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  • FIRST POST
    • Tropically
    • By Tropically 12th Sep 16, 9:56 PM
    • 55Posts
    • 155Thanks
    Tropically
    Getting rid of a London-sized Mortgage
    • #1
    • 12th Sep 16, 9:56 PM
    Getting rid of a London-sized Mortgage 12th Sep 16 at 9:56 PM
    Hello,

    I tried to look for other situations which were like mine but you all seem to have everything so under control. You are all very inspiring so I thought I would put up my story too.

    I bought a house in June with my partner for £425,000 (London) and our mortgage is £318,000. Our mortgage payments are about the same as we were paying in rent but we have over 3 times the space now. Yes this a huge mortgage, no, we don't make a lot but the time came for us to buy instead of rent.

    Plan:
    1. Call bank tomorrow and see if I can 'round up' our mortgage which will cut off 2 years from the term.
    2. Get £10,000 in savings again as an emergency fund before over paying mortgage - I don't have any money at all any more.
    3. Get in a tenant from November 1st and rent the second bedroom for hopefully £700/month and apply that as over payments.

    It would be amazing if we could pay off the mortgage 10 years early. I would be just over 40. I have a lovely spreadsheet which calculates all of this for me. If we were to only apply the extra rental money to the mortgage, we would be able to pay off 10 years early.
Page 2
    • EatingTheElephant
    • By EatingTheElephant 21st Sep 16, 6:58 AM
    • 608 Posts
    • 2,930 Thanks
    EatingTheElephant
    Sounds like you are on the right track to reduce your outgoings by identifying where it is all disappearing
    • Moneyfordreams
    • By Moneyfordreams 21st Sep 16, 9:21 AM
    • 648 Posts
    • 3,060 Thanks
    Moneyfordreams
    good on you for having all the information at hand.... it took years for my OH to stop spending, and he learnt the hard way...... the drip drip drip of information does eventually get through (then he can use it or ignore it)

    No spend October is on the cards for us too.... can't wait
    Mortgage Feb '13 £200000, end 2038. Aiming for before March 2025 (crunched to 2034)
    January 16 £182800 : minimum £360 OP but needs to be £600 to achieve 2025
    Current mortgage £168060
    Car loan finished oct 16
    h@lifax CC £5360 0% until May 2018.. will pay minimum for now, slow stooze
    • McTaggus
    • By McTaggus 21st Sep 16, 5:15 PM
    • 217 Posts
    • 252 Thanks
    McTaggus
    Loving seeing another crazy South East mortgage on here - I was having a panic I was the only one daft enough to get myself into that much debt

    Mini-goals are definitely a great way forward... I set myself my OP per month goal (can you accrue in savings if you can't regularly OP?) to stick to, but its heavily linked to my "not so mini-mini goal" which is to at least to break out of the half of million of mortgage debt I'm now technically in, and into the four hundred bracket within the next 18 months if I can!

    Wishing you the very best with your journey! Have subscribed for motivation - when you're looking at such big sum, it can send you cross-eyed just trying to figure out how the hell to make an impact! Seems like you're well organised so far though - good luck!!!
    • Tropically
    • By Tropically 21st Sep 16, 10:37 PM
    • 55 Posts
    • 155 Thanks
    Tropically
    I wonder how much money in the world is stuck, unclaimed.

    I used to live in Canada but basically came home for Christmas and my job, which was reliant on science grants, didn't get renewed. I just called today to close the accounts after being away for over 6 years. I had over £300 in the account which had gone dormant. I have transferred it to the UK now. I also had, quite worrying in fact, an open credit card. Luckily the credit card was not compromised because I would never have noticed. They had a very old UK address. So, £300 of my hard earned money was laying stuck in a far off bank.

    Apparently, over £1 billion is stuck in various unclaimed premium bonds, savings accounts etc. in the UK.

    I also will be getting a refund on a bunch of oyster cards I have lying around. I need to take them to a tube first but hopefully I will get some refunded.

    Apparently there is £223 million on unused Oyster cards.

