Taka's MFW journey

taka

Hello :hello:

My name is Taka and I'm a MSE addict :rolleyes: :money:

Since joining I have paid off the wee bit of debt I owed and increased my emergency savings to cover my outgoings for 6 months. I'm part of the MFiT challenge (#43 target £11k reduction) and this thread is going to (hopefully) chart my path to MFness

The story so far...

MFiT Challenge start date 1st April 2007
Mortgage £48680
Roof repairs £1320
Renovation fund £6k
= £56k total to go

I had origionally planned to take out a further advance on my mortgage to cover the repairs and renovations but in the end didn't so I'm now saving for them instead! However, the savings targets are included in my MFiT totals.

November 2008
Mortgage £46,547.26
Roof repairs - paid for
Renovation fund - £3k saved £3k to go
= £49,547.26 total to go

Difference = £6452.74 :j in 19 months.

I'm on a fixed rate til June 2012 at 5.78% so the plan was to fill my cash ISA (as the int rate was higher) each year and anything left over would be OP'd to my mortgage. The recent financial turmoil and interest rate changes mean this probably isn't the optimal strategy anymore but I'm very aware my job funding is up in summer 2011 and there will be less funding around thereafter as a result of the credit crunch.

Plans - Nov 08 to end 09
Renovation costs - Save another £3k
ISA 2008-9 - pay in £3600 before the end of tax year - £758-92 saved so far.

I am going to increase my emergency savings a bit more - the £3600 into the ISA would mean I could last at least 10/11 months if the worst should happen. I know I'm sacrificing a wee bit of money to do this but it feels much safer to do in the current climate. The 2008-9 ISA money will probably be paid off the mortgage after my interest fix runs out in 2012 if I manage to secure further funding for my job post summer 2011.

Plans - Jan 2010 onwards
Actually make an overpayment to my mortgage :rotfl: I [strike]hope to[/strike] will make at least 1 OP before the end of the MFiT challenge :rolleyes: :rotfl:

MF date?
I'd love to be MF by mid Aug 2019 as this would have been the end date of my first ever mortgage. My current mortgage is due to finish at the end of 2027 and according to the mortgage calculators I need to OP by £150/month to achieve Aug 2019. If I'm honest I would like it to be gone sooner than that - ideally before I turn 40 in 2015 but that means I need to OP £366/month which is a far larger challenge... :eek:

Anyway... thats me... Oh and apologies in advance for my random ramblings :rotfl:

setmefree2

Well Done on your progress so far and

GOOD LUCK

evab_2

Good luck with your plans x

StuartGMC

Taka
Looking forward to learning of your progress, good luck.

Thanks for the PM; I'll send the spreadsheet in a mo.
Stuart

taka

Thanks for the good luck wishes everyone!

Stuart - Thank-you very, very much! :T I'll be found surgically attached to my computer filling it in for the rest of the evening! :j :rolleyes:

taka

Righty ho... Update time... ummmmm... nothing much has changed :rotfl:

However, I did go into Nationwide today to [strike]interrogate[/strike] speak to a Mortgage advisor about the ins and outs of overpaying. From reading around here I kind of knew some of the answers to my billion and 1 questions but wanted to double check I understood them correctly. :rolleyes: Looks like my options are...

1) Overpayments less than £500 eg £150/pm - These will not reduce my payments but would reduce the interest due and bring the end date forwards "naturally" as I run out of mortgage to pay eventually!

2) Overpayments of £500 - the default is for this to reduce my payments and keeping the same term.

3) Overpayments of £500 - if I inform them I wish this to got towards reducing the term then this will not reduce my payments and would bring the end date forwards.

Number 2 defeats the whole point of being MF before the end of my term so thats not the one to go for but I'm not sure which of 1 or 3 I should do! Realistically I'm not going to manage to pay off £500 every month so I guess it'll probably be option 1. Intuitively I'd say the sooner its op'd the better as the mortgage rate is likely to be higher than I would get in savings till I accumulated £500 to pay off. :think:

The advisor also printed me a copy of the projected payment plan if I do manage to overpay by £150/month and it tallied up nicely with the calculators I've tried. I also clocked that overpaying by this much would almost half the interest charged over the remaining term :j Even more incentive to do this!!

