House buying, mortgages, insurance, etc

[PWL]

Anyone using Christiano Ronaldo as their avatar on P&B is clearly a bot before they have even posted and deserve the ban hammer. 

[Abdul_Latif]

Currently in the market for a solicitor to do the conveyancing / legals for a purchase and disposal of existing property.

Had a couple of quotes and they are wildly different! Some much more competitive than others.

Any recommendations from those recently in the same situation who is coming in cheapest?

[alta-pete]

2 minutes ago, Abdul_Latif said:

Currently in the market for a solicitor to do the conveyancing / legals for a purchase and disposal of existing property.

Had a couple of quotes and they are wildly different! Some much more competitive than others.

Any recommendations from those recently in the same situation who is coming in cheapest?

Shouldn’t be a complicated job but you do get what you pay for. I used Karen: 

https://m.facebook.com/profile.php?id=100047698975764

[Abdul_Latif]

15 minutes ago, alta-pete said:

Shouldn’t be a complicated job but you do get what you pay for. I used Karen: 

https://m.facebook.com/profile.php?id=100047698975764

Cheers - I’ll give her a shout for a quote. Ideally looking to keep the whole thing excluding LBTT under £2,500.

[vikingTON]

1 hour ago, Abdul_Latif said:

Cheers - I’ll give her a shout for a quote. Ideally looking to keep the whole thing excluding LBTT under £2,500.

I used Bradley Campbell and Co.  for a glorious Clyde Riviera purchase and the total bill was £1125. No idea whether the selling side involves higher costs though. 

 

[strichener]

On 19/11/2022 at 08:15, virginton said:

I used Bradley Campbell and Co.  for a glorious Clyde Riviera purchase and the total bill was £1125. No idea whether the selling side involves higher costs though. 

 

£1125 including the actual purchase cost. 

[TxRover]

4 hours ago, coletsiona said:

Income protection is a type of insurance that replaces a portion of your income if you are unable to work due to an illness or injury.

The usual tricks involved are the exclusion period (how long after buying the policy it is fully in force), the eligibility period (how long you must have a reduction or cessation of pay before payments start…long period, cheaper policy), and the benefits percentage and cap (how much they will pay, as a percentage of your insured income, and how much in total  they will ever pay). It can be useful, mainly in fields that require meeting medical standards or where injury is somewhat common.

[Hedgecutter]

Mortgages: is there a minimum balance amount that you can have sitting around long term, let's say £100, resulting in monthly payments of <£10pm?  Or does one hit a point when your 5 year fixed deal comes to an end and you're not worth playing with anymore?

At my current rate of overpaying, a balance could be down to £0 within 4 years, but with a whopping 15 years of the term still remaining.  Is this a nice but daft situation to be in?

This has come about because I've always paid the same meaty overall monthly lump, but with a default preference that the monthly charge is recalculated and reduced rather than the term length.  Therefore, because of my same lump payments, the overpayment amount has increased every month (still within allowed limits), which has seriously eaten away at the amount owed.

Should I be changing to a reduced term option, or is there little point now if the amount that's going to be in the account for so long would be miniscule for so long?

Edited April 27, 2023 by Hedgecutter

[craigkillie]

This doesn't answer your question, but why didn't you just ask for the term to be reduced, since that's basically what you've done in overpayments anyway? I don't see the benefit to you in doing what you've done - you haven't lost out either but it seems strange to ask for the monthly charge to be recalculated, only to ignore it anyway.

I assume they will still offer you a new fix at the end of the current one even if you have next to nothing left to pay, but I haven't been in that situation.

[Hedgecutter]

29 minutes ago, craigkillie said:

This doesn't answer your question, but why didn't you just ask for the term to be reduced, since that's basically what you've done in overpayments anyway? I don't see the benefit to you in doing what you've done - you haven't lost out either but it seems strange to ask for the monthly charge to be recalculated, only to ignore it anyway.

I assume they will still offer you a new fix at the end of the current one even if you have next to nothing left to pay, but I haven't been in that situation.

Simple answer is that I'm ignorant idiot who's been going with the default option.

