Would it be wise to pay your ssia money into your mortgage?

M

macker

Guest
i was wondering would it be wise to pay your ssia money into your mortgage?, does anyone have any opinions on this please.
 
Re: ssia money and mortgages?

You would need to look at your overall financial position before deciding.
Factors would be:-
  • Do you have outstanding debts that are costing you more than the mortgage rate eg credit card, car loan, personal loan?
  • Do you have money set aside for emergencies\rainyday?
  • Have you got a pension?
If all these areas are covered, then you could look at paying it off your mortgage, but then you would need to look at the terms & conditions of it. If its fixed rate, for example, there may be a penalty for doing so.
 
Re: ssia money and mortgages?

I was going to do same. We have a tracker mortgage with ICS.
 
Re: ssia money and mortgages?

Can I also include a question that is related to this topic?

As people will not be paying in to the SSAI once it matures would it be a good idea to start overpaying the mortgage by the SSAI amount (€254 per month) used to not having it so shouldn't be a problem?
 
Re: ssia money and mortgages?

J... said:
Can I also include a question that is related to this topic?

As people will not be paying in to the SSAI once it matures would it be a good idea to start overpaying the mortgage by the SSAI amount (€254 per month) used to not having it so shouldn't be a problem?
Click to expand...

Yes without a doubt, I recently increased my mortgage payments by 160.00 and knocked 6 years off my mortgage term, I plan on incresing my mortgage amount when the time comes, however as Berni said, you should firstly get rid of any short term debts and make sure you have a good emergency fund set aside i.e. 3-6 months income, before you add to your mortgage.
 
variable rate mortgage - can i just increase the payments myself into the mortgage account? what, just ring/write to the bank and ask them to up the direct debit? if anything unforseen occured, no problem putting the payments back down to what they were in the first place?

thanks a mil.
 
Most lenders will allow you to increase (and subsequently decrease at least to the "normal" repayment level) repayments on a variable/tracker rate mortgage. They certainly cannot charge owner occupier mortgage borrowers a fee for this. It's best to notify them of any change rather than just lodging more than normal (in fact since most repayments will be by direct debit you will have to tell them anyway). Also make sure that they know that the overpayments are to be used as accelerated capital repayments and not simply held "on deposit" in the mortgage account but not paid off against the capital outstanding.
 
thanks very much.

dont want to push my luck here with the questions, but if i get a bit of overtime every now and again (which i do), if i use my internet banking to transfer the extra sheckles into the mortgage account, presumably it would sit on deposit, as you say (this is a new concept to me, i will search through the previous threads now) - could i give the bank an instruction that any extra money that ever finds its way into the mortgage account is to be used to reduce the loan amount?

thanks again. much appreciated.
 
You may find that your bank may well gratefully accept your money but magically not end up reducing your interest charges. You need to check with your bank on what exactly will happen. I think this kind of variable mortgage payment will not necessarily work for you. I tried this myself a few years ago and found that the extra payment totally screwed everything up to the extent that the bank's computer system thought the mortgage payment had been made and the normal direct debit was not taken out in time - leading to increased interest charges to me.

Bottom line: talk to your bank manager.
 
Bottom line - put your instructions in writing to your lender making it clear that you want any additional lump sum or regular accelerate repayments to be used to reduce the outstanding capital balance immediately if that is your intention! I did this in the past and, through a few lump sum and regular capital repayments and no hardship since the money was not earmarked for any other use, accelerated the repayment of the mortgage from the original 20 year term to less than 7.
 
thanks folks. will talk to the bank and subsequently set out anything agreed in writing to them.
 
To be fair I was younger and a little more innocent then that I am now and gave the instructions verbally to the EBS and they did the right thing. However if I was to do it again I would put the instructions in writing just to avoid any confusion. Over the years I've learned that in many contexts it's often best to put things formally in writing to make sure that they are attended to.
 
BTW, did paying off the mortgage in seven years envolve any murky dealings with any pablo escobar types?!

just did the maths myself - if i didn't have to pay any tax, buy food or pay for anything, it would take me six years to pay off my mortgage, based on my current wages!!
 
No dodgy dealings. The mortgage was IR£40K/20 years on a IR£63K property in 1995 - albeit initially at around 7%+ (tell the young people these days that rates were once that high and blah, blah, blah...) so the repayments were around IR£300. I was able to afford to up these to accelerate the repayment of the loan and I had An Post Bonds/Certs earning relatively high rates at the time which matured and allowed me to make lump sum repayments after which keeping the repayments at the pre capital lump sum repayment level accelerated things even further. I eventually cleared the loan IR£13K in savings that I had no other use for at the time. And then I was promptly made redundant and was unemployed for a few months. :D
 
my old man tells me he once paid something like 17% on his mortgage, while paying nearly 60 pence in the pound on tax!! all the while someone was wearing charvet shirts! i've gone off the topic, i'll say no more.

thanks again for the advice.
 