Pooooo... I just thought of another question. Anyone know if I do option 1 will I see my MF date on my online statement coming forwards or will it remain static?

maz123_2

don't know if it helps much but i'm with the Nationwide and try to overpay. some months i've made exactly £500 and i'm on a fixed rate (6.13 unfortunatley) and my end date does not change. the mortgage balance goes down but the end date doesn't I'm hoing that at the end of the fixed rate i'm going to have a wonderful surprise!
I have a similar amount mortgage so i'm looking forward to following how you get on.
good luck!

uzubairu

maz123 wrote: »

don't know if it helps much but i'm with the Nationwide and try to overpay. some months i've made exactly £500 and i'm on a fixed rate (6.13 unfortunatley) and my end date does not change. the mortgage balance goes down but the end date doesn't I'm hoing that at the end of the fixed rate i'm going to have a wonderful surprise!
I have a similar amount mortgage so i'm looking forward to following how you get on.
good luck!

We're on a 10 year fixed rate (4.79%) and we've set up a standing order to overpay £500 per month (for nearly 2 years now).
Last month, for the first time Nationwide sent us a letter telling us that our overpayments gave us the option of a reduction in mortgage payments (£646 down to £599) or a reduction in the term.

We chose the reduction in term, and 5 days later the end date had changed online to reflect the term reduction.

taka

Still no change really I'm just waiting for payday on Friday before I can update my totals...:rotfl:

I have been playing with next years budget... :eek: I'm taking part in the living on 4k a year challenge on the DFW board (with a lovely group of people :T) and have been trying to decide what to set my budget at for 2009.

Currently I have a spreadsheet (or 3 ) listing all the catagories and spends.

currently budget (changes) ...

Food - £130.79/month (reduce this to ~£100/month)
Going out - £76.04/month (reduce to ~£65/month)
Clothes - £27.38/month (reduce to ~£25/month)
Shoes - £13.69/month (no change)
Health - £27.38/month (reduce to ~£25/month)
Hairdressers - £13.69/month (increase to ~£19/month)
Spends - £30.42/month (no change)
Birthdays etc - £15.21/month (increase to ~£20/month)
Xmas - £20/month (no change)
Other bills that count * - £91.97/month (reduce to ~£90/month - depends on insurance renewal quote)
*Gas/elec/TV/House ins/Phone/Broadband/Charity

Total - £446.57/month (£408.11/month) or £5358.84/yr (£4897.32/yr)

(Other outgoings are excluded from the 4k challenge eg council tax/ mortgage/ buildings ins/ Life ins/ work travel/ holidays/ household renovations etc - I will try to reduce/stick to budget on these where possible too)

Difference is £38.46/month or £461.52/year in the right direction which would be good :T Still nowhere near the £4k/year Nykmedia (on the 4k challenge) manages though! :rotfl: I think I'll sign up to £5k for 2009 :rolleyes:

I should be able to reduce my Xmas/birthday budget a bit by continuing to do surveys etc and using some of the vouchers for this too.

I'm not doing too badly for November, December and Xmas this year (famous last words :rolleyes:). I shouldn't need to spent too much on food for the rest of 2008 as I have a full storecupboard and my parents have just gone on holiday so I've inherited a ridiculous amount of fruit and veg that would go off before they came back. I am hoping by freezing some of it and cooking soup/curry/stew etc with the rest it should keep costs down for Dec too. :T I couldn't even fit all the veg in my fridge there was that much :eek: Guess who is bulk cooking tonight :rotfl:

1274

Hi Taka. I'm also a combined MFW/4K'er this year and next. I got confused though on the 4K challenge this year as to what was "in" and was was "out" of the budget. Like, if I bought a sandwich and a drink for lunch as well as some bread and milk for later, I'd have to split the bill, as lunch is luxury and not in the 4K but the bread and milk is. So I'm doing the challenge next year on an all-in basis, 16K for absolutely everything! The bank have just helped me out here by reducing my mortgage payment by £30 a month and I hope the 4K'ers will still let me be part of their gang even on an all-in basis

taka

1274 wrote: »

Hi Taka. I'm also a combined MFW/4K'er this year and next. I got confused though on the 4K challenge this year as to what was "in" and was was "out" of the budget. Like, if I bought a sandwich and a drink for lunch as well as some bread and milk for later, I'd have to split the bill, as lunch is luxury and not in the 4K but the bread and milk is. So I'm doing the challenge next year on an all-in basis, 16K for absolutely everything! The bank have just helped me out here by reducing my mortgage payment by £30 a month and I hope the 4K'ers will still let me be part of their gang even on an all-in basis

Yes they will - some of the others are going to do it that way too I think. I was contemplating this too but its too depressing a number! :rotfl: I may change my mind again but do I then need to count my (potential :rolleyes: )mortgage OPs in this too?

I sadly didn't manage to cook anything other than my tea last night and I won't get home till ~10.45pm (if my experiment goes to time... 11.30pm otherwise) tonight so I won't get much done today either. Argggghhhh 13.5hrs at work in one day is evil. :eek: