Hi there - newbie with a question.

Pinky15

Hi there. Just to quickly introduce myself I am married 29 years old and have 3 little ones 7,4,1. I am currently residing on the DFW board but hopefully will move over to this one asap lol!!
We have a good fixed rate mortgage at the mo which finishes in 3years, however at the mo we can only make overpayments of 20% which we do. When the fixed rate ends what type of mortgage do we look for that will allow us to make greater overpayments or is this something we ask the bank. We have a term of 12 years left and as from summer next year could overpay be another £500 per month.
My long term aim is to pay this off and buy a small place abroad to do up as we get older and I would love to buy my own horse. I will only do this once my mortgage is paid off so it certainly spurs me on.
Thanks in anticipation for any advice x

StuartGMC

Pinky
Welcome and congratulations on tackling the finances via the DFW. Before you plough a lot of cash into the mortgage, have you already set your emergency funds to one side (typically 3-6-9months income depending upon the degree of security you have in your jobs)?

If not, do this first. I'm not sure if your £500 per month extra has been based on a detailed assessment of future needs, but if you are on the DFW then I assume you have already considered via detail all monthly and annual costs (inc child care, school trips etc).Thereafter ensure you have considered all the "predictable" costs for future years covering pension, holiday, replacement items (car, white goods, PC etc), DIY, any major items needed (new bathroom, kitchen), windows etc. With timelines for each you will know exactly how much you need to save each year towards them. Also have your contigency arrangement (I've just had electronic problems on the car which will be more than £500 extra spend this month to repair!).

In considering the mortgage, look at OP restrictions and ERCs as you seem like you will be paying off early with this basis, then you need to consider what is available in the (very limited) present market which will fit your needs (tracker, offset, fixed etc). However, the situation will probably be very different in 3yrs time, so look at the various offers now and their limits. Consider your planning now to put that extra £500 aside so you can use it to pay off a lump sum in 3yrs, or drip feed as OP or indeed choose to offset it. Some offsets allow you to have Cash ISAs set against the capital which you may want to look at i.e. get tax free interest now, and have them offsetting but remaining in the tax-free wrapper so they are still there after the mortgage?

HTH a little with some discussion
Good luck in your plans

Dithering_Dad

I agree with Stuart's point on the building up of emergency saving, but would also add that you should then look at your pension provision to make sure you live in your mortgage free house comfortably when you no longer have an income from working.

Your house will be paid off anyway in 12 years time whether you make overpayments or not, however a zero value pension pot will still be zero if nothing is paid into it over the next 12 years.

Pinky15

That's a really good point about saving for contingencies etc. Once our CC and Loans are paid of we might add that to the saving pot to get it bumped up a bit. The £500 will be fine to pay off as it then leaves us £950 still per month for food, entertainment etc.
I am also looking into pensions as mine is frozen since I left my county job. Thanks for all the help - hopefully the mortgage market will be better soon x

Radish72

Good Luck Pinky

You seem to be almost on top of everything, just need to sort out the pension

I look forward to reading your progress