I wasn't earning or paying a mortgage at the time but I too can recall the days of double digit interest rates and top rate income tax of 60%+ (62% or 65%?). I remember a friend fixing his mortgage at c. 18% at the time rates were peaking during the currency crisis of the late 80s.
 
at the risk of beating the same drum too often or sounding like a First Active salesman (I'm not),

with the Current Account Mortgage (or NIB offset - I gather) you can put all your money into the current account where it effectively offsets against your mortgage (i.e. reduces your interest charge) but the beauty of it is that you still have access to to the cash as an emergency fund - call it instant equity release.

Put another way I'd need an interest rate of 4.48% before DIRT before it would make sense to put my cash elsewhere.

Am only making payments on the "net" mortgage so not paying off early under a structured method but the theory is to keep building up the current account so the it meets the loan account (on its way down) somewhere in the middle (and hopefully well short of the normal mortgage term). This method of early payment doesnt incur more interest but it does have the minor cost of needing level term life assurance as, in theory, you could extract every penny from current account.

So in summary will put all SSIA in current account until can think of something better to do with it (if at all!).
 
Other people have mentioned this fact, but be absolutely sure that you put all correspondence in writing about making deposits/capital payments against your mortgage, stating clearly (i) if you want to make a deposit against insterest or you want to capitalise your payment and (ii) if you want to reduce your monthly repayments or reduce your mortgage term.

I have made both "deposit" payments and payments against capital and my mortgage provider (First Active) has consistently made mistakes in carrying out my clearly stated wishes. Out of a period of probably 18 months during which I have made about 6 "out of the ordinary" extra mortgage payments, they have mucked up each and every time.

(fyi, their "muck-ups" included capitalising an amount when I expressly told them not to, then uncapitalising it when I found out the mistake and then *recapitalising* of their own accord for no particular reason - all leading to them telling me that I didn't have enough funds in my account when I asked for a withdrawal to pay my tax bill (or, should I say, them not sending me the cheque, but not actually telling me that they weren't going to send me a cheque until I rang them directly) - all of *that* leading to them finally admitting that I did in fact have the funds but then sending my significant cheque by courier to the *wrong* address (again, not telling me that they were sending the chqeue at all and not telling me that someone else (i.e. not me) had signed for it (even though they were aware of this fact). I have never gotten any explanation of what the affect all of this capitalising/uncapitalising/recapitalising/uncapitalising had on my mortgage interest calculations - you need to be able to trust that your mortgage provider is charging you the right amount.)

This may be particular to First Active Customer Service, but I would definitely advise putting any correspondence in writing and making it so clear that there is no room for misunderstanding.

p.s. I am changing mortgage provider once my fixed rate mortgage expires in March!
 
WaterSprite said:
Other people have mentioned this fact, but be absolutely sure that you put all correspondence in writing about making deposits/capital payments against your mortgage, stating clearly (i) if you want to make a deposit against insterest or you want to capitalise your payment and (ii) if you want to reduce your monthly repayments or reduce your mortgage term.

I have made both "deposit" payments and payments against capital and my mortgage provider (First Active) has consistently made mistakes in carrying out my clearly stated wishes. Out of a period of probably 18 months during which I have made about 6 "out of the ordinary" extra mortgage payments, they have mucked up each and every time.

(fyi, their "muck-ups" included capitalising an amount when I expressly told them not to, then uncapitalising it when I found out the mistake and then *recapitalising* of their own accord for no particular reason - all leading to them telling me that I didn't have enough funds in my account when I asked for a withdrawal to pay my tax bill (or, should I say, them not sending me the cheque, but not actually telling me that they weren't going to send me a cheque until I rang them directly) - all of *that* leading to them finally admitting that I did in fact have the funds but then sending my significant cheque by courier to the *wrong* address (again, not telling me that they were sending the chqeue at all and not telling me that someone else (i.e. not me) had signed for it (even though they were aware of this fact). I have never gotten any explanation of what the affect all of this capitalising/uncapitalising/recapitalising/uncapitalising had on my mortgage interest calculations - you need to be able to trust that your mortgage provider is charging you the right amount.)

This may be particular to First Active Customer Service, but I would definitely advise putting any correspondence in writing and making it so clear that there is no room for misunderstanding.

p.s. I am changing mortgage provider once my fixed rate mortgage expires in March!
Click to expand...

Watersprite
I had a very similar experience with my mortgage provider (not First Active). After fruitless complaining and letter writing to their customer service team I finally lodged a formal complaint with the Ombudsman and won. It took more than 3 months to get a decision but the end result meant that I could finally "let go" of the anger and annoyance their crap service had caused me, so I would urge you not to let this go unchecked. I now put every single instruction in writing to head office- I won't be screwed again!
 
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