Trouble with making overpayments on mortgage

averagejoe123

mirrorwall14 wrote: »

Got a callback all ok thank god. Repayments are coming off the principal and term has reduced. Currently if we continue on track we’ll take over ten years off the term but we can always revert to the original term should we wish to and the repayment would be lower. If we reverted now we’ve already taken 60e off the monthly repayment

Edit OP I’ve no idea why you are having hassle overpaying. We’ve had no issues with overpaying haven. Just made one written request to increase the DD and have the overpayment amount be taken off the principle

The part about reverting to the original term at any stage isn't standard practice but if you have it in writing happy days.

mirrorwall14

averagejoe123 wrote: »

The part about reverting to the original term at any stage isn't standard practice but if you have it in writing happy days.

No, over the phone. Should I get it in writing??

averagejoe123

mirrorwall14 wrote: »

No, over the phone. Should I get it in writing??

I would be asking for it in writing as with most banks you will have a lot of difficulties making changes to a mortgage if you run into financial problems. My earlier argument is that you will not have these issues if you reduce the principal rather than the term.

Diemos

mirrorwall14 wrote: »

However as I just replied there, they seem to be very confused as to what’s happening without our mortgage when we rang today.

That sounds far more like them.
Perpare to be told 10 different things by 10 different people.

We sent in a letter and nothing happened.

Diemos

mirrorwall14 wrote: »

Got a callback all ok thank god. Repayments are coming off the principal and term has reduced. Currently if we continue on track we’ll take over ten years off the term but we can always revert to the original term should we wish to and the repayment would be lower. If we reverted now we’ve already taken 60e off the monthly repayment

Edit OP I’ve no idea why you are having hassle overpaying. We’ve had no issues with overpaying haven. Just made one written request to increase the DD and have the overpayment amount be taken off the principle

Get that in writing, we were told numerous things we wanted to hear over the phone, only to be denied in the next call. Even by the same perosn in one case.

We've been told what you are doing is impossible. No DD.
That every time we make a payment,it will have to be accompanied by a letter of intent, otherwise the payment will simply sit in our account as credit.

mirrorwall14

Diemos wrote: »

Get that in writing, we were told numerous things we wanted to hear over the phone, only to be denied in the next call. Even by the same perosn in one case.

We've been told what you are doing is impossible. No DD.
That every time we make a payment,it will have to be accompanied by a letter of intent, otherwise the payment will simply sit in our account as credit.

Ok that’s nuts. We definitely have the DD running correctly and I have the letter they sent with the reduction in term that will happen due to the increased monthly DD payment. My only concern based on the above is that they wouldn’t let us switch back to the original term and decrease the monthly payment accordingly in the event of an issue.

To be honest though if the worst came to the worst and the **** hit the fan I can’t see a judge allowing them to evict us rather than go back to the original term and reduce the monthly payment. Particularly since we have specifically been over paying due to the life insurance situation and informed them we would be before we even drew down the mortgage

GingerLily

mirrorwall14 wrote: »

To be honest though if the worst came to the worst and the **** hit the fan I can’t see a judge allowing them to evict us rather than go back to the original term and reduce the monthly payment. Particularly since we have specifically been over paying due to the life insurance situation and informed them we would be before we even drew down the mortgage

Do you want to have to go to court and ruin your credit rating?

The advise here is to help you avoid arrears so you don't ruin your chances going forward for future credit.

You would have no legal right to your original term anyway once you altered your contract, the bank essentially will need up reissue the loan if you want to extend the term, it's easy to shorten a mortgage, difficult to lengthen.

I would personally pay off the term as it means less money is paid in interest, I took the longest term possible on my mortgage with that in mind.

sunnyday1234

GingerLily wrote: »

mirrorwall14 wrote: »

To be honest though if the worst came to the worst and the **** hit the fan I can’t see a judge allowing them to evict us rather than go back to the original term and reduce the monthly payment. Particularly since we have specifically been over paying due to the life insurance situation and informed them we would be before we even drew down the mortgage

Do you want to have to go to court and ruin your credit rating?

The advise here is to help you avoid arrears so you don't ruin your chances going forward for future credit.

You would have no legal right to your original term anyway once you altered your contract, the bank essentially will need up reissue the loan if you want to extend the term, it's easy to shorten a mortgage, difficult to lengthen.

