£275k mortgages, £28k loans, 1 wedding and I still manage to sleep at night! Just!

warney27 · 7 January 2010 at 11:42PM

Hi All!
I am new to this, so please bear with me if I make mistakes!
I would really like to clear all my debts as quickly as possible, here is some info
I have been following money saving expert for about 2 years now and have changes over my car insurances, home insurances, broad band, phone line, electric company and have a cashback credit card. thank god for martin lewis, his team and these forums!
I also have been doing the competitions since june and have won a few things, the big prizes being a 12 year old bottle of malt whiskey (which i gave to my dad for his birthday) a eco wireless energy metre and a £500 gift voucher for Smyths toystore which I spent on xmas presents and this years birthday presents for my daughter, niece and nephews.
I am on holiday this week from work and have been watching this forum and thought i would like to try. I have worked out a budget and our expenditure is £29000 for the year, which is far to much and room for improvement. Our annual income is £40330.
Here is a bit about us, I am warney a 27 year old chef, my wife to be is a 27 year old part time care assistant/full time mummy to our 2 year old daughter who has cerebral palsy.
We have 2 houses, both interest only. the first is worth £200k with £178k mortgage , the second is worth £130k with £96.5k mortgage. the second i rent out and get £575 a month. The loans we have £19.5k with my parents which is interest free, we pay £60 and have paid off £3600. 2.4k for the sofa interest free. we have paid off £600. £5.5k for the windows and doors which we took out nearly 4 years ago, only £305.30 left to pay and £8.7k loan we have £3.3k left to pay.
We are also getting married this in May this year, but it is going to be a money saving wedding, I am trying to bring it in under £4k and we are getting £1k from each of our parents towards it.
Anyway that is all I can think of for now, any advice and tips on how I can get mortgage free as quickly as possible they will be much appreciated.
Thank you for reading
cheers
Warney27

wantabetterlife · 7 January 2010 at 11:48PM

Goodluck with all your challenges warney and wedding plans

chirpchirp · 7 January 2010 at 11:53PM

Good luck with the MFW quest. Well done with the competitions and I might just over to the competitions board if it's possible to win so much:j

dimbo61 · 8 January 2010 at 8:18AM

Make sure you apply for DLA for your daughter and also motorability
If your wife to be earns less than £96 a week she can also claim carers allowance !
You need to get your daughter statmented and get a social worker involved in her care.
Good Luck

warney27 · 8 January 2010 at 11:53AM

Thanks wantabetterlife, chirpchirp and dimbo 61. My daughter is on medium DLA and my wife to be gets carers allowance. WE also have a blue badge for our daughter. We have to reapply for the daughters DLA when she is three, and hoping we might get the higher band for mobiliity because she isn't walking. Also her portage worker is starting on getting her statemented as we speak ready for september

DIYPhil · 8 January 2010 at 2:03PM

Have you considered making a compensation claim for your CP daughter? If successful, this wouldn't directly provide funds to enable you to reduce your mortgage, but you would be able to claim care costs and this in turn may enable your wife to work more hours / full time, thus increasing your income.

warney27 · 8 January 2010 at 2:04PM

compensation claim against who?

Jonbvn · 8 January 2010 at 5:59PM

Don't forget that you will be liable for tax on the income from your second house. You can claim for mortgage interest and various items for upkeep.

The LTV on your first home is high (approx 90%). Look at overpaying that mortgage first, to reduce the LTV and possibly remortgage onto a better deal.

warney27 · 10 January 2010 at 12:27PM

Yeah thanks Jonbvn have sorted all the tax out. My first priority is reducing my large mortgage

DisgruntledGoat · 10 January 2010 at 12:51PM

Yeah thanks Jonbvn have sorted all the tax out. My first priority is reducing my large mortgage

How flexible are the IO mortgages? and what are the relative APRs compared to the 8.7k loan?

While I agree with the logic in reducing the LTV (when might you remortgage?), it may be cheaper in the long term to pay down the 8.7k loan too (plus the 300 pounds of the doors and windows loan) before focusing on the mortgage. Although LTV is important in getting a better mortgage deal, other outstanding debts are relevant too. There's even some logic to repaying the sofa loan even though it's interest free - that way you'd have no other outstanding debt, at least from the perspective of the mortgage company.

Is the £19.5k loan repayments likely to change any time? £60/pm is really a 'token payment' on that kind of amount (£3600 repaid at £60/pm implies it's been five years, so it's another 22 years at the current rate). If everyone's happy with the current situation then that's great, if it's causing any friction you might need to review how it might be repaid.

And good luck from me too!

warney27 · 10 January 2010 at 1:06PM

Hi DisgruntledGoat both mortgages are now on the standard variable rates on the £178k mortgage i am paying 2.49% and the £96.5 is on 3.75% i think. The £19.5 loan with the parents is fine, i am only really paying back on the £7500 which i had first, it was a 10 years interest free. and the £12k there is an agreement that if anything happened to me or we split it gets paid back, but otherwise it will be part of inheritance.
I am not really going to be able to remortgage the big one as i got it on a self cert and our annual income is £42k a year at the moment.
the windows and doors loan has 2 months left to pay
got 2 years left on the £8.7k loan

£275k mortgages, £28k loans, 1 wedding and I still manage to sleep at night! Just!

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