How do I get started

jackie_w

Hi There,

I have been reading alot of the posts on here about being mortgage free. My DH and I have quite a large mortgage (£188,000). We moved to our new house in May 07, and currently have just under 24 years to run.

Dh doesnt think it is worth while paying of mortgage, but, should be putting money by in a savings account. I disagree to come extent. I think we should do both. We dont have too much debt, a credit card which will be paid off in a couple of months. At the end of every night, I have started to take the change out of my purse, and put it into my piggy bank, so, this will stop me frittering the money away, so, I thought that I would keep saving that and at the end of every month, pay that towards my mortgage (hey it might not be much, but, every little helps). I can pay 10% of my balance towards my mortgage.

When Im paying my mortgage, is there anything I should say to the mortgage people, or will they know what to do IYSWIM.

Is there anything else I can do which would help me get more money to pay towards my mortgage. Ive joined quidco, but, TBH I cant make out if this is the same as Pigsback or not. My household ins is due, but, Quidco was dearer than my current insurers, even with cashback.

Any tips, suggestions would be greatly welcome.


Jackie

scottytrotter

Hi Jackie,

one thing which I've found really helpful is a spreadsheet - I think there is one in one of the sticky posts at the top of the forum. If you type in all your figures, including your mortgage amount and interest rate you're paying, you can work out how much sooner your mtg would be paid off depending on how much you overpay a month.

I find it pretty inspirational (sad as I am) to type in different figures, see how much interest it'll save me, how many years early I'll be free. Helped me settle on how much I wanted to overpay, and certainly focuses the mind - might help convince your other half too!

Oh, and personally I'd give your mortgage company a ring and let them know what you're doing. I don't know if it's a requirement but just helps reduce confusion etc

Good luck!

setmefree2

Hi Jackie,

Do you currently have any rainy day savings? It's a rule of thumb on MSE that people feel you should have at least 3 to 6 months rainy day savings before you start paying of your mortgage. Also it's Martin's view that you should use your annual allowance for a Cash ISA before POYM - for you and your hubby that is £7,200. The reason being that this gives you a tax free income every year, which if not used is lost. I always find it useful to think of my net debts ie my mortgage less my savings.

Everyone is different - you might feel more motivated to pay of debt than save. In the end it's whatever works for you. If you feel motivated to POYM then Good Luck and you will get lots of support here.:T

moanymoany

The first thing to do is to make sure your housekeeping is frugal to the bone. When we started the frugal life we cut our housekeeping/petrol/spending money bill from £550 a month to £250. The £300 was saved. We also did a day of going through everything and saved £200 a month. This included going onto freeveiw from Sky, getting 1899 phone - all the usual suspects.

All cash presents, bonuses (dh equivalent to 2 weeks salary) and money we saved went into the savings.

To our absolute amazement at the end of the first year we had £12,000. This was because, as we went through the year we got better at frugality. I learned new ways of meal planning and frugal eating from Old Style. Before we bought anything we really thought about it and often didn't buy.

So, if you did this and saved £10,200 a year, after the first year to fill your ISA you will have £2,000 to put on your mortgage. The interest from your ISA can also be paid off.

In 10 years you will have saved/paid off 100,000 - + - what you have paid off by you usual payments.

I can tell you that the freedom having no mortgage gives you is priceless, certainly something worth striving for.