ste_p23
Member
Registered: 29th Dec 08
Location: Hindley,Wigan
User status: Offline
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Firstly apologies if this should be in house day but i wanted to gauge a general opinion from various members on the site.
Right im just looking for peoples opinion on what to do in this situation, if you where living with your partner and getting by quite comfortably but not well of by any means but after the mortage and all the bills etc where paid off each month if you had £400-£500 left over which would you do?
Would you over pay the mortage which is £400 a month and maybe say pay £200 extra on top of it, to bring the overall balance down and maybe keep a few hundered pounds tucked away for a rainy day each month.
Or would you?
Pay your standard mortage payments and save all the spare money so that if either of you lost your jobs you could pay the mortgage on a drip sort of basis out of that saved up money until the other had found work again?
Cheers all 
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Ben G
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Registered: 12th Jan 07
Location: Essex
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i just pay the standard payment and have been for 18 months now. would rather have the money in the bank and enjoy it than overpay and be skint every month.
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Dave
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Registered: 26th Feb 01
Location: Lancs
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The latter, unless the bank takes into account overpayments and gives you x amount of grace if you were to lose your jobs.
If you are responsible enough not to spend your surplus though I'd save it up as a back up/emergency fund.
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Robbo
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Registered: 6th Aug 02
Location: London
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overpaying on your mortgage will be a much better option than saving money as youll save thousands in interest whereas youll earn fuck all in interest. another option is a share scheme through your works, if available - they are like free money.
you cant live life on the basis of worrying/expecting to become out of work. and if that did happen, you can take mortgage breaks.
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ste_p23
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Registered: 29th Dec 08
Location: Hindley,Wigan
User status: Offline
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Thats the general idea i had myself as id prefer to save it however my partner seems to thinks its a good idea to overpay the mortage as our current deal is up in 8months and belives it will be alot cheaper if we do it this way as it bring the balance down when switching lenders
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Ben G
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Registered: 12th Jan 07
Location: Essex
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it is a good idea to overpay if you have the spare cash.
only reason i don't is because we need the money at the moment to pay off credit cards and do home improvements.
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Robbo
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Registered: 6th Aug 02
Location: London
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quote:
Originally posted by ste_p23
Thats the general idea i had myself as id prefer to save it however my partner seems to thinks its a good idea to overpay the mortage as our current deal is up in 8months and belives it will be alot cheaper if we do it this way as it bring the balance down when switching lenders
and she is spot on
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LeeM
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Registered: 26th Sep 05
Location: Liverpool
User status: Offline
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overpay for 8 months.
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RichR
Premium Member
Registered: 17th Oct 01
Location: Waterhouses, Staffordshire
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£200 extra a month over 8 months is £1600; it will be barely noticeable unless it drops you into a new LTV bracket. I always like to have a 3month fall back amount to pay the mortgage until such time that my insurances kick in should I be out of work through illness or injury. Once I've finished renovating I do plan to over pay the mortgage but with my deal I can pay upto 10% of the remaining balance per year, so I'll be more likely to save for a period of time and then pay off a chunk rather than uping my monthly installments
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RichR
Premium Member
Registered: 17th Oct 01
Location: Waterhouses, Staffordshire
User status: Offline
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plus you;ve only just moved in, give it time to settle into the routine incase you have any unexpected bills that you've forgotten or above budget
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ste_p23
Member
Registered: 29th Dec 08
Location: Hindley,Wigan
User status: Offline
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Thanks for the opinions i think to keep us both happy i may just alternate it per month and one month put the spare money into a savings account and the next month over pay the mortgage or if we cant agree on that i may just buy a new car again
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Ian
Site Administrator
Registered: 28th Aug 99
Location: Liverpool
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She is right - it will be easier to furnish a smaller debt.
It does reduce flexibility because the money is gone - but that is a pessimistic way of looking at it. If you lose your job, get another one. If you can't get another one, then go to the bank and tell them you can't pay and re-negotiate at that time. Generally they will be sympathetic to that as it's easier for them to take less money (and hopefully there would still be an income there) than for you to default completely and they take the house off you.
Far easier for them to accommodate that when it happens and far easier for you to spend the money to reduce the interest on your debt, rather than it sit in a savings account earning a lot less.
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Ian
Site Administrator
Registered: 28th Aug 99
Location: Liverpool
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quote:
Originally posted by ste_p23
i think to keep us both happy i may just...
Assuming that in 8 months she doesn't say I told you so when the same mortgage deals are not available, and you might not be able to retrospectively over-pay 4 months worth of money because there's a redemption penalty on the existing mortgage.
Although you could probably tell them you need less and pay it off with the cash. Not sure, it's just maths really. Best thing would be to actually work out what each approach would cost.
[Edited on 02-11-2011 by Ian]
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ste_p23
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Registered: 29th Dec 08
Location: Hindley,Wigan
User status: Offline
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quote:
Originally posted by Ian
quote:
Originally posted by ste_p23
i think to keep us both happy i may just...
Assuming that in 8 months she doesn't say I told you so when the same mortgage deals are not available, and you might not be able to retrospectively over-pay 4 months worth of money because there's a redemption penalty on the existing mortgage.
I hadnt thought of that Ian thats something for me to consider 
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Ian
Site Administrator
Registered: 28th Aug 99
Location: Liverpool
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If you're planning to pay it off anyway with the new mortgage then you need to check that anyway, just means in that case that the bulk of the loan is being paid off by your new provider but you are putting some in as cash because you've not needed it all off them.
Difficult to make a decision really without doing the maths, you have the figures for interest etc. but unless you're on a great deal, the money is better against the mortgage in most cases.
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ste_p23
Member
Registered: 29th Dec 08
Location: Hindley,Wigan
User status: Offline
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Thanks for the advice i think i will do a few figures and take my decision from there
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