mortgage help

[crystal07]

Iknow this will sound really bad but i really need an idiots guide to an interest only mortgage. i currently have an interest only mortgage for half the value of my house, how do i start paying the mortgage off and not just the interest, i am on a great rate. i just cant figure these things out. i have spoken to adviser and he suggested paying any extra money i have each month towards the mortgae but doesnt that mean i am just paying the interest and not paying to make the house freehold. any advice appreciated.

Depending on the terms of your mortgage if you over pay on your mortgage it should mean you start paying the capital as well as the interest, alternatively you can save money elsewhere for example in an ISA.

What is best for you depends on your own situation, your advisor should have explained it better, can you go back?

Is the advisor working for the lender? If not, and if you're not finding your advisor helpful, I'd suggest contacting your mortgage lender directly. My lender, for example, sent me a form to complete when I wanted to pay off a lump sum. On the same form was an option to regularly overpay each month. They may suggest converting your mortage to a capital repayment type. You could possibly shorten the term of the mortgage and/or get a better rate of interest. It may even be a good idea to think about switching to another lender. Who is your current lender?

Do you have the same interest rate for each ?half? of your mortgage?

Do you know the balance that you have on the interest only half of your mortgage and also the current balance on your ?repayment? half? (ie the half that you pay capital and interest on).

You can phone you lender for a balance or check you last statement.

I wouldn?t rush in until you have checked your paper work.

I will need to contact the lender directly I think, my current lender is RBS. Thanks for the help its a little clearer.

Yes... freehold and leasehold are different. My house is freehold, I own the land it sits on as well and all but 10% of the house, which is still mortgaged. My parents' house is leasehold (99 years). They own the bricks and mortar outright but have to pay chief rent, ground rent and abide by some very daft (IMHO) occupancy rules stipulated by the developer. If/when they come to sell, the new owner would get the house as a new 99 year leasehold.