33 years left on the mortgage, gonna start my MFW log now!

johncolescarr

My fiance and I bought a house in 2007 on a 100% mortgage over 35 year term. At the time it was all we could afford and family/friends were all touting how getting on the property ladder ASAP was a good move.

Of course, with hindsight this was not such a good idea since we bought at the cusp of the the housing boom and subsequently are now (temporarily I hope) in negative equity (about 10%). With no deposit, we had no equity. I hope that in the long run our mistake with financing our first house is corrected. Our saving grace is we managed a fixed deal for a reasonable period since my OH is a pharmacist, a good risk criteria I suppose.

Soon after our realisation, I set my goal of becoming mortgage free as soon as we can, current projections are 22 years but as we earn more I hope this goes down! We are both young and at the beginning of our careers so even since buying our house, our situation has improved. We fill up cash ISAs for both of us each year and anything over this amount we overpay the mortgage, around £120 a month at the moment, but each pay rise/bonus we get goes straight towards the mortgage (we are trying to finance a wedding in 2010, also want to build an emergency fund just in case, hence the ISAs). My mortgage lets me overpay 10% a year (which we dont even get close to at the moment, but heres hoping!

At 27 years old, I would really like to clear this debt by the age of 45, maybe even before, but I fear we will want to move house as soon (if) as we can recover the value of our house and make remortgaging easier, our next property will no doubt be more expensive as the need for extra bedrooms to accomodate kids looms (withing next 3-4 years), plus a move closer to family.

So this is the start of my log - I will try to give annual updates in order to encourage myself along my MFW path.

Kez100

We were a FTB in 1991 and moved up the ladder in 1994. We kept the mortgage term the same, so the 25 years mortgage we applied for 21 years when we moved. Yes, we borrowed a bit more, but the difference in term didn't make much difference at all.

We also had NE when we moved in 1994. We had to save ourselves out of it between putting the house on the market and exchanging contracts (took about 9 months) We wished we had saved earlier as you have - it's a good move. (Mind you it was difficult to save when IRs were 14%!)

hughmungas1986

Stick with your ideas, sounds like you have a decent plan.

Good luck with paying it off sooner than the original term

hugh

StuartGMC

Best wishes with the plan, it is a long journey in good or bad times. We bought in 1994 (at 29yrs old), couldn't do so earlier due to prices plus redundancy in 1992... but, we always overpaid. As Kez notes, interest rates were high and it was difficult to overpay by much, but, it all helps. Wife went part-time with the birth of our daughter in 1997, just three years into the mortgage and we had to back off OP to what we could afford, but with interim change of mortgage with lender, small increase in mortgage to install new windows & doors, then move to offset in 2006 we "found" we had saved 3yrs 4months on the mortgage in terms of going forward.

We took out 10yrs term in June 2006 but, as per my thread here, we hope to possibly pay off in October 2009 (15yrs total for the mortgage) or February 2010 latest, when we are both 45.

You've started well. Try to keep records of the "baseline" mortgage so you can always compare your current position with it, as this will help to reinforce the sense that you are making progress. We ditched our paperwork when moving lender so can only really see the progress since 2006

Set a few small targets along the way, but, above all, do also have "a life" too; it is a very long journey and you don't know what is around the corner, so balance the long term early repayment objective with the need for holidays etc too.

I wish you both well on your journey.

johncolescarr

Thanks for all of the support and advise, it can really daunting when you see your deficit growing, try not to but its really hard not to look at sites like zoopla to see the valuation.

Interest rates of 14% would cripple me! Grateful that its not the same this time around.

Lynn11

Good luck on reducing your mortgage from 33yrs. We have been overpaying over the last 3yrs and seeing the mortgage amount reduce, which is good. We have not reduced our mortgage term yet as hopefully in 2011 if the market picks up we hope to move a larger house (if we want more kids) but if we have paid off as much off the original amount before adding to it and then we can think about reducing the term. As everyone says enjoy life and any family you have in the future.

setmefree2

Hi John

to MSE . We bought our first propert in 1987 and sold it in 1993 for £500 less than we bought it:rolleyes: ....

Good Luck with your mortgage free journey

SMF2

abouttimetoo

Hi John

Welcome to the MFW board and good luck with your plans, I wished I had started as young:rolleyes:

I see you mention giving annual updates, good luck with that one as this board can be come quite addictive:rotfl:

StuartGMC

abouttimetoo wrote: »

I see you mention giving annual updates, good luck with that one as this board can be come quite addictive:rotfl:

...is it really, I hadn't noticed that effect
:rotfl::rotfl::rotfl::rotfl:

johncolescarr

I have just started to regularly overpay my mortgage. Going to start at a meagre £80 a month but hoping to increase this to £240 p/m in the next few months. At this rate, I save 15 YEARS on my mortgage saving £77,000. This is phenomenal. However, I am aware that my circumstances may well change that could reduce or increase this amount.

RosieTiger

Your circumstances might change in the future, but the great thing about overpaying now is that it's a known and measurable benefit.
Focus on 15 years earlier and £77K in your pocket and it all makes very, very good sense !
Look at the stories on this board and remember the old adage that a journey of a thousand miles begins with a single step - so £80 isn't meagre !
Good luck