    Then, last but not least I went through my old currency from holidays. I had to thank my old self, somewhere in the past I had organised it neatly into US money, Euros, Canadian dollars and Others. I will keep the US, EU, and CAD separate but I am going to take my Other money to a machine called FourEx. You can dump in all your foreign money and get cash back in pounds. I am sure the exchange rate is not bank-perfect but they accept change and old coins like francs. I don't plan on going back to Kenya or Bali, so I may as well get some money in exchange. I plan on doing that tomorrow so I will let you know how much money I unlock.

    I am so surprised at how much of my own money has gotten lost, stuck. It must happen to so many people, if not everybody. I bet people have so much money lost in pension accounts at old jobs. I feel like I have made money, but I have really only reclaimed money I lost.
    • Tropically
    • By Tropically 27th Sep 16, 11:30 AM
    • 55 Posts
    • 155 Thanks
    Tropically
    My partner and I had a nice sit down and talked over everything. We have agreed to contribute more to our joint account (£1,150 each) which will cover mortgage, bills, £250 each month for emergencies and £500 overpayment. We need to set up the standing order overpayment. Our bank told me I couldn’t do it, so I filed a complaint. They are investigating the complaint. Their website says that we can make overpayments and cancel any time but the person on the phone says that we need to apply for a new mortgage to do so. We shall see what they say.

    If we could overpay by £500 each month, that would cut down our mortgage term by 8 years!

    We are also trying a no-spend! I have already been paid for the month so I have given my partner £100 cash and kept £100 cash. This needs to last us until the 9th October and then we get another £100 to last us to the 25th October. I have excluded travel and groceries from the supermarket, so not a true no-spend but we need to eat and get around. I will post our September outgoings when it is past the end of the month. I hope that we can do it.
    • Tropically
    • By Tropically 14th Oct 16, 12:44 PM
    • 55 Posts
    • 155 Thanks
    Tropically
    When we bought our house, we knew that we weren't going to get any appliances. The kitchen was there since they built the house. There was an ancient gas oven from the 70s and the people who lived there before didn't use it. They have a convection oven on the counter. We bought a fridge without a freezer when we first moved in, but since then have been living off of barbequed food (our first priority when we bought!). Now that it's cold, we've been microwaving a lot and luckily there are quite a few 'power-less' meals especially a meal plan by Thrifty Lesley which has been so helpful. I was stuck in a debate. I didn't like the kitchen, it had bright yellow walls, brown and yellow tiles on the ground and blue and yellow tiles behind the kitchen. All the appliances were small sized and I knew we couldn't live with a 0.4 m oven. We had the problem: do you buy appliances that don't match your usage but do fit in the cupboards? Or do you go for a whole new kitchen? We decided to go for a whole new kitchen. I hope it will help our budget out because we will be happier in a new kitchen than the old one which didn't match our style and had severe layout issues.

    I thought when we bought the house in June, we'd have the kitchen in July and everything would be fine. It's now October and the builders arrived yesterday! I'm very excited and it is incredible how much work they have done in a short time. They have stripped out everything and done much of the electrics. When we have a kitchen again, I will be so pleased to be able to cook. There is so much frugal meal planning that I have been unable to do because I didn't have a hob or a stove. No soups, no boiled eggs, no beans on toast!! Plus, it has been just too easy to order food when we don't have anything in the house. That will all change when we get our kitchen. I will be able to buy in bulk! We will be less tempted by take aways! We will be able to have guests over and save some of that huge entertainment budget!

    We had the money for a kitchen set aside when we put an offer in on the house, so it hasn't come from our normal savings.

    I have been able to agree with my boyfriend to do £500/month overpayments starting in November. This will come out of our regular budget and then I will still try to add to it. E.g. this month I sold some books online and got £60! That went to our joint saver and will be applied as an overpayment eventually. Unfortunately, our bank will not let us make overpayments under £500 and will not let us reduce the term. They will only reduce the monthly repayment. I have done the math and it makes a negligible difference at this stage.

    Also in November, we will try to take in a lodger!
    • misscousinitt
    • By misscousinitt 18th Oct 16, 3:52 PM
    • 3,366 Posts
    • 18,965 Thanks
    misscousinitt
    Hi there!

    Good luck with the kitchen - I hope it goes alot smoother than mine!!! I am sure it will.

    Looking back over your posts and that entertainment budget!! If you feel you can't restrict yourselves too much yet - just chop it in half! that way you are not depriving yourself and still saving a good chunk of money.

    You have to live! But £700 is ALOT on entertainment - I know you know that already. Balance is everything when you are in it for the long haul!

    Best of luck with it all.

    MCI
    Mortgage Free x 1 03.11.2012 - House rented out Feb 2016
    Mortgage No 2: £99,090.90 (08.11.2016)
    OP's to Date £2000

    Renovation Fund:£944.75; Kitchen Fund (including re-wiring): £notalotleft; Roof Fund £5000.00
    Nectar Points Balance: £35.49
    • try harder
    • By try harder 24th Oct 16, 9:56 AM
    • 180 Posts
    • 460 Thanks
    try harder
    Great diary and well done at getting motivated at the start of your mortgage ,i will be following with interest.
    • Tropically
    • By Tropically 27th Oct 16, 4:57 PM
    • 55 Posts
    • 155 Thanks
    Tropically
    Slow progress...
    Tryharder - Welcome! I also follow yours with interest!

    misscousinitt – They said that the kitchen might be done on Saturday! I am dying for it to be ready. I can’t wait. I know it's a lot on entertainment. We are really really going to try to work on it. I’ve identified a number of culprits. One is my boyfriend taking out cash. Sometimes several times per week! If I am feeling cynical, I feel he is doing it so that I don’t track what he is buying. I suspect he does this for two reasons. The first is that he is a bit overweight and he would feel I am food shaming him if I saw £15 at Pret every day. The second is that he maybe doesn’t want me to track all his purchases. I never expected to fall into the gender role of being a nagging harpy. I thought I would be in an equal partnership and that feminism had won already! But instead I am constantly nagging about overspending, eating too much, not tidying, not cleaning. The list goes on.

    Another culprit is mystery dining. My partner and I go mystery dining once or twice every week. It is so much fun and a great way to get some free food. BUT, we constantly spend over the limit. So yes, we might be £30 of reimbursed food, but our total bill comes to £45. NOT frugal! So we must must must stay within the MD budget. It has been a lifesaver while we are getting our kitchen redone because although I tried to make a frugal meal plan, every inch of our house is covered with dust and boxes and we didn’t have running water for a day or two. Washing dishes in the small upstairs sink is very tedious.

    I am not a total innocent. I have a tickets problem. Going to the theatre is one of my hobbies but it can be expensive. I sometimes feel like I NEED to buy the tickets now, or else they will sell out and I will miss out. I have now made a separate savings account and am transferring £20 into that account each month. I will only let myself spend money on tickets if it is totally covered by the amount in that account. Yes, I may miss out on things but there are tons and tons of new things every day to go to.

    We tried a no-spend in October. Well – our idea of a no spend. We were each given £200 to spend from the 25th to the 25th of October. From that money, everything except food at supermarkets and travel had to come out. I managed to have £15 left in my wallet and my boyfriend had about £20. This means that our entertainment budget was only £400 this month – an improvement by half. It was a bit tricky because our house is currently very unpleasant to be in due to construction, dust, and no space. I am going to try to make what was meant to be a no-spend into a regular spend. I am going to only take out £160/month and use it for entertainment, like the envelope system.

    We haven’t made any overpayments yet, but we now have money to pay for our kitchen in full. We were £400 short of the full amount last month. We bought it on credit, in an attempt to stooze when the Santander was at 3%. I had never had any debt before the mortgage, and now 3 months later I have an unsecured loan and 1.5% on £3,000 for 6 months isn’t that great for stoozing. Having unsecured debt is not a good feeling but we have the money in the bank and a reminder to pay it off in the calendar.

