2010 MF Wannabes

uzubairu

SmileyG wrote: »

Good luck with those overpayments. I would suggest getting that term reduced as sson as possible. It's gonna cost you a fortune. The first 5-10 years is like rent!

SmileyG

Tell me about it.
Every little helps.

If we'd stuck to the regular payments (on our £113K mortgage), after 4 years (July 2010), the balance would have reduced by just £10K with total payments of £31K. :eek:

fluffysox

uzubairu wrote: »

Tell me about it.
Every little helps.

If we'd stuck to the regular payments (on our £113K mortgage), after 4 years (July 2010), the balance would have reduced by just £10K with total payments of £31K. :eek:

Couldn't agree more. In the first year of our mortgage (originally 118500) we managed to overpay about £500 and this was difficult to do but our mortgage was 100% of the property value and I was keen to save as much on the interest as we could. The mortgage was over 25 years but we'd borrowed 4 x my salary plus 3 x my partners salary.:eek:
The mortgage payments at that point were a huge proportion of our combined monthly income so we were pleased to overpay anything. Also that year the bathroom needed completely redoing including new joists under the floor, new window, new electrics, new plumbing new ceiling etc so we were pretty broke.
However since then interest rates have fallen from 5% to 2.5% so the basic payment has dropped significantly also our income has risen. :T
We're now 5 years and 2 months into our mortgage and without OPing would have just under 10 years left- I'd be nearly 40. I'm determined to OP as much as we can before interest rates inevitably rise at some point or our circumstances change. We'd like to have start a family soon and I wouldn't want to be working full time with young children. We don't have any other savings but we can access the OP reserve at any point with a couple of weeks notice.
Also my OH is likely to lose his current job by the Autumn so there is greater need to save now. I can make the payments from my salary but won't have "spare" cash to OP

pigtails_21

SmileyG wrote: »

Mortgages over 25 years.... That's scary!

Good luck with those overpayments. I would suggest getting that term reduced as sson as possible. It's gonna cost you a fortune. The first 5-10 years is like rent!

SmileyG

I agree completely - it's very scary :eek:

When we took our mortgage out our combined income was £35k, with huge nursery fees..we're now earning nearly 50k (I qualified), and in a few months time no nursery fees..

So far we've overpaid by over 2k in just over 6 months - it's not much but we're committed to it, and it will make a difference in the long run.

This is probably a dim question, but would reducing the term make much difference? My standard monthly payment is 300, and I've just increased our overpayment to 350. We're on the SVR (not sure what %). If I was to reduce the term to say 25 years, what difference would it make. I know the monthly payments would go up, but would it be beneficial in terms of getting the mortgage paid quicker? I'm such a MFW newbie, so really grateful for any help from those of you with more knowledge..I just always thought that our overpayments go straight off the capital, so thought this would be the same as having a shorter term, because we are getting the outstanding capital amount down quicker...Hope that makes sense I am very new to the idea of MFW and know I have so much to learn..

pammyj74

IHateDida wrote: »

Does anyone else's mortgage provider send a letter acknowledging any overpayments made?

Even if I OP an extra £1 - they send me a letter - EACH time!!!! What a waste of money!!!! (this is Woolwich or I guess Barclays as they became!).

Just wondered if anyone else received these unnecessary confirmation letters?:o

I wish I got a letter, once a month would be nice!

My mortgage would have finished in 2031 (21 years) but have OP'd over £5k in total last year and this year. It now ends Jan 2022, next month if I OP £200 it will go over to Dec 2021 and another month shaved!
I have just under 12 years left at the moment but want to get it down to 9 years so another 3 years to shave off.

Good luck to you, it seems like a mountain to climb but there are so many success stories here that make me strive on.
I too wish I had started this earlier.

pammyj74

pigtails_21 wrote: »

I agree completely - it's very scary :eek:

When we took our mortgage out our combined income was £35k, with huge nursery fees..we're now earning nearly 50k (I qualified), and in a few months time no nursery fees..

So far we've overpaid by over 2k in just over 6 months - it's not much but we're committed to it, and it will make a difference in the long run.

This is probably a dim question, but would reducing the term make much difference? My standard monthly payment is 300, and I've just increased our overpayment to 350. We're on the SVR (not sure what %). If I was to reduce the term to say 25 years, what difference would it make. I know the monthly payments would go up, but would it be beneficial in terms of getting the mortgage paid quicker? I'm such a MFW newbie, so really grateful for any help from those of you with more knowledge..I just always thought that our overpayments go straight off the capital, so thought this would be the same as having a shorter term, because we are getting the outstanding capital amount down quicker...Hope that makes sense I am very new to the idea of MFW and know I have so much to learn..

If you reduced the term by say 5 years then you would save 5 years interest so definitely worth it. as in my previous post I reduced my term by 9 years and cant imagine the amount of interest I have saved. This was just upping my MP by £100 and going down to SVR 3.5%

with the halifax they dont automatically reduce the term with your OPs and they would reduce your monthly payments instead so I have to ring them and get them to reduce the term so I pay the same as I was before or maybe slightly more.

pigtails_21

Thanks pammy - I've just been reading through your diary..I'm an accountant for my sins (CIPFA), so if you never need any help, let me know - it's good practice for me as well xx

I'll look into reducing my term, as anything to achieve the ultimate MFW dream..

pammyj74

I can't believe how many accountants are on here lol, there must be at least 5 that I know about!
Thanks for the offer, I may take you up on that! I might start an accountants help thread and get you all to subscribe so yu can answer my dumb questions lol

gallygirl

Pigtails, Pammy is right - however overpaying by the same amount would have the same effect. The advantage of doing it as a term reduction is that it then becomes the norm so you budget for that, then make extra payments on top of that. If you go down that route make sure your lender would allow you to revert in case of an extreme change of circumstances.

Good luck :j

cha97michelle

Term reduction in my case at least will help me avoid an early redemption charge. If i have more than 10 years left when i pay it off i have to pay £90. Not a lot, but still my £90, so i am trying to avoid this. I still have a way to go though. About 8 years of term reduction.

wynnvegas

Hi Pammy,

I've been inspired by your mortgage shaving idea! Just worked out that, by our mortgage free date of 01/12/10, we'll have shaved a not inconsiderable 209 months off our intial mortgage! Just a shame I've no room on the signature left to add this bit on!!

Cheers,

Billy