I would personally pay off the term as it means less money is paid in interest, I took the longest term possible on my mortgage with that in mind.

Yes yes yes, its much better to leave the term long in and payments reduced in case you run into financial hardship down the road. We have brought out monthly payments down from around several hundred euro but left the term the same. This has given us the luxury of one person being able to pay the mortgage if needed... its a lot of pressure off your back

mirrorwall14

GingerLily wrote: »

Do you want to have to go to court and ruin your credit rating?

The advise here is to help you avoid arrears so you don't ruin your chances going forward for future credit.

You would have no legal right to your original term anyway once you altered your contract, the bank essentially will need up reissue the loan if you want to extend the term, it's easy to shorten a mortgage, difficult to lengthen.

I would personally pay off the term as it means less money is paid in interest, I took the longest term possible on my mortgage with that in mind.

Of course not? I already said I’m getting it in writing from them. The aim was never for us to reduce our term (and lose the original length) for obvious reasons and they have told us multiple times that that’s fine including before drawdown. We did not request the term be reduced. The OP has had a totally different experience with the same bank, hence the confusion. I’ll see what they come back with in the letter

mirrorwall14

sunnyday1234 wrote: »

Yes yes yes, its much better to leave the term long in and payments reduced in case you run into financial hardship down the road. We have brought out monthly payments down from around several hundred euro but left the term the same. This has given us the luxury of one person being able to pay the mortgage if needed... its a lot of pressure off your back

This is what we want to do. We have been assured that we can and are doing it. The repayments are already down by 60e a month apparently

Overpaying reduces the term regardless of the option you choose though so I don’t think the wording of “reduce payment” and “reduce term” make it very clear.

If you chose the “reduced payment” option and are overpaying continually the term will reduce to the same level as if you were overpaying and opted for the “reducing term”.

If you drop back to your original payment on a “reduced payment” mortgage the term reverts to a longer term (which will be determined by how much was over paid but still shorter than the origainl term) while the length of the term of a “reduced term” overpayment will be the same term as the term that the “reduced payment” mortgage reverts to except that’s now the max term.

The biggest difference, and it could be a very important one, is that on the “reduced payment” type your can drop to a payment lower than your original mortgage payment if you run into trouble (and the term will extend out back to your origainl term) and this could be very helpful while on a reduced term your origainal repayment is your minimum.

Now for most people they will never drop below the original payment so calling it a “reduced payment” option really doesn’t make it clear that it’s the same as the other option really with an added extra.

This is my understanding of how it works anyway and the “reduced payment” option is by far the better option.

thelastpogue

Diemos wrote: »

Get that in writing, we were told numerous things we wanted to hear over the phone, only to be denied in the next call. Even by the same perosn in one case.

We've been told what you are doing is impossible. No DD.
That every time we make a payment,it will have to be accompanied by a letter of intent, otherwise the payment will simply sit in our account as credit.

"Unfortunately Haven accounts do not have the facility to make electronic transfers into them.
In order to make any additional payments or lump sum payments, you would need to post in either a bank draft or cheque to our head office, Haven, No 2 Burlington Road, Dublin 4.
You will need to include a written instruction with this explaining what you want to do, including your account number & signed by all parties on the loan"

I was told the same as this when I asked about how to make overpayments with Haven, above is what they told me. They are an AIB subsidiary, don't know why they can't let me associate my mortgage account with my AIB online bank account and let me make internet transfer. A cheque with a letter is crazy in this day and age!

Have you any idea how long it takes the cheque and payment to be made off of your account? And do they send anything to acknowledge what they have actually done?

Padkir

TheChizler wrote: »

Is it possible to split it between fixed and variable, and make the overpayments towards the variable portion?

Yes. That's exactly what we are doing and it is working well.

jayjay2010

I contacted PTSB who confirmed that overpayments CAN be made, but nobody seems to know where the money goes when the overpayments are made. I just noticed on their website through a PDF sheet that overpayments will build up as a credit. What's the point in that?

Does anybody have a mortgage with PTSB and making overpayments, if so where does the money go?

