Pixelwife MFW - Overpayment Diary

pixelwife

I've been crunching numbers today to see how I can smash the mortgages. It's demoralising to think I'll still have at least 1 of the 3 mortgages in about 13 years! But then my numbers are huge.

At the moment, we put any spare cash into the mortgage overpayments but have no cash savings and this feels like we're not giving ourselves any safety net.

Should we fill ISAs first? Keep going with overpayments? Overpayments are all going on the highest interest rate mortgage so I'm keen to hit the next milestone by getting that down to 5 figures. It's currently about £107,000.

We are also doing some work on our house and that's going to cost a good few grand so that's going to mean the overpayments take a hit.

Anyway, I guess I'm just asking what would you do in my situation? Any ideas, motivation etc welcome.

bownyboy

Hi Pixelwife,

After 2.5 years of throwing most of my spare cash at the mortgage I too have had second thoughts about not having much of a cash or rainy day cushion.

So I decided from this month to split my overpayments. £500 every month goes to overpaying the mortgage and £500 goes into a mix of stocks & shares ISA and cash ISA.

My aim is to be mortgage neutral in the same timeframe. Gives me some piece of mind in having access to cash but of course you have to be much stricter with yourself and not dip into the cash!

In order to get through the long journey I set myself lots of mini targets to do with payments left, percentage owned, daily interest, where would I be without overpayments etc. It helps psychologically.

Good luck with your (mahoosive) journey!

pixelwife

Thanks for the advice bownyboy. I've just setup a stocks and shares ISA for myself and once I've got myself familiar with it, will get hubby to do the same which means we can get a tax free safety net of around £22k by April 2014 which I think will help us to feel a bit more secure. As someone with a fair bit of trading experience, I've gone self select which I hope I don't live to regret!

Need to get some stuff onto eBay today and when that sells that'll go against the mortgage as overpayments!

pixelwife

So things have changed again, I've just found out I'm pregnant again. Early days and not getting hopes up as had a miscarriage earlier this year but it means more than ever I need to get organised.

Off to get up to date figures for my signature!

pixelwife

OK just made a little overpayment on top of my usual mortgage payment and the amount has come down nicely. I also have a small amount tucked away in a Stocks & Shares ISA which gives us a little bit of a safety net although I really need to up that considerably given the current circumstances.

Been feeling really poorly the last few weeks with morning sickness but I'm 9 weeks now so hopefully I'll be back to full energy soon to crack on with killing as much of this debt as I can before baby makes an appearance!

pixelwife

Time for another update from me. Now 16 weeks pregnant - I can't believe how quickly it's been going!

My intention now is to overpay my mortgages each 1 year ahead so I can enjoy some maternity leave without worrying about having to take big dividends from my company.

So far I've paid 1 month ahead on one mortgage and starting to pay against a payment due on 30th on mortgage 2 of 3.

I've got a couple of residual income streams, so on good days this means I can make daily little overpayments but like anything it's in fits and starts.

I'm now questioning the money I have in the S&S ISA. Only had it 3 months (self invested) and it's made over 4% but still thinking I'd feel better if it went against a mortgage balance.

Any thoughts?

MissOptimistic

Hi Pixelwife - Ive enjoyed reading your diary & I can sympathise with your struggles having your own business throughout the recession & also with the mortgage arrears. OH & I have a BTL and ran into arrears last year when the tenant refused to move out & stopped paying her rent, it was only for a few months, but stressful enough!
We now run it as a HMO as its 6 bedroomed, much more profitable & odds of all the tenants not paying at once are slim, but it also takes more managing. Luckily OH and I work together with that & also running our online retail business which has been slow throughout the last couple of years but we're managing.
Good luck with your pregnancy & don't leave it too long before you update

pixelwife

Thanks for the reply MissOptimistic. I don't get many on my thread!

I know exactly what you mean about the non-paying tenants, we had some of those a couple of years back who trashed our beautiful BTL and it took 9 months, court orders and bailiffs to get them out but fortunately we have much more reliable tenants now!

MissOptimistic

Thats good to know about your now reliable tenants
Do you find it difficult keeping on top of the related admin with so many houses? I need to keep on top of it, although we have only one BTL, it has 5 paying tenants plus we're responsible for all the bills so it seems a lot more.
Hows business for you in 2014? They keep saying that the economy is recovering at a rate of knots, but Im not convinced yet