Eta: That could be in part a lie. I have a vague memory of a conversation about reducing the essential part p/m so that it would still be affordable in the event of another redundancy (or a Liz Truss f***ing up the interest rates ).

Maybe opting to pay a small monthly amount with optional overpayments whenever affordable over 20 years, versus tied into moderate (potentially jumping to high next year) amount for 10-15 years.  Something like that.

Edited April 27, 2023 by Hedgecutter

[craigkillie]

It is possible. My provider said it would be possible to re-extend our term if we needed to reduce our payments, but that might not be the case for all.

[Gnash]

1 hour ago, Hedgecutter said:

Mortgages: is there a minimum balance amount that you can have sitting around long term, let's say £100, resulting in monthly payments of <£10pm?  Or does one hit a point when your 5 year fixed deal comes to an end and you're not worth playing with anymore?

At my current rate of overpaying, a balance could be down to £0 within 4 years, but with a whopping 15 years of the term still remaining.  Is this a nice but daft situation to be in?

This has come about because I've always paid the same meaty overall monthly lump, but with a default preference that the monthly charge is recalculated and reduced rather than the term length.  Therefore, because of my same lump payments, the overpayment amount has increased every month (still within allowed limits), which has seriously eaten away at the amount owed.

Should I be changing to a reduced term option, or is there little point now if the amount that's going to be in the account for so long would be miniscule for so long?

If you reduce the balance to zero the mortgage is redeemed and you no longer have a mortgage to make payments on.  I think it's possible you could make an overpayment to bring the mortgage to £100, keep the same term and hence make payments of less than £1.  Not really sure what the point of that would be, other than pissing off your lender.

To the other point about making lump sum overpayments rather than reducing the term and making higher monthly payments, there are definitely good reasons for doing the former. 

It gives you the flexibility over the amount and timing of the payments, making it easier to deal with life events that come up.  It makes the mortgage technically more affordable, meaning you could (if needed) borrow a higher amount.  Also, although this is unlikely to be a factor any more, you could borrow more money for longer at a lower interest rate than you are able to get in savings interest.  Around 18 months ago, some people were able to borrow at less than 1%, and within a year could get fixed term savings at more than 5%.

[Molotov]

It used to be an option to leave £1 on your mortgage so that the lender looked after your deeds rather than safely store paper copies at home.

No longer an issue these days.

[Molotov]

2 hours ago, Hedgecutter said:

 

At my current rate of overpaying, a balance could be down to £0 within 4 years, but with a whopping 15 years of the term still remaining.  Is this a nice but daft situation to be in?

 

Outstanding job! 

My advice would be pay the remaining amount off completely.

You are in a small minority of the population to pay off so quickly. 

Once you have done that start to divert the money to boosting your pensions or isa.

Years ago (2006) I negotiated a tracker mortgage at 0.19% above base rate so rather than overpaying massively when the banking crisis kicked in 2008 we diverted our money to our pensions as we are in the high rate tax bracket it was a great boost!

Now we can extract 25% tax fee from pension that HMRC have helped to fund.
We are essentially mortgage free but the last 12 months it’s starting to look like we just kill the remainder off. 

I feel for those people who have taken our large mortgages and not realised the consequences of high interest rates. 

But we were born in the 60s and saw the impact of 16% interest rates in the 80s. 

There must be some horror stories in and around London.

 

[Todd_is_God]

2 hours ago, Hedgecutter said:

At my current rate of overpaying, a balance could be down to £0 within 4 years, but with a whopping 15 years of the term still remaining.  Is this a nice but daft situation to be in?

Do they not have a limit of how much you can overpay in a year (often 10% of the balance remaining at the start of the year?) meaning you'll not be able to overpay by as much as you are now until the balance reaches zero?

 

[TxRover]

3 hours ago, Hedgecutter said:

Mortgages: is there a minimum balance amount that you can have sitting around long term, let's say £100, resulting in monthly payments of <£10pm?  Or does one hit a point when your 5 year fixed deal comes to an end and you're not worth playing with anymore?

At my current rate of overpaying, a balance could be down to £0 within 4 years, but with a whopping 15 years of the term still remaining.  Is this a nice but daft situation to be in?

