Giving it a go!

Libranharry · 1 December 2018 at 6:27PM

Hi all,

The first and only time I posted was a week after my ex husband left me and I was in a right pickle emotionally and financially.

I came here originally to ask for advice regarding a removal of borrower from my mortgage, and some people were really helpful. Unfortunately my mental health took a serious turn and I had all on juggling my children, my job, solicitors bills, and the cost of living so I buried my head and kept off social media.

Anyway...... Here I am 3 years later, divorced, full custody of my three children, debt free and hopeful of support and advice.

I have hopes and aspirations to pay my mortgage off within the next two years. I wanted to do it by the time I hit 40 but since that's next year the chances are it's not going to be possible.

I bore the life out of my colleagues, talking mortgages whenever I can, over payments, terms, etc, so I thought I should perhaps try with more like minded people! 🙏

When I got divorced and was made sole borrower on the mortgage they changed the term from 12 years to....... 33 years and 3 months! 😱

For the past two years I have paid my maximum fee free amount of 10% and by next week I will have done it again for this year! My son says that's an achievement in itself, so I'm teaching him well, I think! Due to this, I am now down to 20 years and 7 months.

Here's the bit I really need advice on -

Next year my fixed rate mortgage is up for renewal and I'm hoping to make a larger payment, which the bank say should be do-able. I can renew it four months before the end of the term apparently, and I want to hit it with about 14k if I can. If I manage to save that, plus the 10% again, before renewal that will leave me with a mortgage of around 8k. I know it doesn't sound a lot but I only work 27 hours a week with little chance of guaranteed overtime and do not receive any maintenance payments from the artful dodger (ex who has forgotten three growing kids can't wear or eat fresh air!)

Will I GET a mortgage for such a little amount or will I be forced to stay on a higher variable? I don't want a fixed term, because I want to get rid of it as fast as I can. Can anyone help me figure out what the best option is please? The bank keeps telling me they will lend as little as 1k but they can't give any more details as I'm still on a fixed rate package.

Also, I'd love to hear from anyone else who is on the same path! I've cut so many corners, substituted, foregone and given up so much these past three years in order to over pay. No way was I having that round my neck until the day I retired. I'd love to hear success stories from people in similar situations.

Sorry for rambling.... As I said. Any help, ideas or support would be amazing!

kev2009 · 1 December 2018 at 6:44PM

Hi,

Relatively new to Mortgages, got mine in 2015 and I've only just made a over payment today of a small amount just to start with. To my knowledge I think during the fixed term, you can pay 10% each year, then it would need to move to a variable rate so you can then pay whatever you want as a over payment, subject to there being no limit, and then you would fix again if interest rates are not favourable on variable OR if you just want to know exactly what your paying and avoid any increases. Personally, i am on a 5 year fixed which runs out in 2020, due to only having the mortgage for 5 years by 2020 i'm no where near paying it off so i'm planning to fix for another 5 years and then over pay each year as much as i can to then have a reduced balance on the mortgage. I will then review it but due to some quick calculations, i'm thinking i might fix for 2 years at the end of my next 5 years and then either fix for 1 year or go variable if i have funds i can make larger over payments with a view to hopefully paying it off in full. My ideal goal is to pay it off by or before 2030, meaning i'd have the mortgage for 15 years max rather than the 30 years i'm signed up to.

From now till 2020 i'm overpaying and reducing monthly payments in case rates rise i can spread it over a long term meaning hopefully keeping monthly payments down but from 2020 once i re-fix for 5 years, i'l switch and overpay and reduce the term.

I believe you can mortgage for 8k, i think the minimum varies fro different mortgage companies but it may be worth doing variable depending on the rate if you plan to still over pay.

Libranharry · 1 December 2018 at 7:15PM

Fantastic news on overpaying! It's an amazing feeling isn't it?! I love hearing the colleague tell me how many months I have reduced my term by! Pat yourself on the back and be proud of your achievement and keep on reducing it.

You mentioned one year fixed term? I have never found one yet. That would potentially work for me as I could still overpay the 10% without the concerns of a variable rate that can fluctuate. I've never been a fan of those. I prefer definite figures. 🤣

kev2009 · 1 December 2018 at 8:11PM

Sent you a PM libranharry, not sure if any good but worth a look

Kev

kev2009 · 1 December 2018 at 8:16PM

Thanks, yes feels good even though in comparison to what i owe, it is a very very small amount. Just now waiting for online banking to reflect the change so i can see the new figure.

I have a spreadsheet but unfortunately it never seems to be quiet right, its always a few pennies out etc and not figured out why. So i'm manually altering by "making out" I've pad a extra 1 or 2 p or not paid 1 or 2 p to make the figures balance. When i get my statement from 2018, i'm going to see where it changed from the figures i have in the spreadsheet. By the end of the fixed term, i want to have a whole number i owe, not .xx as my spreadsheet wont allow .xx just whole numbers so i want it a whole number to be able to keep an eye on it and be able to gauge what i need and what i can pay off and what will be left, the time left etc.

Kev

Libranharry · 1 December 2018 at 9:46PM

I understand. Until I get my final figure next September it's mostly guesswork.

I can figure out how much interest will be reduced, and right now it's still very minimal due to the length of loan, but I'm taking it directly off the capital and keeping the monthly payments the same therefore reducing the timescale. Less time means less interest to pay. If you can do it that way I recommend it.

I need a full settlement figure really. I say it will be roughly 8k but with settlement fees it could be far more. All I can definitely say right now is I have nine months to clear as much as humanly possible then cross my fingers they will give me a good deal for the last leg......either that or look for another package elsewhere. The question remains the same tho - will I secure a mortgage for such a small amount or would I be better with a short term secured loan. Eek!

bexster1975 · 2 December 2018 at 7:57AM

Hello and welcome

What an achievement so far, and what an amazing achievement if you succeed in your new plan!

As for getting a " good deal" on £8000, I think by that point I was paying about £12 a month in interest on a 2.79% mortgage ( don't quote me, figures are rough as I never kept tabs in that religiously at that point). My point is, even if your lender won't give you a " decent" rate, it's likely to be small fry in reality. Also, once you gave £8000 to go, surely even taking a leisurely pace compared to the next 9 months, it'll be all done in less than a further 18 months. As for settlement fees, your main one would be an ERC if you are in a fixed. But on £8000, fees would still likely be small. Could always keep the cash in a " high" ( I realise that's relative Interest account until fix is up.

Either way, good luck

Bexster

julicorn · 2 December 2018 at 8:54AM

Hi Libranharry,

welcome and happy new diary! Sounds like there is an end in sight for you already, exciting times!

I would echo what Bexster said, even a 1% difference in interest rates on the amount you've got left would be equivalent to a 0.1% difference on a balance of £80k, or 0.05% on a balance of £160k, so in other words likely to have much less of an impact than you might think.

Either way, wishing you all the best!

Libranharry · 2 December 2018 at 12:31PM

Thank you everyone!

I feel like it's a massive achievement since I was left with a 67k mortgage to pay on my own, whilst working for minimum wage. I had such a battle on my hands from the get go because firstly my ex decided he wanted half, (which he didn't get but I paid him out a lump sum) then the bank didn't want to make me sole borrower due to my earnings. I had to jump through some real hoops to get to that stage.

The driving factor in all this is that I want to own my house outright, then no one can ever try to take it away from me again. I'm petrified of losing it and losing everything I fought for for my children.

I'm pretty savvy when it comes to budgeting and can live on a shoe string. I think I need to be looking at a variable rate when I renew, as I will avoid fees that way and can overpay what I want when I want.

Has anyone been at the end of their term and made a large payment before renewing? How does it work? The bank seem to think they can do it as part of the new package, but it's really baffling me. I don't want to pay any charges if I can avoid it.

Roll on next week when I can make the final 10% payment for this year.... And the final mortgage payment of 2018!

A_Frayed_Knot · 2 December 2018 at 7:05PM

Libranharry wrote: »

Thank you everyone . . .

Has anyone been at the end of their term and made a large payment before renewing? How does it work? The bank seem to think they can do it as part of the new package, but it's really baffling me. I don't want to pay any charges if I can avoid it.

Roll on next week when I can make the final 10% payment for this year.... And the final mortgage payment of 2018!

Hello :wave: and welcome

You have done fantastically well so far :T you should be so proud, the way you have managed it :T

Three years ago, when I needed a new deal, I saw my mortgage adviser at the bank, who was great !!! not often they get praise :T and what they done was just to take the balance at the time of starting the new deal and transferred it over (I stayed with H@lif@x) that was at the beginning of Nov (Trust me, to look for a new deal, so late on in the year

) - so I was told I was allowed my 10% o/p's up to the beg of Nov, then from Nov (start of new deal) to end of Dec (raided every penny I could manage (as when 31Dec is over, you cannot claim that 10% allowance back in any shape or form) - I was allowed another 10% o/p's :j then on 1st Jan - I was allowed another 10% o/p's:j:j This made a huge difference to me.
However after my 2 year deal finished (1 year ago), I decided that another 2 year deal would restrict me too much, so decided to go with SVR :eek: which was more than double.
Who needs any more incentive to pay off quickly when you are paying them more than double interest, spurred me on, no end, there was no way they were getting any extra out of me, if I could help it

Oh, and no charges unless you go over your 10% allowance in deal. You can pay as much or as little as you like - out of deal.

Sorry - had a bit of a ramble there

but hope it all helps.

Libranharry · 2 December 2018 at 7:59PM

so I was told I was allowed my 10% o/p's up to the beg of Nov, then from Nov (start of new deal) to end of Dec (raided every penny I could manage (as when 31Dec is over, you cannot claim that 10% allowance back in any shape or form) - I was allowed another 10% o/p's then on 1st Jan - I was allowed another 10% o/p's This made a huge difference to me.

(chances are I have only copied and pasted that. Not au fait with this quoting system thingy yet! &#55357;&#56834; I'd appreciate some advice if I've gotten it wrong! &#55357;&#56911;)

Soooo..... That reads to me that you got 20% o/p options? That's BRILL! I wonder if I wait until I am out of deal, then smack it with everything I have, but ensuring I've made the 10% overpayment before I come out of the deal first, I might actually manage to get this albatross down to the 8k I am hopeful of?

I've just been juggling figures.... Which I do quite often.... And I won't be able to save very much contingency for the first five months of the year, which is also a massive concern for me. I'll be able to pick it back up in May tho, I think. Don't get me wrong, I'll still have some fall back funds, just not as much as I feel happy with. The trouble is I'm saving in too many pots. Makes no wonder I'm always skint when I am ploughing it out into different accounts! Ha! All a means to an end I guess. Once this big bill is slashed, I'll relax a little bit. Only nine months to go! I've had three children..... I can wait that long - I've had a bit of practice! &#55357;&#56834;&#55357;&#56397;

Giving it a go!

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