Ask the experts
About our experts...
At John Charcol, we are constantly asked for advice by borrowers on what they should do when it comes to mortgages. As such, we created this section so that you can submit your questions to our experts. The answers are provided by a number of people who have years of experience in the mortgage market. The team is led by Peter Woodward who spent his formative years as an underwriter with one of the major UK lenders and the last 10 years in our Technical Department along side Ray.
So please do submit your question and we will do all we can to answer it as quickly as possible
Please be aware that these answers can only be generic and no personal recommendations can be made.
Posted on 19/05/2008
I cant afford to make over payments but I need a mortgage where I can take payments holidays as we would like to start a family in the next few years and could not afford to pay our mortgage whilst I would only be on standard goverment maternity pay can you suggest a good company
Categories: Overpayments, Payment Holdays, underpayments, Borrowback
Posted on 14/05/2008
We have just started making overpayments on our mortgage beginning with £10,000 off, continuing with £200-£500 a month hopefully. Is it better to reduce the term or reduce the mortgage payment amount but continue paying the same? They have automatically reduced our payments so I'll just top up back to what it was. Is it better to ask for reduced term? Are there any consequences to your credit rating if you have zero mortgage or debts?
Categories: Offset mortgages, Overpayments, Payment Holdays, underpayments, Borrowback
Posted on 05/05/2008
You gave us some very good advice before. We have already been in touch with an adviser at your firm. He advised us to borrow the whole amount we need, around £150.000, with an Offset Mortgage and draw the amounts required for the staged payments, over the following 12-18 months.We feel uneasy about this and rather prefer your option to have a mortgage with a facility to withdraw further amounts at the same rate.
Are we likely to be paying more with the former option?
Categories: Offset mortgages, Overpayments, Payment Holdays, underpayments, Borrowback
Posted on 10/01/2008
Hi Katie, I have £26,000 left on my mortgage which finishes in 4 years @ £439/month. If I paid an extra £50/month when would I be mortgage free? p.s. It is a fixed rate of 5.09% approx. Many thanks, Bill
Categories: Overpayments, Payment Holdays, underpayments, Borrowback
Posted on 30/12/2007
I have recently taken out a mortgage with a fixed rate for 2 years on a repayment deal. I have an online account and can see the details of my mortgage payments. For example, paid in £740, paid out £451, which leaves £289 to be paid to my capital balance. Will the payments going out be less as the months and years go on and will my balance reduce every month? I have an option to make overpayment up to 10%. What would be the best way to make them? I'm looking at around £1500 a year. Thanks Paul.
Categories: Overpayments, Payment Holdays, underpayments, Borrowback
Posted on 20/12/2007
I'm looking to borrow more money on our house. Our house is valued at £175,000, our current mortgage £50,000 plus £28,000 on secured loan. I want to consolidate my debt. I have credit cards and want to clear them. What options do we have?
Categories: Consolidation of debts, Lower mortgage payments, Overpayments, Payment Holdays, underpayments, Borrowback, Unsecured loans
Posted on 06/12/2007
Hello Katie, Like many others I am coming to the end of a 2-year fixed rate; I have the ability to take 5 months payment holiday on the mortgage. Should I go for the payment holiday in the hope that 2-5 year fixed rates will have improved by Spring 2008?
Categories: Lower mortgage payments, Overpayments, Payment Holdays, underpayments, Borrowback
Posted on 07/11/2007
We have a joint mortgage on a 10 year term, £80,000 interest only & £53,000 on repayment total £133,000. The house is currently valued at £300,000. Our current tracker ends in Jan 2008 so we are looking to remortgage now. In July 2010 I retire & will get a lump sum of £120,000 which I intend to use to clear as much of the mortgage as possible. I need the best 2 year deal I can get. Would you advise keeping the split the same as now or upping the interest only to £100,000 and trying to overpay on the £33,000 repayment portion?