    Our bank makes it really tricky to overpay and there is no option for online banking. It will take extra effort to get overpayments set up. Getting over the idea that MFW is a marathon and not a sprint is really really tricky. I have been thinking about being mortgage free for 4 months now, why do I still have a mortgage?!?!

    Mortgage debt = £315,000
    Overpayments = 0 
    • misscousinitt
    • By misscousinitt 31st Oct 16, 4:57 PM
    • 3,366 Posts
    • 18,965 Thanks
    misscousinitt
    You will get there.

    Well done on getting the entertainment budget down a bit - it all helps.

    It's difficult when the house is up to it's neck - but it will get better and you are getting into better habits now. Once you have paid for things it will be much easier to overpay.

    MCI
    Mortgage Free x 1 03.11.2012 - House rented out Feb 2016
    Mortgage No 2: £99,090.90 (08.11.2016)
    OP's to Date £2000

    Renovation Fund:£944.75; Kitchen Fund (including re-wiring): £notalotleft; Roof Fund £5000.00
    Nectar Points Balance: £35.49
    • Tropically
    • By Tropically 7th Nov 16, 3:39 PM
    • 55 Posts
    • 155 Thanks
    Tropically
    Thanks misscousinitt! It makes me feel happy when I fix something at home and I look forward to having some DIY tasks.

    The kitchen was finished last week and it looks gorgeous. I am really pleased. With that, I spend Wednesday evening cleaning everything and putting our kitchen supplies away. Almost all our boxes are unpacked now! One of my first priorities was to get our place listed on Airbnb for some dates between now and Christmas. We have a holiday planned and my sister coming to visit so while eventually we want to get a lodger, I thought I might get one or two guests as a stop gap between now and then.

    I took some photos for Airbnb and my partner gave me cursory permission to list our spare room. When I was taking the photos, I had to move around the last one or two boxes which I had been keeping in the spare room. I just tried to keep them out of the photo. The very next morning I had a booking for 3 nights, starting the day after that! Ah!! So quick. I was not expecting such a response to stay in a gritty southeastern suburb of London. Someone is also coming right after they leave for one night and then the next day we go on holiday. I was not expecting so much work but am certainly pleased. It was priced pretty cheaply so that I could get some good reviews at first. It’s a nice £100 for the week which I wasn’t expecting.

    They arrived and seemed very nice. They haven’t been around much, which is the benefit to having tourists rather than lodgers stay.

    With the kitchen finished, the only major task we have left is to get insulation. I think I can install the insulation myself. Our place is C rated and our last flat was A rated. We only had the heater on about 5 times a year in the last place but now we’ve had it on for two nights already! If we get insulated, perhaps that would be better. Plus it must increase your house value to have a better rating.

    Still no overpayments. Yikes. But I am really needing some clarity on goals.

    Really we have two goals:

    1. Get 6 months worth of emergency funds. This is approximately £10,000. We have £4,218 as of today. With the amount we are currently saving, I could get this in May 2017. That seems really far away so the stretch goal is to reach £10,000 in February 2017.

    2. Begin over paying £500/month after we have our 6 months of emergency funds.
    • misscousinitt
    • By misscousinitt 8th Nov 16, 11:58 AM
    • 3,366 Posts
    • 18,965 Thanks
    misscousinitt
    Sensible goals there...

    Airbnb!!!! What a great idea - ideal as you are in London - hotel accommodation can be soooo expensive in the Capital.

    Glad you are pleased with your kitchen - so satisfying getting everything in it's place!

    MCI
    Mortgage Free x 1 03.11.2012 - House rented out Feb 2016
    Mortgage No 2: £99,090.90 (08.11.2016)
    OP's to Date £2000

    Renovation Fund:£944.75; Kitchen Fund (including re-wiring): £notalotleft; Roof Fund £5000.00
    Nectar Points Balance: £35.49
    • Moneyfordreams
    • By Moneyfordreams 8th Nov 16, 4:03 PM
    • 648 Posts
    • 3,060 Thanks
    Moneyfordreams
    It's lovely when you fix your place for you

    great plans to have , insulation a must our old house still cooler at the top, I'd love to do that foam stuff on the inside of the slates.. but never got further than the pictures in the sunday papers.

