It can make a significant difference if you do overpay your mortgage even if it is in small increments as well as the interest you pay back during your mortgage. The quicker you begin paying this, the sooner these extra payments can take effect.
As a First Time Buyer in York, you may be aware of the difference when you overpaying your mortgage and the impact it can have on interest when you pay it back regardless of whether you are only over by small amounts. The reason why overpaying early can be better is because the extra payments have a longer period to take effect.
In some cases, homeowners may not be able to make these extra payments but you could say that many decide not to overpay as they would instead use the remaining money on something more interesting and exciting!
With this in mind, we suggest you arrange a standing order payable to your lender each month. It would be wise if you do organise this standing order to go out on the same date as your standard mortgage repayment, this additional payment will hopefully start to feel a part of your standard mortgage payment.
The advantage of going for a standing order is that, instead of a direct debit, you are able to manage this, not the receiver. Therefore, if you have a financial emergency you can easily log into your online banking and cancel the standing order as this doesn’t go out the next month. As much as it’s not the best to stop overpaying, you still will be able to benefit from the overpayments make up until that point.
Getting into the routine of overpaying your mortgage is a great habit, the amount you overpay doesn’t have to be a large amount, however, you’ll be happy when you are at the end of your mortgage repayments and find you have taken off a year or two.
Sometimes, lenders will allow you to make reduced mortgage repayments or take a payment holiday if you provide evidence of a history of overpaying. Prior to taking a payment break, however, it’s key that you check with your lender that you are eligible. If you don’t, this could mean you end up with a negative mark on your credit report and this is something you should strive to avoid.
If you are looking to overpay your mortgage, you should speak to your mortgage lender to see if this is doable.
Another option for people who have already been overpaying and are seeking Remortgage Advice in York ahead of releasing their equity to remortgage onto a better deal, take advantage of our free remortgage review. Here at Yorkmoneyman, a designated Remortgage Advisor in York.