Categories: Interest only vs repayment, Overpayments, Payment Holdays, underpayments, Borrowback, Remortgaging
Posted on 02/10/2007
My son is starting his own business, could he take a "payment holiday", for say 6 months? His mortgage is with Nationwide.
Categories: Overpayments, Payment Holdays, underpayments, Borrowback
Posted on 28/09/2007
Hi Katie, complicated one for you....!
I own 2 buy to let properties, and have had enough with being a part time landlord. I have decided to sell one (I would rather keep one, as my pension!) to fund purchasing at auctions to start a career in 'flipping' properties. I will have approx £50k profit when I sell the 1st buy to let, and need to know the best way to finance the auction purchases, at a maximum purchase price of about £150k to start with (£100k loan and my own £50k). (At present, there is approx £70 equity in the 2nd buy to let).
I have been advised to use a bridging loan for the auction purchase, together with my own funds, then change the loan to a buy to let after the initial month (giving me time to renovate). The property will then be at a more affordable interest rate whilst it is up for sale. Firstly, will the buy to let mortgage lenders get wind of this, and stop lending to me if I keep redeeming their mortgages within say 4 months or so?
Secondly, I was advised to obtain a bridging loan as a second charge on my personal property (valued at £370k currently with a £93k repayment mortgage) and ‘draw down the funds’ as and when I need to make an auction purchase - again changing to a buy to let after the initial month?
The latest piece of advise I have been given, is to simply re-mortgage the family home up the maximum salary multiple of around £120k - £150K (my salary is £30k) but with a flexible/CAM mortgage that will allow me to keep my original ‘real’ mortgage of £94k, and leave the balance in the account as a credit, and use the funds to purchase at auction. Thus I will not have increased mortgage payments, until I utilize the extra funds. Upon selling the auction property, I can then repay my CAM mortgage, and again leave the extra funds in the account ready for the next purchase. Again, I am not sure how the lenders will see this, or if it is legal? Also, will I gain tax relief on the interest portion of the mortgage, as technically, the mortgage will be on my personal residence?
Please please help!
Categories: Overpayments, Payment Holdays, underpayments, Borrowback, Second properties
Posted on 01/09/2007
I have a 38k mortgage with 12k on capital and interest and the remaining 26k on interest only. It still has 7 years to run. As I'm 2/3rds through a fixed 3 year term I've been overpaying £500 a month with the aim of paying it off asap.Ive now reached the 25.7k point and my online statement says it is now interest only. Is it worth still overpaying? Will I still be paying off capital? Why have my monthly payments ceased to drop? Would I now be better off filling up an ISA? Would selling my endowment (not surrender) be an option to consider once back on a fixed term? My objective is to be mortgage free at the earliest opportunity.
Categories: Interest only vs repayment, Lower mortgage payments, Overpayments, Payment Holdays, underpayments, Borrowback
Posted on 20/08/2007
Hi, I am looking at remortgaging at the end of my fixed rate and want a flexible loan, but dont know whether to go for repayment or interest only, and overpay. The loan is for £130,000 fixed at 6.39% for 15 years with...
Categories: Interest only vs repayment, Lower mortgage payments, Overpayments, Payment Holdays, underpayments, Borrowback, Remortgaging
Posted on 20/07/2007
Should I overpay my 5 yr fixed mortgage by £100 p/month, or save it in a cash ISA, then borrow £6K (+ interest) less when I re-mortgage in 5 years time. My mortgage is for £144, 000 at 6.19%?
Categories: Overpayments, Payment Holdays, underpayments, Borrowback, Remortgaging
Answers provided in response to Ask the experts are based on the information provided and do not constitute advice under the Financial Services & Markets Act. They reflect the personal views of the authors and do not neccessarily represent the views, positions, strategies or opinions of John Charcol. All comments are made in good faith, and John Charcol will not accept liability for them.
We recommend you seek professional advice with regard to any of these topics where appropriate.