouttimetoo

abouttimetoo wrote: »

I've not yet received a letter from my mortgage provider confirming if they have dropped my mortgage rate following the drop in base rate.

Just spoken to my mortgage provider who has confirmed my rate will drop in November, I had hoped it was this month but sadly not:rolleyes: Anyway, I was pleased to find out that my payment will drop by £73.47 so I will make that up via extra overpayment:D

abouttimetoo

Just to say that I've made 2 overpayments this month - my normal one of £400 and I've also made one of £1000 from my stooze pot. Before any die hard stoozers have a heart attack I can promise you that I do have the money to repay it when it is due and the interest I will save on my mortgage is greater than what I will get on interest :j

StuartGMC

abouttimetoo wrote: »

Hi Stuart

Many thanks for your advice and I will certainly be following it if I change the car. I guess my dilemma is more around spending the money now as opposed to in 2ish years time.

I know no-one has a crystal ball but I just can't work out whether it is worth shelling out now (when i don't absolutley have to so can leave the money in savings) or whether I'll regret it in the future - when the car falls over - that I didn't do it now and take advantage of the market :rolleyes: :rolleyes:

The critical aspect here is whether your present vehicle is incurring costs other than a service? For example, if you are soon to need to replace all four tyres, then you change it, you won't get any more trade-in for having four good boots on it.

It is always better to have the time to look and consider a purchase rather than a "distress" purchase. In your case I would now be identifying a range of models that you are interested in, check on places like Parkers for the reviews which will tell you the weaknesses each one has (I think these used to be a cuople of pounds to download as PDF and was very useful when by my S-Type) and if they fall into different tax levels under the new system. Check online like AutoTrader for the prices from trade outlets (not private sales unless you wish to risk that plus then sell your own car).

This should allow you to then have a set of specific models and features (e.g. full service history, HPI checked, 5-door, a/c etc) you want, and to then start monitoring what is available in your area. If the right vehicle comes along, look over it carefully (not in the rain! - you'll not see scratches or paint problems then, so need good daylight and a dry day) and then see what you can haggle. Remember, you are in control, let then know you are looking at some others, comment that perhaps they've not provided as good a price-to-change as you'd hoped etc.

The time now to Christmas may be good to push on things like 12 months Road fund License (tax), full tank of fuel, free service when due, 12 month full waranty... but, at your price point you may need to be more realistic about what they can offer e.g. aim for the above, with an expectation of getting the warranty unless you are happy to risk otherwise and the road tax.

Good luck

StuartGMC

abouttimetoo wrote: »

I'm always interested in your views Stuart - can I ask if you have any around my thoughts to use some of my stoozing money to overpay mortgage rather than investing it?

Others here are better placed than I to comment, but basically the maths is quite simple for say £x overpaid:

1) What interest would £x save on the mortgage, assuming you have other cash to then repay £x when due on the Stooze, then of course this other money could be gaining interest at the same time awaiting call-off to pay off.
2) If you invest it, how long would it be there and what degree of risk would you take:
a) High interest account / Cash ISA (noting limit on latter and can't then repay it later once £3600 has been passed)
b) Markets, possibly not a good move unless you are watching a range of equities already, have a clear understanding of the markets they are operating in and have alternative cash to draw on if the value of the stocks drop just before you need to sell them - plenty of Russian Oligarths are struggling to now repay the loans they took out so they could invest....

But, if you have some reserve cash to use to pay off the stooze, then buying equities or funds now means they are cheap and you could then keep longer until they grow, but this could be mid-2010, or longer.

Your call, but I tend to be a bit cautious, so would probably opt for the investment with good interest rate (but having said that, I don't have Cash ISAs at present (but see my thread for reasoning wrt timeline etc) so I suppose I could be seen as anything other than cautious...)

I look forward to comments from others better placed than me.

setmefree2

abouttimetoo wrote: »

Just to say that I've made 2 overpayments this month - my normal one of £400 and I've also made one of £1000 from my stooze pot. Before any die hard stoozers have a heart attack I can promise you that I do have the money to repay it when it is due and the interest I will save on my mortgage is greater than what I will get on interest :j

Well Done you:T:T:T

abouttimetoo

Hi Stuart

Thanks for your comments; I've done a lot of thinking in the last couple of days and have decided a few things and something else has kind of resolved itself. So... here's the plan

• have car looked at my mechanic friend to give me a full idea of what is wrong with it and how much this will cost (I know the cat converter has gone, the rear wiper needs new motor and at least two new wheels are needed - had to laugh at your wheels comment Stuart - as they've had slow punctures for ever and been fixed a couple of times. If the cost comes in at less than £500 will keep the car for the foreseeable and follow STuarts adive re really shopping around, deciding what I want etc
• I'd set myself a £2700 OP target for this year and now paid £3350, albeit £1k from stozze but had always hoped to make a lump sum payment from savings at year end
• Aim to have IO part at less than 90k by year end - even if only by one pound:D
• Had wanted to make further investment and by luck I've been given the chance to cancel a share option I had and re-invest at a better price so I'm going to use the money I get back to make the investment IUSWIM

Fingers crossed

abouttimetoo

Got a couple of jobs out the way this week some of which have been lurking for far too long!

• Sent letter to share company to ask them to explain why shares I hold are not reflected in my on-line holdings with them
• Rang mopay to find out why got less than expected for phone - turns out it's my fault as the phone was an earlier model than I had thought:o Must say fantastic service from Mopay in every way and will definately use them now to send off other phones
• Expenses all submitted - not a single day outstanding now
• Rang mortgage company to ask what my payments would need to be if I changed the term to £10 years - not intending doing this but wanted to check what they said against my own figures - glad to say they came out roughly the same but wasn't pleased to realise that I could have done that in April when I started this - mind you that would have meant less time spent with spreadsheet so every cloud and all that:rotfl: