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  • FIRST POST
    • Tropically
    • By Tropically 12th Sep 16, 9:56 PM
    • 117Posts
    • 352Thanks
    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 5
    • try harder
    • By try harder 30th May 17, 11:59 AM
    • 466 Posts
    • 1,490 Thanks
    try harder
    How lovely -Congratulations
    • themadvix
    • By themadvix 30th May 17, 3:16 PM
    • 1,017 Posts
    • 5,369 Thanks
    themadvix
    Congratulations!!
    OPs 2017 = £2603/£10000
    S&S ISA = £300/£600
    OPs made 2016 = £6142.12
    Starting balance 2012: £132000; balance June 2017: £99,974
    MFW2017 no. 38
    • poddle911
    • By poddle911 30th May 17, 3:21 PM
    • 1,397 Posts
    • 6,012 Thanks
    poddle911
    Congratulations Tropically! That's super news
    LBM Sep 2008 debt: £27,927.04
    start weight: 140.2, week 2: 138
    • Moneyfordreams
    • By Moneyfordreams 30th May 17, 4:03 PM
    • 874 Posts
    • 4,241 Thanks
    Moneyfordreams
    congratulations xxxx
    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 £159800
    h@lifax CC £4500 0% until May 2018.. will pay minimum for now, slow stooze
    xmas, chairs, hoover, computer and holiday [STRIKE}clothes[STRIKE] DD1 cc
    • mfmaybe
    • By mfmaybe 30th May 17, 4:28 PM
    • 979 Posts
    • 3,084 Thanks
    mfmaybe
    Lovely news, congratulations
    Create credit card buffer fund £12.93/£1000 1.4%paid. Pay by Christmas 17

    Other debts paid since 1/1/14: £17,005
    • PrincessLou
    • By PrincessLou 30th May 17, 5:04 PM
    • 500 Posts
    • 1,913 Thanks
    PrincessLou
    How wonderful and so exciting! Congratulations
    Mortgage - £105,500
    • Thisgirlcan
    • By Thisgirlcan 30th May 17, 10:24 PM
    • 11 Posts
    • 42 Thanks
    Thisgirlcan
    I've loved reading through your diary so far! Congrats on the engagement, how exciting!

    Our mortgage is currently £240k and our repayments just over £1200 a month so a little under yours.
    Our income is a little less and we have 3 children (and live in a sleepy village) so we don't go out haha! I'd spend all our money if we lived in London though I reckon

    The envelopes are a great idea - so much cash in each and either set aside for a show or cinema OR a challenge to see what you can do within the budget.

    Looking forward to seeing how you get on!
    • Kittenkirst
    • By Kittenkirst 31st May 17, 8:31 AM
    • 1,570 Posts
    • 8,059 Thanks
    Kittenkirst
    Wow congratulations on your engagement! What truly wonderful news



    2017 MFW #20 - OP £1884.86/ £2150. 87.6%
    Last 3 months- Jul £172.36 Aug: £212.52 Sep £132.24

    Emergency fund £3725]/£6k
    Mortgage Oct '16 £170.995 LTV 90% end: Nov 2041
    2016 OPs £255.50/£150
    • Jessy103
    • By Jessy103 31st May 17, 10:44 AM
    • 437 Posts
    • 1,856 Thanks
    Jessy103
    Fantastic news, congratulations!!!! xxx
    Original Mortgage Amount 2007 - £87,310.50
    Mortgage Amount July 2017 - £62,900.00
    Overpayment Target for 2017 - £5,000 /£3,679.09
    Jan - £873.26 Feb - £185.38 March - £269.07 April - £193.66 May - £467.64 June - £407.79 July - £849.96 August - £255.11 September - £177.22
    • Tropically
    • By Tropically 30th Jun 17, 9:33 AM
    • 117 Posts
    • 352 Thanks
    Tropically
    Thank you all SO much for your well-wishes. It means a lot to me

    I have traded in reading MSE for hitched.co.uk, which is the opposite of MSE!

    My now fiance didn't get me a ring on his own, as he wanted me to be able to pick one and also he knows I like to be involved in any major financial decisions. I walked around with my sister to the standard high street stores but got too shy about trying them on. Eventually we went to Tiffany's and the service there was INCREDIBLE. But, talk about shifting baselines. I went in thinking that £1k would be MORE than enough for a ring. I tried a ring on and it was sooo sparkly. I tried on a slightly bigger one and it was soooo much sparklier. So many sparkles. I think I was blinded by the sparkles because I came away thinking that I needed to have a £5k 0.5 carat Tiffany's ring.

