Mortgage Free Mini-Goals

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  • coxj2901
    coxj2901 Posts: 207 Forumite
    Hi MrsP,

    I've just read all of your thread and wanted to say well done on your progress so far. Your diary is an enjoyable read and I'll be sure to subscribe to follow your progress. I'm from Shropshire too so good to hear from other country folk :rotfl:
    Nov 2015:- Mortgage Balance £244,671
    Aug 2017:- Mortgage Balance £183,832
  • mrsp1987
    mrsp1987 Posts: 815
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    Thank you very much Cox. Just had a scoot over and read your diary. I'm jealous of your income and ability to overpay so much but then again your mortgage is early 2.5 times mine so swings and roundabouts isn't it?

    Whilst perusing I saw the outside photo of your house where the annex was being built. Looks remarkably like a modern estate in my town actually!
  • mrsp1987
    mrsp1987 Posts: 815
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    WHY do I do this to myself? Why do I torture myself so?!
    Why did I not fix my mortgage for 2 years and then I could be in the position where I was paying £350 a month and be able to afford an extra £200 a month over payments plus anything else I can find on top?! Why must I continue to look for better offers when I know I can't take them for another 3 years?!
    Bah flipping humbug!!

    However, I have figured out that subject to the property still being valued at £155,000 (which we both agree is an undervaluation - I reckon £170K, hubby reckons £185K. Another reason I'm in charge of the finances) I only need to get to £93K to reach a 60% LTV ratio. I should reach this in December next year even if I make no other overpayments. So, will definitely be there by the time I come to remortgage in 2020. Humph. Got another 4 ruddy years of paying over £500 a month when I could be better off.
    However, I have done the maths and actually I wouldn't be better off. Assuming it's a 5% fee to get out early, which I think it is plus the stated £1887 fees to set up the mortgage with the new provider (total of £6814) I would save myself around £5662, so would have payed an extra £1152. However, I havent taken into consideration the extra benefit of £200 a month going towards overpayments on top of the standard monthly payment.
  • mrsp1987
    mrsp1987 Posts: 815
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    I dunno, having a play around with the spreadsheet (Locoblade's I think) and comparing the mortgage I have now and the mortgage I could theoretically get I'm not sure if it would benefit me. It would cost me between £6500-£700 to get out of my current one and set up this new one. If I make the same extra overpayments of £500 every 3-4 months and an extra £1000 as a one off on both mortgages and then on the 'new' mortgage overpay £150 every month even when I pay an extra £500 making it £650 for that month the difference between outstanding balances in April 2018 (when the 'new' mortgage fix rate would end) is only £3161.25.

    So, if I've got this right I would still be £3652 out of pocket for having switched early? Or do I add the £3162 difference on top of the £3450 (£150 x by 23 months) meaning that I would be £3050 better off??

    Am I even making sense anymore?!?!?!
  • lippy1923
    lippy1923 Posts: 1,374
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    Just been reading through your diary. Well done on all your progress so far :)
    Total Mortgage OP £61,000
    Outstanding Mortgage £27,971
    Emergency Fund £62,100
    I AM NOW MORTGAGE NEUTRAL!!!! <<Sep-20>>

  • mrsp1987
    mrsp1987 Posts: 815
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    Right, well I got myself oh so confused trying to figure out if switching would be of any financial benefit at all so I did the only thing a girl does in this situation. I went and talked to my Dad :rotfl:
    In all seriousness he was an assistant branch manager for N@twest for over half of his career and has an amazing mathematical brain and is quite financially savvy - except he doesn't shop around but that's a separate issue. Anyway, I knew that I could talk to him and he would lay it all out nice and simple for me and if he said that I should stick or twist he was giving me some good advice. And he's free.
    Anyway, I emailed myself that fancy spreadsheet I have and he took a look at that and said stick. So, I'm sticking. There's also the fact that I have quite a low income (£765 a month) and an additional part of my income is from self-employed work. Even with a great credit rating, no debts/minimal monthly outgoings and lots of savings I think I'm a pretty risky person to take on with a mortgage, even when the application would be joint.
    He also mentioned that everything could go completely Pete Tong after June and it would be far more sensible to stick for another 4 years than switch for 2 years and then potentially find myself in a position where the interest rates are higher than what I could still be on if I'd stuck with my current provider.
    So, TL:DR I'm not switching my mortgage anytime soon. I will however keep hacking away at the mortgage and make as many overpayments as I can.

    Speaking of after we get back from Zagreb next week the new tax year will have started and the hubby will be giving me some more money. I need to figure what to do with it. I'm thinking of spending some of it :eek::eek::eek: There's a charity in Canada that does some amazing work with stray cats, feral cats and kittens etc with Trap, Neuter, Release schemes and its kitten season now too. So, I might make a contribution to that and I might be able to name a kitten!! I'm also tempted to put another thousand down on the mortgage! And I might top up some personal savings and still have about £10K left over to save or invest. I'm intrigued by the new P2P ISA. I like the concept as I have some money in Funding C!rcle and I think it's less risk that a S&S but better interest potential than a Cash ISA.

    Anyway, need to print off my travel documents which is the original reason I came onto the computer 4 hours ago and then I need to make dinner. Thoughts on a postcard please...
  • coxj2901
    coxj2901 Posts: 207 Forumite
    mrsp1987 wrote: »
    Whilst perusing I saw the outside photo of your house where the annex was being built. Looks remarkably like a modern estate in my town actually!

    I did wonder if you were from the same town when you posted about Aldi and the Rugby club. If you use Aldi instead of Waitrose and the Co-op then I'll know you're from the same town :rotfl:
    Nov 2015:- Mortgage Balance £244,671
    Aug 2017:- Mortgage Balance £183,832
  • mrsp1987
    mrsp1987 Posts: 815
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    Wow it's a tiny world isn't it? Yes I use the Aldi most of the time although hubby works at the W@itrose so I occasionally pop in there. Never the Co-op though!

    Oh and whilst I was at the parental a I looked at the label for the wedding dress. It is Justin Alexander and its 6255. I repeat, 6255 and that is co firmed by G00gle images. So I know what I'm doing after I come back from holiday!
  • mrsp1987
    mrsp1987 Posts: 815
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    Got a lovely letter from the Spanish bank this morning confirming 'changes to your mortgage'. From May I will be paying an extra 14 pence a month. Eh, whatever! :p
    It also confirms that my mortgage is due to expire on the 1st October 2037. It was originally due to finish on 1s June 2041 and after paying off £10K in December it went down to December 2037.
    So, currently £500 extra = 2months earlier.
    This means I've reduced my term by 3 years and 9 months. So far. I just need to find another 10 years and 2 months wirth of saving to hit by 40th birthday goal :j:j
  • shangaijimmy
    shangaijimmy Posts: 3,796
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    Totally with you on the small fixes as it gives you flexibility when circumstances change. We're halfway through a 2 yr fix and already looking ahead at potential next moves in 11 months time.
    MFW: Was: £136,000.......Now: £61,892.24......
    Mortgage Neutral Deficit: £43,082.90... Mortgage Neutral Savings: £18,809.34

    MFiT-T6 #13 - £3,517 of £15,500 (22.69%)
    1% Mortgage Challenge 2022 - £157.59 of £650
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