Just a few months to go

Thomsk

Hello everyone

I've been lurking here for a long time and it never occurred to me to share my mortgage free story. It's pretty dull compared with many I've seen on this board, but I'm now just a few months away (some time in October is MFD) so I thought this would be as good a time as any.

Ancient history first - I'd bought my first flat in 1990 with a 100% mortgage (remember them?) and it lost 30% of its value by the time I sold it. Thank goodness for 125% 'negative equity' mortgages and the 1990s price recovery. So, by the time we bought our current house in 2000 we actually had loads of equity and only needed to borrow £88,000, although it had to be on a 20 year term because of what we could afford in monthly repayments. Lesson learned - don't panic; property prices go down, and eventually they go back up. Oh, and the flat had an endowment - lesson there was repayment mortgages are the way to go.

We started making overpayments in January 2002 when the mortgage balance was £85,000, and now I sit down to write this and do the calculations I can see they were an additional 75% of the normal amount. Not surprising that only lasted 8 months. Lesson learned - don't try to do too much too quickly.

Although I started a FTSE tracker ISA in around 2002 and continued paying into that every month, we didn't start making mortgage overpayments again until October 2004. This time they were just an additional 45% of the normal payment and we managed to keep that up until July 2006, when the balance was down to about £63,000. The ISA later became important and the lesson learned there was set up a standing order for it every month, budget accordingly and forget about it.

In July 2006 we made a decision about private education and started saving really hard for that. Mortgage overpayments had to stop at that point, but the ISA continued. We later changed our minds about private schools, but by that time we had a big stack of cash sitting in Sainsbury's Bank earning 6%. This would also be important. Lesson learned - sometimes decisions pay off, but not in the way you thought they would.

Luck starts to play a part now. I work for a large firm of accountants, which took over the audit of the company that managed my ISA in early 2007. I work in IT, not the accountancy side, but I was still forced to sell my ISA because of the profession's rules on independence. Actually, if I'd known more about what I was doing I might have transferred it to another manager, but I ended up selling everything in June 2007, not long before the market started its decline to where we are now. Lesson learned - you haven't got a crystal ball, and there are some things you can't plan for.

Anyone still with me? Not long to go now! September 2007, changed our minds about schools. The cash we had saved for that, plus the proceeds of the ISA suddenly looked like a way to get within striking distance of being mortgage free, a prospect that was even more attractive because of what was happening to the FTSE and the economy in general. So we paid £40k off the balance and increased the monthly payment to 270% of the pre-lump sum amount. This is a struggle and we can't have holidays or too many luxuries, but we don't really go without. Couldn't do it indefinitely though.

By January 2008 the mortgage balance was down to £14,500 and it will be gone completely in October. Looking back through these notes I've realised that actually we could have done this sooner if we'd had a proper plan and had stuck to it. However, we will be paying it off 13 years early and saving something like £25,000 in interest charges, and knowing what we can achieve in the way of savings we can move on to the next challenge, which is being able to retire early. But that's another story...

Thanks for sticking with me if anyone is still reading. Hope someone finds something useful amongst all this!

Thomsk

tuggy

Thank you for that! I found it very interesting.

I liked the "lessons learnt"

Looks like you had part luck, part "skill" and you'll end up in a great situation! As soon as the mortage is finished, like you say, channel the amount you would have paid monthly into savings. If you just let it sneak back into your pocket you'l spend it on crap and have nothing for it!

Well done again!

Starz_Ceilings

I would just like to say well done - it certainly looks like you learned a few lessons along the way!

dimbo61

:j well done to you and your OH
I am working hard to achieve the same thing
We have a whole forum to all the MFW,s
Invest well after you have paid off the mortgage and enjoy a long
and comfortable retirement.

princessdaisy2k

I stuck with your story and it is really encouraging and life does go up and down and sideways and you are not in control of the ecomony and you can only for watch for signs. I am one of the many trying to become mortgage free and your story is extra encouragement.

bockster

well done you. great feeling isn't it. we did it earlier this year, i think, 14 years early. i like siting in my chair of an evening and thinking everything around me is 100% equity! strayed recently though on couple of hols, new kitchen and july is a big bill month for us, so offset a/c got raided. so we are mfw,s again for a short while. i suppose the good side of that is we get that great feeling all over again;)

Thomsk

Thank you so much to everyone who has replied. I am now looking forward to building up the savings and investments again. Too late to write any more tonight...

Thomsk

Lilmil

Well Done Thomsk
It's great to hear MFW stories of others it gives us all the hope that it can be done!!!
Lilmil

shirlgirl2004

I love an inspirational story. Well done :beer: .

Hopefull we won't be too far behind you.

purplevamp

Well done Thomsk.:j I'm saving for a deposit for a house, which we won't be able to even start looking at for at least 2 years as my hubby is still studying. Once that's finished we'll house-hunt, THEN we can aspire to become MFW's - your story is an inspiration to all. :beer:

seven-day-weekend

Congratulations on your imminent mortgage freedom and I love your account of all the lessons you have learned along the way.

Don't forget to add your story to the Mortgage-free Roll of Honour discussion on this board when the big day arrives!