Half a house

Silence101
Silence101 Posts: 396
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edited 27 September 2017 at 6:24PM in Mortgage-free wannabe
So we're applying for a mortgage for a shared ownership. IF it goes ahead I want to try and overpay a little every month and save up for the deposit for the 2nd half.
If it doesn't go ahead I want to save up more deposit. Either way I need to try and stay accountable!

I was thinking of dividing our spare monthly cash in 4 (after bills and food etc)
a) 1/4 to overpay mortgage
b) 1/4 to save towards deposit
c) 1/4 to save for emergency fund etc
d) to spend

If the mortgage doesn't work out I'll be putting a+b towards a deposit to improve our LTV rates.
Is it a realistic division or would you add more categories, like home improvement?

UPDATE (p8)
We have got the keys! I'll update some more once we have all the paperwork sorted.
«13456734

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  • Silence101
    Silence101 Posts: 396
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    I've done some basic calculations, and it looks like we might be able to save £45/month for each pot.
    Hopefully we'll find ways of cutting back even more, but the last few months we've not been saving anything at all. I had a look on the overpayment calculator, and even paying just £5 more a month on our (hopefully) soon to be mortgage would cut down one year to our payment plan. So I need to remember that every little bit really does help. We'll have quite a lot of expenses when (if) we first move so we might stick to a very low overpayment the first few months. But I don't want to get complacent as we really do need to be quite intransigent if we plan on affording the 2nd half of the house.
  • Silence101
    Silence101 Posts: 396
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    I've drawn three grids that will be filled up every £100.
    Aim is for £5000 emergency fund
    Deposit for 2nd half £30000
    And to overpay by £15000

    I think we'll be concentrating on the EF first but may alternate deposit fund and overpayment fund as we go.

    We're trying to save as much as possible these next few months to afford the flooring and other bits, as the fees etc are making quite a dent in our savings. I'm working on the assumption that we'll have £500 or less left over for the EF by the time we buy the house. If it all falls through, we'll at least have a slightly healthier EF so will be able to save for a bigger deposit until we attempt to buy again. (As we can only afford a shared ownership at the moment, I'm not sure how often we'll find one on the market, so we might only try again in a couple of years.) Obviously the hope is that it all goes smoothly this time and we won't have to go through this again!
  • :wave: Hi Silence101

    You appear very motivated with your goals, I will be following your journey :D

    Saving for a deposit is hard, I am doing that exact same thing at the moment. I am hoping to be in a position to buy next year, fingers crossed!! I have found not popping to the shop and not ordering online has really allowed my bank balance to remain stable (who'd have known haha!! ;))

    :j
  • Silence101
    Silence101 Posts: 396
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    Haha, yes, I usually have no problem not spending, until I have to go to the shops for a necessary thing and come back with a million and one impulse buys! Same with online shopping. I don't usually use it but when I do I seem to have a binge of buying everything and anything.
    At least we're not in debt (apart from student loans)but it is scary to think how much we could have saved by now if we had been sensible!
  • penny*pincher_2
    penny*pincher_2 Posts: 69
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    edited 5 August 2017 at 7:38PM
    I just wrote the exact same thing on my diary - I would have saved so much over the years!! But it sounds like we are both in good positions with only student loans to pay off.... and thankfully, I never see that money so I never really notice it has been taken :)

    Onwards and upwards :)
  • Silence101
    Silence101 Posts: 396
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    Yes, I'm so impressed with people who have managed to pay off huge debt and still pay off their mortgage early!

    Our potential mortgage is a 35 year one, which just seems crazy! And it's only for half the house! So we really need to find ways to save up, to be in a position to buy the rest.

    At the moment I'm a sahm so my job is to keep the kids entertained and fed on the smallest budget possible, and hopefully we'll be able to save/overpay a lot more when I return to work (in 2 years time) It'll be interesting to see how much we can squirrel away with 2 incomes, but it's a bit frustrating when I know I can't do much towards it for the time being.
  • shangaijimmy
    shangaijimmy Posts: 3,796
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    Don't worry you two, give it 6 months and you'll both have developed a phobia for spending and an addiction for saving/OPing even the tiniest amounts ;)
    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
  • Silence101
    Silence101 Posts: 396
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    Don't worry you two, give it 6 months and you'll both have developed a phobia for spending and an addiction for saving/OPing even the tiniest amounts ;)
    I hope so :rotfl:
    I guess it's easier to save when there's a goal, instead of just for the sake of it.
    I do ever so often try and send change over to my ISA, and it does slowly build up, but I don't do it regularly enough to really make a difference.
  • Silence101
    Silence101 Posts: 396
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    Transfer £52.60 into my "rent" account. I'm not using my ISA at the moment as I don't know when we need to pay for solicitors etc and can't afford any delays as the exchange deadline is so soon.

    Currently have £2543 in rent account, but that will all be gone by the time we've paid rent and solicitors and whatever other fees we need. So I'm not adding it to my signature as none of it will be going towards a deposit at this time.

    I've calculated my average income a week and I plan to transfer whatever I haven't spent into the rent account. I usually end up spending it if I keep it in my current account so I need to physically move it! I'm wondering if I should move all the money out into a different account except a week's worth of income, and then retransfer weekly amounts each Monday. The main issue would be to remember that x amount isn't actually savings but is needed for upcoming weeks.
  • shangaijimmy
    shangaijimmy Posts: 3,796
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    Silence101 wrote: »
    I hope so :rotfl:
    I guess it's easier to save when there's a goal, instead of just for the sake of it.
    I do ever so often try and send change over to my ISA, and it does slowly build up, but I don't do it regularly enough to really make a difference.

    I recommend a daily TT of current account. Every morning i round down to the nearest £1 into an online saver, then i send the pot across to the mortgage each Sunday. It usually end around £3.50 a week. Great for motivation and keeping some momentum in a quiet period.
    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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