Hurrah, my MFW quest has started

financialbliss

abouttimetoo wrote: »

My mortgage is split into two parts, 50% on repayment and 50% interest only. The daily interest is
· Repayment part = £14.21 interest per day
· Interest only part = £14.46
· Total = £28.67

See you've started overpaying which is great...

Hadn't previously sunk in that you're part IO and part repayment. Are these both @ the same mortgage rate?

Can you choose where your overpayments go, and if so, are you favouring repayment over interest only, vice versa or an equal split?

I note that the interest only part is costing more in interest. I guess the repayment is going down automatically, as you guessed it - you're repaying this, so it may be better to overpay on the interest only part to get that down?

That said, if you've got different rates for each, always pay off the higher one first.

Just curious at other people's numbers - sick of looking at mine as they never seem to be coming down as fast as I want them to!

FB.

PS - Have you enquired about converting the interest only to repayment to see what that may do in terms of monthly payment required and how this may alter the date you could clear the mortgage?

abouttimetoo

Hi Financial Bliss

Thanks very much, they were great instructions and worked first time :T

Regards
ATT

abouttimetoo

:mad: I've just typed a long post, pressed submit then my PC went wild and lI ost the lot. Typical isn't it, I normally do it in word first and then copy and paste but for some reason I didn't this time!

Off to do it again

financialbliss

abouttimetoo wrote: »

:mad: I've just typed a long post, pressed submit then my PC went wild and I lost the lot.

Hi abouttimetoo,

It may be that you've logged in, entered some text and went to submit this, but by the time you've entered and edited it, your "login" has timed out. You'll then probably get a login box again, and this can initially appear as though you've lost everything...

Either log in again - you should then get the preview of the post, or try the browser back button, after which you could copy and paste into an editor to work on a draft version there first.

Bet your response was to my 20 questions too!!

Don't know if that helps?

FB.

abouttimetoo

ha, yes FB, it was my answers to your 20 questions:rotfl:

I think you are right about what happened but then when I logged back in the whole screen went completely blank with the dreaded 'done' in the bottom left of the screen and the back button just kept bring up the grey sign in box confirmation in the middle. Fortuatnely, I have a good memory and think I've just about managed to re-create it word for word so will post it in a second

abouttimetoo

Hi Financial Bliss

Yes, both the IO and repayments parts are at the same rate which is whatever base rate happens to be and it changes with any adjustments the BoE make.

I can indeed choose which part the overpayments go to and I’m currently favouring the repayment part – more of that later – although you might have noticed that I managed to pay £50 of this months OP into the IO part in error:o

Regarding me currently favouring the repayment part; I’ve driven myself a bit mad with this one trying to work it out, as I’ve said both parts are at the same rate and both on daily interest and I kind of worked out that it didn’t make much difference in the short to medium term which one I overpaid, but I must admit I’m still not comfortable as I never usually ‘kind of’ work things out, so…. I would certainly be grateful for your thoughts and please feel free to tell me if I’ve been a complete dimwit (I’m also happy to split the OP’s between both parts if that is advantageous).

Right, now for the confession; until you mentioned about whether I had enquired about converting the IO to repayment I hadn’t even thought about it! I think I will look into it to-morrow and it will certainly be interesting to see what effect this could have on my MF date. Without knowing any detail my first reaction is that I would be a bit uncomfortable converting the whole lot to repayment as I've just started this MFW malarkey (hope that doesn't sound as if I'm treating this lightly )and I’m hoping to change jobs in the next 12 months and also don’t want to be fully committed and struggle if the base rate shoots up. Again just early thoughts but maybe I could convert some/most of it and build up to having it all on repayment.

Thanks for all your input and thoughts so far, this is a great site for bouncing ideas and thoughts off isn’t it – sometimes it’s hard to see the wood for the trees.

One last thing to report that made me laugh, I was telling my friend that I had started this diary (I’ve also ‘converted’ her to joining out MFW cult, oops, club) and she said, “oh, so it’s like a blog is it?”, I’m not sure if this is classed as a blog but if that makes me young and trendy then a blog it most definitely is :rotfl:

financialbliss

Sounds like some of my comments may have sparked a flame / gave something to ponder over.

At this time of evening, I'm struggling to do calculations - hopefully someone will pop along and work out what's best and save us both a headache

I appreciate that taking some of the mortgage off interest only could up your standard repayment significantly. Still, worth querying - cover all the bases etc.

Financial Bliss.

JonnyBravo

abouttimetoo wrote: »

I told my parents about my MFW quest straight away - I knew they would approve anyway as this was something they themselves did 22 years ago (when their mortgage rate was 14% :eek: )- I guess OP'ing was probably an even more unusual thing to do back then. Actually, mam and dad fell into OP'ing by accident as the bank cocked up their mortgage and they were paying about £100 per month extra - it took them a few months to realise this and then when they did took the view that if they had been able to afford it then they would keep on doing so. They kept on doing this with the occassional lump sum thrown in until the became MF:D They have been on at me for years to OP mine and have encouraged many others to do it but to be honest I've never really been in the financial position to do it before now(although I know I could have at least done £10 per month:o ) Oh, well, at least I've thrown myself into it now :T :T

Of course back when inflation was high they had more than overpayments on their side. Inflation, whilst bad for everyday living and for the economy in general, made your debt shrink rapidly (in real terms) simply with the passage of time!

abouttimetoo

Had a nice suprise this week; I swapped my electricity supplier to Bristish Gas (who I already have the gas with). My usual quarterly electric bill is c£40 but this week I got my first monthly bill from the new supplier and it was, wait for it, wait for it, £1.11! Even better was that I also received a £1.03 discount for paying by direct debit and they being the dual supplier so it was really only 8p:j :j

My first thought was that there must be some mistake but I have checked the meter readings from when they took over to now and the readings are correct so I'm very pleased indeed

abouttimetoo

financialbliss wrote: »

PS - Have you enquired about converting the interest only to repayment to see what that may do in terms of monthly payment required and how this may alter the date you could clear the mortgage?

I spoke to my mortgage company on Friday to investigate this further. I’ve obtained two quotes 1) to convert all the IO to repayment and 2) to convert £50k of IO to repayment. If I convert it all to repayment I can afford the monthly payment but that’s at the current rate, although I did ask how much it would be if it went up another one percent (to 6%) and I can afford that too.

It’s most definitely given me something to think about, but I need to think some more about it for the following reasons – some of which I’ve not shared here yet – for no good reason other than it’s not cropped up yet
· I might need to change my car in the next 12 months (it’s 10 years old now but for the last 6 ish years I’ve only done approx. 2000 miles a year due to me only being home at weekends) but it’s got a few niggles…
· I have a buy-to-let property and the mortgage will need to be renewed in December this year when the current rate expires so I might have arrangement fees to pay and/or a higher mortgage
· Typically I expect the BTL to be empty for 2-3 months a year, and I’m always prepared for this, but I’m always conscious that it could be emptier for longer so may have to dip into my savings
· I still want to change jobs in the next 12 months (as mentioned in previous posts)

BTW, the reason that I didn’t put it all on repayment when I took the mortgage in December 06 was that I couldn’t afford to at that time, however, I have had some substantial pay rises since then and just hadn’t thought about it in relation to changing the mortgage (I'm not normally so blonde, honestly :rolleyes: ) so thanks again Financial Bliss for the prompt :T