Last thing I want to do is make regular overpayments for the money to just sit there doing nothing....

sunnyday1234

jayjay2010 wrote: »

I contacted PTSB who confirmed that overpayments CAN be made, but nobody seems to know where the money goes when the overpayments are made. I just noticed on their website through a PDF sheet that overpayments will build up as a credit. What's the point in that?

Does anybody have a mortgage with PTSB and making overpayments, if so where does the money go?

Last thing I want to do is make regular overpayments for the money to just sit there doing nothing....

Honestly, listening to this absolute nonsense that people are being told by banks makes me want to recommend moving your mortgage to AIB. They are superb to deal with and i have never ever had an issue with them with multiple mortgages

vmb

Diemos wrote: »

Get that in writing, we were told numerous things we wanted to hear over the phone, only to be denied in the next call. Even by the same perosn in one case.

We've been told what you are doing is impossible. No DD.
That every time we make a payment,it will have to be accompanied by a letter of intent, otherwise the payment will simply sit in our account as credit.

I have a Haven mortgage, overpaying a lot of money per month from day one.

We only needed to request it to the broker - we want to overpay every single month. Instead of doing regular overpayments, we changed the amount to be paid.

We could revert the payments to the original amount if needed at any time, and we do not have to worry about sending the overpayment requests every single month.

I couldn't be happier about this decission, we've reduced the interest about 120k and we'll finish the mortgage in 2021 instead of 2045! Our overpayment is very high, but even a small overpayment could make a great difference, specially if you start early

mirrorwall14

vmb wrote: »

I have a Haven mortgage, overpaying a lot of money per month from day one.

We only needed to request it to the broker - we want to overpay every single month. Instead of doing regular overpayments, we changed the amount to be paid.

We could revert the payments to the original amount if needed at any time, and we do not have to worry about sending the overpayment requests every single month.

I couldn't be happier about this decission, we've reduced the interest about 120k and we'll finish the mortgage in 2021 instead of 2045! Our overpayment is very high, but even a small overpayment could make a great difference, specially if you start early

Not just me then thank God. Our mortgage was set up with a broker too but we sent the higher DD letter with Haven themselves

runawaybishop

jayjay2010 wrote: »

I contacted PTSB who confirmed that overpayments CAN be made, but nobody seems to know where the money goes when the overpayments are made. I just noticed on their website through a PDF sheet that overpayments will build up as a credit. What's the point in that?

Does anybody have a mortgage with PTSB and making overpayments, if so where does the money go?

Last thing I want to do is make regular overpayments for the money to just sit there doing nothing....

The money will sit there unless you write to them and request the money is taken off the principle.

Diemos

thelastpogue wrote: »

"Unfortunately Haven accounts do not have the facility to make electronic transfers into them.
In order to make any additional payments or lump sum payments, you would need to post in either a bank draft or cheque to our head office, Haven, No 2 Burlington Road, Dublin 4.
You will need to include a written instruction with this explaining what you want to do, including your account number & signed by all parties on the loan"

I was told the same as this when I asked about how to make overpayments with Haven, above is what they told me. They are an AIB subsidiary, don't know why they can't let me associate my mortgage account with my AIB online bank account and let me make internet transfer. A cheque with a letter is crazy in this day and age!

Have you any idea how long it takes the cheque and payment to be made off of your account? And do they send anything to acknowledge what they have actually done?

That was the same info I got.
Even thought your Loan account number is the account part of your IBAN therefore must be unique to you.

It took us over 2 months from the date they recieved it.
Yes, once they have processed it, they send you a letter.

fatbhoy

averagejoe123 wrote: »

...

You would be better off asking your bank to allocate the overpayments off the capital and not the term. It will vary by bank by bank as to how easy/difficult this is. I am with AIB and it couldn't be easier.

...

So how exactly do you get them to take your overpayment off the principle?

I'm with AIB; I do overpayments; they offer two types: to reduce term, or to reduce monthly payment. I wanted to get them to take my overpayment off the principle (i.e. the capital), but those were the only two options they gave me, and they were very vague about paying off the principle and not the interest part.

They instructed me to do this:
- Transfer the overpayment amount into the mortgage account
- Then send letter/email to them saying that I want it to be used to reduce the term. If I didn't send the letter, the default is to leave the term as is and reduce the monthly payment.

Either way, it appears to me that the overpayment is being used to reduce the principle and the interest.