is there an idiot's guide to MFW?

jemw

Hi Everyone

Title says it all really!! I was just wondering if there an idiots guide on how to become mortgage free?

We are FTB, with a 10 yr fixed @ 5.95% (Co-Op) and are 18 months into it. We have already exhausted our overpayment fund and cannot offset anymore until 01 January 2010.

However, I have just started a new job with more pay and would like to save about £500 per month:money:. What's the best way to reduce our mortgage?

Thanks in advance

Floxxie

Hi there and welcome!

No there isn't an idiot's guide as we all have different circumstances and mortgages.

I have no idea about what you can and can't do on your mortgage but could you reduce your mortgage term, thereby increasing your monthly payment? You could then incorporate the extra £500 within your normal payment?

StuartGMC

Welcome
As Floxxie says, there's no guide per se but there are some general recommendations which stem from having a very clear and accurate knowledge of your expenditure and requirements for future spend. Thereafter it is very much a case of taking time to look at some of the threads, identify things people are doing which appeal and then starting to set up your personal approach. Those of us who love spreadsheets do try to encourage everyone to do likewise of course....

Regarding your post, I assume you meant overpayment not offset? If you have a fully detailed budget which covers pension, savings for known costs (holiday, replacement car) and your emergency funds (3-6-9 months expenditure), plus allowance for some enjoyment along the way, then you can look to pin down your OP and as Floxxie notes, take action which allows you to increase the rate of repayment.

Best wishes on this marathon journey and remember to have some fun along the way too.

fiddling_flower_petals

I have a mortgage with the Co-operative bank too, and as far as I'm aware you can change the length of the term of your mortgage at any time. Thus increasing the mortgage payment and decreasing the years left, one of the draw backs being it's not paid into overpayment fund and therefore not able to use the draw back facility.

Good Luck in you MFW quest

ETA ;- Sorry didn't notice Floxxie's last sentence.

LilacPixie

a few banks, halifax is one i think have a regular saver that has a decent rate of interest if you literally can't put money anywhere else.