Mortgage Free ASAP

setmefree2

those figures are looking great :T:T:T:T:T:T

dexter_fan

Well Done :j

Frozenace

I was thinking about the possibility to get a masters degree or business school or something... but I don't think I'll be able to fund it for another 2-3 years...

lamorna23

We're looking at being mortgage free as soon as we can, at the moment it looks like we could do it in three years. I relatively simple question but I can't really work out what the best thing to do is. These are the facts.

Mortgage £84,500 rate of 5.49%. We have paid the maximum 10% overpayment allowance for this year, the next year being Feb 2010. We have £25,000 in savings. We are maxed out on ISA's albeit at a low rate of 3.5% so currently we're losing out as the savings rate is lower than the mortgage rate. The question is do we overpay £25,000 and pay a 6% fee to reduce the overall mortgage or do we continue as we are and build up the £25,000.

Queen-Bee_2

lamorna23 wrote: »

The question is do we overpay £25,000 and pay a 6% fee to reduce the overall mortgage or do we continue as we are and build up the £25,000.

Hi Lamorna - thanks for reading my diary.

Some people on here are spreadsheet fiends and could probably answer your question in a trice.

Unfortunately, I'm not one of them. My approach would be more pragmatic. I too incur early repayment penalties if I repay more than my allowable amount per year (in my case 5%). This was inconvenient because I wanted to repay more. However, when I raised this with the building society, I was allowed to shorten the term of the mortgage (at no charge), which meant that by default, my monthly repayments increased.

On a temporary basis, I shortened my mortgage term from 17 years to just under 2, which increased my monthly liability to around £4k. Once I have paid off a sizable chunk, I will extend the term again and start paying less per month. Because my new payments do not count as 'overpayments', if I found myself short on cash, I couldn't draw down on them in the same way, but that doesn't bother me - my primary aim is to get the headline figure reduced as much as possible.

Might be worth having a word with your own BS to see if they operate a similar system.

Good luck!
QB

Queen-Bee_2

Frozenace wrote: »

I was thinking about the possibility to get a masters degree or business school or something... but I don't think I'll be able to fund it for another 2-3 years...

Hi Frozenace - my problem is that I already have a Masters degree - that is why I have to pay higher fees. If you don't already have one (or a Doctorate), the fees are a lot lower - hope that helps - QB

lamorna23

Queen-Bee wrote: »

Hi Lamorna - thanks for reading my diary.

Some people on here are spreadsheet fiends and could probably answer your question in a trice.

Unfortunately, I'm not one of them. My approach would be more pragmatic. I too incur early repayment penalties if I repay more than my allowable amount per year (in my case 5%). This was inconvenient because I wanted to repay more. However, when I raised this with the building society, I was allowed to shorten the term of the mortgage (at no charge), which meant that by default, my monthly repayments increased.

On a temporary basis, I shortened my mortgage term from 17 years to just under 2, which increased my monthly liability to around £4k. Once I have paid off a sizable chunk, I will extend the term again and start paying less per month. Because my new payments do not count as 'overpayments', if I found myself short on cash, I couldn't draw down on them in the same way, but that doesn't bother me - my primary aim is to get the headline figure reduced as much as possible.

Might be worth having a word with your own BS to see if they operate a similar system.

Good luck!
QB

Thanks for that I see what you've done, it sure beats paying a fee and still means you'll be mortgage free sooner, I'll check with our BS. Thanks again.

Queen-Bee_2

The End of the MSE Beginning and the Beginning of Other New Beginnings
What with the start of term and the need to start ramping up my search for a part time job, my MFW activities have been forced to take something of a back seat recently. That said, regular progress reviews are rather like affirmations – they’ll help reinforce my new MSE habits and hopefully, underline my belief in what I am trying to do.

As explained in one of my previous posts, now I’ve implemented a series of primary changes, it’s almost inevitable my MFW diary will start to become more mundane. Nevertheless, it’s good for the record (and helpful to me), to reflect on what I’ve achieved and where else my efforts could be focused.

A couple of days ago, I put the final touches to the new floor in the spare room’s en-suite bathroom (silicon edging round the base of the pedestals and bath panel), and installed a brand new Ikea chair and coffee table.

Actually, I’d bid for a chair on E-bay, but when I arrived to collect it, it wasn’t the same colour as Ikea’s current birch items (I’d checked before bidding), was rather older than the picture had suggested and had a cover which I’d have needed to replace. Fortunately, the vendor had another buyer knocking at his door and was happy not to sell to me… otherwise, I’d have returned with a chair that annoyed me every time I looked at it. After that, it seemed like a better idea to simply buy a new one.

I’ve got a booking for another focus group next week, the reward from which I’ve ear-marked to offset the cost of the new chair.

So… My spare room is now ready to let. All I need to do is take some pictures to post on the net to advertise it. Last week, a friend loaned me an old SLR camera with a fish eye lens to capture some good all-round images. I thought I’d done the job properly, but on bouncing into the shop to collect the photos this afternoon, I discovered the film hadn’t caught or wound on properly and that I’d left an unexposed film with them to be developed. Doh!

Finally... The kitchen lights. Oh what a saga. Having convinced myself that I was more than capable of putting them up on my own, I removed the old ones (carefully disconnecting the mains first) and then got out the drill to prepare the ceiling for a couple of rawlplugs. Unfortunately, it’s an old house and it turned out that the ceiling paper was the only thing holding the plaster together. The second hole promptly coalesced with the first, and I was showered with plaster. :eek:

Fortunately, the friend of a friend who happens to be an electrician, came and bailed me out. Less fortunately, after he’d finished the job, I discovered that the new fittings don’t emit the same amount of light as the old ones and are too dark. Hence I’ve now bought a new set, and am waiting for him to come back and swap them over.

In the meantime, I repainted the entire ceiling, just to freshen it up. The kitchen itself is about 30 years old, with a nice brown plastic oven and microwave – very 1980s style, but that’s the way it’s gonna stay for a few years. By the time I’ll be afford to replace it, it’ll probably be bang in fashion again.

Goodness, I’ve just realized the length of this post. It was only intended to be a short one! And now it’s terribly late. Ah well… I was going to end up with a list of things to do. Right now, it boils down to two things:
1. Getting that room let, and
2. Sorting those kitchen lights out

QB

StuartGMC

QB
Best wishes with the next steps, as always, you're action orientated so go reach for those goals!

Mortgage_Reduction_Novice

A good focusing post there... nightmare about the kitchen lights, so frustrating when one actually gets the motivation only to find out that it wasn't to be a straighforward job.