This has come about because I've always paid the same meaty overall monthly lump, but with a default preference that the monthly charge is recalculated and reduced rather than the term length.  Therefore, because of my same lump payments, the overpayment amount has increased every month (still within allowed limits), which has seriously eaten away at the amount owed.

Should I be changing to a reduced term option, or is there little point now if the amount that's going to be in the account for so long would be miniscule for so long?

If this question came up before you bulldozed your mortgage balance, the trick would be determining your likely rate of return for funds versus your mortgage interest rate. Basically, if you can get a higher return on funds than the mortgage rate, it is advantageous to divert the extra funds to the higher rate rather than prepay the mortgage…with the assumption that your mortgage will be paid in full at the end of the current fixed mortgage rate term.

Now at a low/very low balance, the “advantage” of getting more in return for your funds than prepaying the mortgage is likely very small, versus the assurance of having the mortgage completely paid off. You have to ask yourself if it worth the worry of are they recalculating correctly, will they screw up and forget something, will they find a way to hose me? As noted above, the only “advantage” of them keeping the deed is effectively dead.

As is suggested above, zero that puppy out is a solid choice, but if it is four years of future “big chunk” payments, you could consider if the return in your pension/isa is assured to be above the effective rate of return for prepaying the remainder. If that return is variable, I’d say pay it off…if your plan offers a fixed return over the (fixed) mortgage rate, you can effectively get free money by delaying the payoff.

[Hedgecutter]

1 hour ago, Todd_is_God said:

Do they not have a limit of how much you can overpay in a year (often 10% of the balance remaining at the start of the year?) meaning you'll not be able to overpay by as much as you are now until the balance reaches zero?

 

Thankfully the overpayment limit is 10% of the original loan amount, not of the outstanding balance.

Had I taken it out a month earlier then I'd have been far more limited. 

[Todd_is_God]

1 minute ago, Hedgecutter said:

Thankfully the overpayment limit is 10% of the original loan amount, not of the outstanding balance.

Had I taken it out a month earlier then I'd have been far more limited. 

Nice one. I assume there are no early repayment charges for repaying the loan early?

[Hedgecutter]

1 hour ago, Todd_is_God said:

Nice one. I assume there are no early repayment charges for repaying the loan early?

Unfortunately, ERCs are indeed still a thing.   

Eta: ended up phoning my lender* and they just write off the remaining term for nothing if the balance hits zero through means in which you've kept within their 10% OP limits.  Others may differ of course.

*Thought I'd ask the masses first instead of trusting the lender to tell me the best way to minimise the amount they get from me!

 

4 hours ago, Gnash said:

To the other point about making lump sum overpayments rather than reducing the term and making higher monthly payments, there are definitely good reasons for doing the former. 

Perhaps I worded it badly but I'm specifically interested in how the overpayments affect the term (the date of which might get recalculated each month depending on whatever gets paid in), as opposed to asking to change the overall product to a 15yr one rather than a 20yr one (if that makes any sense?).

Eta:  seems that the term-change overpayment preference is a waste of time if one can simply get out of the mortgage agreement only halfway through the term (see edit above) anyway.  If anything, I'd just be pointlessly committing to monthly payments higher than they need to be, for no real reward.

Edited April 27, 2023 by Hedgecutter

[Gnash]

1 hour ago, Hedgecutter said:

Perhaps I worded it badly but I'm specifically interested in how the overpayments affect the term (the date of which might get recalculated each month depending on whatever gets paid in), as opposed to asking to change the overall product to a 15yr one rather than a 20yr one (if that makes any sense?).

Eta:  seems that the term-change overpayment preference is a waste of time if one can simply get out of the mortgage agreement only halfway through the term (see edit above) anyway.  If anything, I'd just be pointlessly committing to monthly payments higher than they need to be, for no real reward.

Whether overpayments affect the term or monthly payments is up to you (at least with some lenders).  Your lender probably has an online overpayment calculator.  But you're right that if you choose to reduce the term, that's doesn't mean you're taking a new product, just that you'll pay the mortgage off before the term ends. 

Agree with your second point, and linked to that it's worth saying that the early repayment charges only apply during the deal / discount period - otherwise you would see virtually no re-mortgaging.