    After diamond daze wore off, I remembered that what I actually wanted was a moissanite ring. It is lab-made, meant to be more environmentally responsible gem and it's both more affordable and equally as sparkly. So I did choose just over a 1 ct diamond equivalent moissanite. I don't think that anyone can tell the difference and it was slightly over £1k, plus customs. Don't tell!!

    It's ONE YEAR since we bought the house! It's our house-iversary!! We haven't made any overpayments for a while... I'm going to see now if we can manage one today in honour of our house-iversary.
    Mortgage started at £318,000 in June 2016. Original MF - 2041
    Emergency Savings - £12,737.83/£10,000
    OPs: £3229/£7000
    Side goal: Save £4000 and get that mortgage below £300,000!!
    • Tropically
    • By Tropically 1st Jul 17, 2:48 PM
    • 117 Posts
    • 352 Thanks
    Tropically
    Alright, so I have done some of the house-iversary maths!

    I have also made an OP of £1000 in honour of the house-iversary. That makes our OP total for 1 year of homeownership £2729. This is not quite 1% of our total mortgage, so quite small. But in that year, we did do up our kitchen and save £10,000. Our mortgage is now £305,028. This is really very close to below £300,000. Then our mortgage would start with a 2!!!

    Another short update but been distracted!
    Mortgage started at £318,000 in June 2016. Original MF - 2041
    Emergency Savings - £12,737.83/£10,000
    OPs: £3229/£7000
    Side goal: Save £4000 and get that mortgage below £300,000!!
    • Tropically
    • By Tropically 8th Aug 17, 10:52 PM
    • 117 Posts
    • 352 Thanks
    Tropically
    We made another £500 overpayment, yay! I got a letter in the mail which says that our mortgage is £304,146.50. I really don't understand how this is calculated.

    So whenever we make an overpayment, we get a letter which says thanks for the overpayment and outlines the remaining allowance for the financial year. It gives me a reduced balance, and revises the mortgage repayments. The mortgage payments are ever so slightly lower. The first is £1295.94, the second is £1295.82. It started at £1309, so has reduced a bit over time.

    I had the kerfuffle about reducing the term versus the payments at the beginning, so I sort of know why things are happening. I just don't know what exactly is happening. It makes spreadsheets oh so difficult!! And I love a good spreadsheet.

    Hmmmm.
    Mortgage started at £318,000 in June 2016. Original MF - 2041
    Emergency Savings - £12,737.83/£10,000
    OPs: £3229/£7000
    Side goal: Save £4000 and get that mortgage below £300,000!!
    • mfmaybe
    • By mfmaybe 9th Aug 17, 7:57 PM
    • 979 Posts
    • 3,084 Thanks
    mfmaybe
    We made another £500 overpayment, yay! I got a letter in the mail which says that our mortgage is £304,146.50. I really don't understand how this is calculated.

    So whenever we make an overpayment, we get a letter which says thanks for the overpayment and outlines the remaining allowance for the financial year. It gives me a reduced balance, and revises the mortgage repayments. The mortgage payments are ever so slightly lower. The first is £1295.94, the second is £1295.82. It started at £1309, so has reduced a bit over time.

    I had the kerfuffle about reducing the term versus the payments at the beginning, so I sort of know why things are happening. I just don't know what exactly is happening. It makes spreadsheets oh so difficult!! And I love a good spreadsheet.

    Hmmmm.
    Originally posted by Tropically
    Do you make a standard overpayment? If not (or even if so!) how about asking the bank to make your monthly payment a fixed amount - say the £1309 it originally was - and then you will be overpaying by a bigger amount every month. Otherwise if you are anything like me you will fritter away the reduction rather than paying down the debt more quickly. Luckily my bank don't recalculate payments unless something else changes (eg base rate) so I get to keep the payment the same.
    Create credit card buffer fund £12.93/£1000 1.4%paid. Pay by Christmas 17

    Other debts paid since 1/1/14: £17,005
    • chelseablue
    • By chelseablue 10th Aug 17, 8:43 AM
    • 2,194 Posts
    • 2,695 Thanks
    chelseablue
    We're with Halifax and they keep the monthly payment the same regardless of how much we overpay
    Mortgage starting balance 26.02.16 £231,294
    Mortgage after Year 1 £225,078
    • Tropically
    • By Tropically 8th Sep 17, 11:13 AM
    • 117 Posts
    • 352 Thanks
    Tropically
    Happy Anniversary to MFW
    Well! It's almost a year since I started this diary!
    In my opening post, I had three goals, but only managed to achieve 1 of these!

