It's a long and winding road

TwentySomethingGirl · 31 December 2015 at 11:51AM

Hi
I’ve been reading these threads for a while now and thought it might help me keep myself accountable if I have a diary here.
To explain the title, I’d love to be mortgage free. I hate being in debt and though I know this is a marathon rather than a sprint it doesn’t stop me wanting it gone ASAP. That said, the current mortgage is on our first property (a 2 bed flat) which is not going to be our “forever home”. We want to move to a house with a garden in (hopefully) a few years, and start trying for kids in the next couple of years too. I realise that will come with a hike in the mortgage and that is the opposite direction to the one in which we should be travelling, and is counter-productive to being mortgage free. We’ve been OPing the mortgage but with the intention of better LTV when remortgage comes around and for the new purchase when that eventually happens, rather than thinking it’ll actually get paid off. I’d love to be fully mortgage free in the next 10-15 years, certainly before I’m 40.
A bit about us...
We’re currently a household of 2 adults (25 & 26), a small dog and a guinea pig. My husband and I both have all right paying jobs, and we don’t really have any extravagant habits. We bought our flat a year ago using the Help To Buy scheme for just shy of £170,000. The mortgage stands at about £122,000 and we owe the Government 20% of the property value when we sell, or pay the loan off.
This has got to be quite a long post so if you’re still reading please join me. I can use all the help, tips, encouragement and information I can get.
TSG

pavlovs_dog · 31 December 2015 at 12:09PM

Welcome TSG.

I suppose the best place to start is checking through your mortgage documentation. How much can you OP penalty free each year? Can you overpay (OP) in dribs and drabs or does it have to be a set amount?

Then you need a cunning plan - how are you going to find spare £ss to overpay? Even small amounts make a big difference. There are numerous challenges on the MF and debt free wannabe board to motivate and inspire

TwentySomethingGirl · 31 December 2015 at 12:38PM

We can overpay 10% of the value of the mortgage, and can make as many OPs as often as we want for as little as we want. We have the mortgage on our online banking but it does take a couple of days to clear any amounts sent.

Last year we started OPing in April and paid £811.60 extra. I'm hoping for more this year, but as they say, every little helps.

There is a standing order set up each month for £102.90 (it makes the payment a round number, folks in real life think it's weird that I'm funny about numbers...).

I've joined MFW2016 as I found the 2015 one helped with motivation.

January is going to be a month for analysing our spending so I can draft some kind of budget for groceries etc because although I shop for cheap stuff I don't have a figure to stick to or under. We also get our mortgage statement in January so from February we will start in earnest.

pavlovs_dog · 31 December 2015 at 1:03PM

TwentySomethingGirl wrote: »

There is a standing order set up each month for £102.90 (it makes the payment a round number, folks in real life think it's weird that I'm funny about numbers...).

me thinks you'll fit right in on this board

Groceries is a biggie for us too. A concerted effort to

* shop from home and use what we have in
* reduce food waste
* avoid mid week top up shops
* eat more veggie meals

has made a big difference to our monthly spends. I'm looking to get an ever tighter grip on the budget in 2016.

TwentySomethingGirl · 2 January 2016 at 2:35PM

I'm going to try for proper meal planning, and shopping to match that for the week (and stick to it!).

First OP of the year is the standing order for £102.90. I'm hoping to increase this once our "spending review" is done.

I'm quite pleased with myself, I've avoided spending loads in the Hobbycraft sale which I chalk up as an MSE win

TwentySomethingGirl · 4 January 2016 at 2:02PM

Nothing financial to report, however DH and I went to se my dad at the weekend. I left them alone for a while and came back and DH was telling dad about OPs and trying to explain how it all works. He didn't explain it very well so I took over and dad seems surprised and impressed at how much he can save and the time he could take off his mortgage so I think he's going to his bank at the weekend to talk about it. I try and spread the knowledge but a lot of people won't listen and think it's not worth it...

DH is enthusiastic when I tell him how much money it can save us but he doesn't understand why I split our money up (bills from a 123 a/c, TSB 5% a/c, going to have a N/Wide 5% regular saver soon), or the organisation to switch accounts to get the joining bonuses, so that side of things I manage and usually try and keep him thinking we don't have as much in savings as we do so he won't think we're flush and get lax about saving.

Luckyinlife · 4 January 2016 at 3:09PM

Sounds great im in my 20s 28 now and feel the same way altho im single with a son you will still manage to OP even when you have kids :]

good work on the first OP as well

Instead of doing a standing order could you not try to overpay weekly so just do a review of your accounts once a week and overpay what you think you can easily afford
im trying to op at least once a week depending on whats going on :]

Good luck on your journey its lots of fun :]

TwentySomethingGirl · 6 January 2016 at 2:05PM

I set up the standing order so that I know it is always going, and then try and add more as the month goes by. Last year we only paid the SO but I intend to make a concerted effort to do more this year.

Reading through other diaries I'm quite daunted by the levels of pay and OPs of others. I know it's all relative but psychologically it makes me feel like I should be doing more.

Luckyinlife · 6 January 2016 at 2:55PM

I see thats a great way to go about it :]

I wouldn't think like that as you say its all relative some have 10k mortgages and others have 500k+ some people have 2 working people at home some have just 1

also it depends how much of a priority it is to you like some people chuck everything at it and some people just like to put 10% in to it

Paying the mortgage off for me isnt the most important thing in my life it can take over tho quite easily

TwentySomethingGirl · 7 January 2016 at 12:08PM

Spending review so far...
£75.57 on fuel for cars
£129.71 grocery shopping (bulk buying and freezing meat is the most expensive bit of this)
£22.50 entertainment
£9.07 eating out

3 NSD's so far this week, though DH is working away so he might have spent something he hasn't told me about yet...

TwentySomethingGirl · 8 January 2016 at 11:45AM

£18.80 spent on a dental check up yesterday.

I find myself looking at remortgage deals, even though we're only a month into the second year of a 2 year fix.

Should start on getting DH to sit down with me to talk about the future. I think we'll want to move in a couple years, but I'd like to be able to keep our flat and rent it to a family member who needs some help so I don't know what happens if we wanted to move while in a fix.

I assume we'd have to remortgage to a BTL mortgage and get a new one for our new property...no idea how that all works though, and presumably we'd need to have a new deposit saved up as we're not selling the existing property to use the equity as a deposit...lots to think about, I should stop playing with the figures while I'm still not sure what will happen, but I so enjoy it!

It's a long and winding road

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