    @irbnb has been fantastic for us. We are close to a northern city but live in a nice spot with other attractions. We have earned around £5000 in the last 12 months. Plus we have a lodger too (but he's another story).
    Mortgage Feb '13 £200000, end 2038. Aiming for before March 2025 (crunched to 2034)
    January 16 £182800 : minimum £360 OP but needs to be £600 to achieve 2025
    Current mortgage £168060
    Car loan finished oct 16
    h@lifax CC £5360 0% until May 2018.. will pay minimum for now, slow stooze
    • Tropically
    • By Tropically 24th Nov 16, 12:39 PM
    • 55 Posts
    • 155 Thanks
    Tropically
    Airbnb is going well! We have another lovely lady today. We have hosted three people now and so that means an extra £100 to the joint account and we are almost fully booked until December. For the last few days we have open I have increased the monthly rate quite a bit so nobody is likely to book them. We are still one of the cheapest in London but I really wanted bookings so i didn't mind. Now that I'm almost fully booked, I appreciate the nights with no washing!

    I have just come back from a week in the Caribbean! We stayed with family and had a DIY scuba diving holiday by doing shore dives and using our own/my family's equipment. I am very very pleased to say that the week trip for two cost £450, including four days of scuba diving which are normally £150 per person per day. The flights were booked using air miles and booked several months ago. The holiday was basically cheaper than real life! I also had a very serendipitous event where last year for a holiday I took out a bunch of American money for a holiday thinking that I wouldn't be able to pay by card for hotels etc. where I was going (Asia). Turns out they took card everywhere and so I had $500 in cash which came back home with me after the holiday. I was able to use that to pay for the holiday which was priced in dollars, thereby avoiding that 20% drop in the pound and meaning I didn't spend my day-to-day money on the holiday at all. This is the only one-time benefit I will experience with the drop of the pound.

    Tomorrow is payday! I had a surplus of £275 this month and so have transferred £100 to the now-empty holiday fun and £175 to the joint account. Hopefully my partner will also have a surplus and will contribute that. He doesn't get paid until the end of the month so I will wait until then to do the monthly spend calculations.

    Unfortunately that £175 didn't last too long because I had to buy blinds for the new kitchen. At the moment we didn't have anything up so people could see right in. Not so good for when I want to get something out of the fridge in my pyjamas! We had taped up a small piece of fabric while we were away so that people wouldn't be able to see our house was empty. Can't have an expensive kitchen with taped up old curtains.

    Nonetheless we have made good progress this month and our savings are up to £5,322 because I took that holiday money I didn't spend and the monthly surplus. Over half way to goal number 1!
    • Kittenkirst
    • By Kittenkirst 24th Nov 16, 8:30 PM
    • 849 Posts
    • 3,788 Thanks
    Kittenkirst
    What a fab and low cost holiday! Sounds like the perfect antidote to the chilly weather here.

    Whereabouts did you go in the Caribbean?
    Emergency savings- £701.54 /£1000
    Mortgage Oct '16- £170.995 LTV- 90%
    2016 OP target- £15.06 / £150 -
    Mortgage end date- Nov '41

    NST: 42
    • Tropically
    • By Tropically 1st Dec 16, 11:47 PM
    • 55 Posts
    • 155 Thanks
    Tropically
    Kittenkirst - I was in the Cayman Islands staying with my sister! She is also coming to visit me this week to do some Christmas shopping in London. It's going to be so much more expensive. Already this month is expensive. I hate the cold!!

    We used to live in a small flat which was rated almost A on its EPC. We usually didn't have to turn the heating on until January. Now, we are in a much bigger C rated house and it's so cold. Soooo cold. I don't like turning on the heating every day. Ahhh!

    Plus all the parties are turning into being very expensive. Already I have spent too much...
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