    The three goals were:
    1. Round up mortgage - this was an insta-fail as my bank said no right at the first phone call. I complained as I felt this wasn't what I had been told and then they sent me a load of brochures about how mortgages work.
    2. Save £10,000 - goal smashed! We saved it up pretty quickly thanks to the markets doing pretty well last year, some good savings, and rustling up a load of change. Our current savings are around £15,000 not including pensions and some locked up investments.
    3. Take in a lodger - we did this, but it was about a year too late! We have had someone for June - July - Aug, and at £600/month, that's a nice £1800.

    What else happened in the last year?
    My boyfriend became my fiance, and got a nice big raise.
    We did up our kitchen which cost a pretty penny.
    We made £3,229 of overpayments which is not as much as I wanted but still pretty good.

    The bank thing is still confusing, and I think I'm going to hold off overpayments for now, but instead save it in an account. Our mortgage rate is 1.75 % and the Santander account where things are sitting is 1.5 %. So it does result in losing money. So should I not do that?

    My MSE credit report says that my mortgage balance is £304,204 and if my mortgage worked in a regular way, then my balance would be £303,604. It makes my spreadsheet so annoying! I want to set minigoals and work to them but I have no idea how to set minigoals when the bank reduces my monthly mortgage payments ever so slightly, with different decreases for each month. It's a little bit demotivating.

    E.g. I want to say if I make an OP of £3,640, I will be under £300k! But I can't because I don't know what the actual mortgage balance is at any time. No opportunities for Tilly Tidies either, because no online banking.

    The minigoal IS to get under £300k. I also had a goal of getting a 60% LTV when we went to remortgage. I naively said that the house price in London would increase 5% ever year, but it hasn't this year. I have re-done the math to get to 65% LTV to remortgage.

    To do that, I think I need about £3.5 k as well, but it's impossible to know.

    SO!

    The next goal is to get £3,500 ready to either make as one big OP, or do in small chunks. This will bring us to sub-£300k AND by our remortgage date next year we will have a 65 % LTV or better.

    I am also pleased that my boyfriend is now super into saving, and is trying to save up £6k for our wedding next year. He is doing a great job, he is putting £200 per month into the Santander Regular Saver at 5% and he is also saving another £200 per month into a Charles Stanley Direct account. He is paying back our joint account after he borrowed a bit during his cash-flow issues. He also didn't save anything for my engagement ring... but he has now paid that off too. Good progress!!
    Mortgage started at £318,000 in June 2016. Original MF - 2041
    Emergency Savings - £12,737.83/£10,000
    OPs: £3229/£7000
    Side goal: Save £4000 and get that mortgage below £300,000!!
    • Tropically
    • By Tropically 14th Sep 17, 7:17 PM
    • 117 Posts
    • 352 Thanks
    Tropically
    I have some good MFW progress!

    I got a bill from Thames Water on my birthday... saying that our direct debit will be £20/month lower!! Woo.

    I have participated in some market research for £95 amazon vouchers, and I have some more coming up as well. I am debating buying a nice camera with that, but we will see. I have been doing some more mystery shopping and bagged a few lunches.

    This month is looking absolutely dreadful otherwise though.

    A potential caterer for our wedding was doing a 'showcase' dinner and so we went out for a dinner to the tune of £90. Then, the next day, a friend of a friend was doing a restaurant takeover and so we went to that. The meal was affordable, but not the £100 bottle of wine. We got confused with the menu, thinking we ordered a cheap wine and not the special wine. Then, a colleague is going on maternity leave so got her a gift.

    There is also the music festival I spontaneously went to this year....

    Anyway we had a lodger for that buffer. He is possibly moving out in Oct but he needs to sort himself.

    Our boiler is also not really working. It keeps cutting in and out with hot water. I want an engineer to clean the heat exchanger and really hoping they don't say replace. I don't like how some people (usually boiler salespeople) think boilers are disposable and need replacing every few years. I have contacted a few people, and hopefully someone agrees to do it.
    Mortgage started at £318,000 in June 2016. Original MF - 2041
    Emergency Savings - £12,737.83/£10,000
    OPs: £3229/£7000
    Side goal: Save £4000 and get that mortgage below £300,000!!
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