How to be mortgage-free, prosper and increase

seven-day-weekend

Hope this helps some people, it's just my story!!

One: we bought a house we could afford on ONE salary. I know it's not as easy as that these days, but the lesson to be learned, I believe is, don't go in at the top. Lower your sights a bit - have a house in a slightly less desirable area, or consider a flat instead of a house. One thing not to compromise on though...it has to be big enough for you not to have to move. But try to get something that is suitable without being stretched to the top of your limit.

Two: We didn't move ! Even when we had more in the way of salary and equity in the property....because we'd bought big enough in the first place we didn't need to move, therefore no addition to the mortgage.

Three: Overpay if you can. If you haven't increased your mortgage significantly, you should be able to do this.

Four: After eighteen years, this house belonged to us outright with no mortgage.

Benefits:
Because the mortgage was not stretching us to our limit, by the time our son was born I was able to take time out to look after him (thus saving childminding fees).

When my husband was off sick for a considerable length of time, because the mortgage was (by this time) tiny, we could afford to pay it, without running into debt.

When the mortgage was finished, this coincided with my going back to work full-time and we were able to afford a mortgage on an investment property. We sold this several years later and made around £50k profit as well as having the rental income for the time we owned it.

If you have an elderly relative with a council house, pursuade them to apply for Right-To- Buy. We did this with my husband's mother, we paid for the property , with a proviso of course that she could live in it as long as she wished, she signed it over as soon as she could, and when she died we sold it and bought a house in Spain with the proceeds.

Also, if you have the space, have a lodger. You can charge up to around £4.5k a year without informing the Tax man. We've had several over they years, and especially when I wasn't working, when we were living on a student grant, and when my husband was off sick, they have really helped us to be able to manage the finances without getting into debt. And if you are lucky, they are also built-in babysitters!

These tips are what we found worked for us. I hope they are of use to somebody else.

MikeLB

seven-day-weekend wrote:

Also, if you have the space, have a lodger. You can charge up to around £4.5k a year without informing the Tax man

I would strongly advise against not telling the tax man about lodgers, even if you owe nothing to them at the end of each year. You are legally obliged to inform them of this under the 'Rent a Room' Scheme.

seven-day-weekend

OK, to clarify, here are the rules for

lodgers.http://www.landlordzone.co.uk/lodgers_rent-a-room.htm

trackaccessgirl

I know lots of people who have rented out rooms to lodgers, who have got OVER 4.5K from it and still haven't told the tax man. I'm not advising breaking the law or anything, but it is common they people don't report it. My mortgage states that if I rent I must tell my mortgage company and they would increase my lending rate if I did, so I personally wouldn't tell.

homersimpson_3

Hope this helps some people, it's just my story!!. One: we bought a house we could afford on ONE salary. I know it's not as easy as that these days, but the lesson to be learned, I believe is, don't go in at the top. Lower your sights a bit - have a house in a slightly less desirable area, or consider a flat instead of a house. One thing not to compromise on though...it has to be big enough for you not to have to move. But try to get something that is suitable without being stretched to the top of your limit. ....

Good advice- inspirational story etc -but the reality is the vast majority of people unfortunately could not afford to buy house/flat on just one income.

Gray0103

seven-day-weekend wrote:

Hope this helps some people, it's just my story!!

One: we bought a house we could afford on ONE salary. I know it's not as easy as that these days

Thats exactly what my wife and I did when we bought our house last year.

jonnydoe

Thanks for the advice and well done paying the mortgage off early.. Inpiration to us all..

Although, again this relies on a good salary to afford a nice place in the first place. The part about not moving is good advice, as this can cost the earth.. but situations change ie boy meets girl, have kids need more rooms etc etc..

What we really need on this forum are tips on subjects like:

1) Very competitive mortgage deals or advice on the best ways of paying a mortgage off ie (repayment or interest only/cash isa)

2) Ways to save money elsewhere, insurances, utilities, food , petrol all the things that make a real difference and have saved me £50 mth which I overpay into my mortgage for doing nothing but switching a few companies..

3) Ways to make more money on the internet (to increase salary)

4) Paying off store cards/ credit cards before touching the mortage as these have higher interest rates or vice versa paying absolute minimum on student loan as this is very low interest

Maybe I've been pretty savvy before joining these forums as I can safely say all I've saved in the time being here is £30 from empire stores and got 2 crappy plants from them lol

I have yet to save myself any considerable amount of money and facing the harsh reality that to be mortgage free early there are 2 options:

1) Increase salary through training / career change
2) Decrease outgoings (mortgage,bills etc..)

Thanks for reading my rant,

JD

billy_bulldog

seven-day-weekend wrote:

Hope this helps some people, it's just my story!!

One: we bought a house we could afford on ONE salary. I know it's not as easy as that these days, but the lesson to be learned, I believe is, don't go in at the top. Lower your sights a bit - have a house in a slightly less desirable area, or consider a flat instead of a house. One thing not to compromise on though...it has to be big enough for you not to have to move. But try to get something that is suitable without being stretched to the top of your limit.

Two: We didn't move ! Even when we had more in the way of salary and equity in the property....because we'd bought big enough in the first place we didn't need to move, therefore no addition to the mortgage.

Us too, but we did this in 1996 when property was still affordable and just about to start rising in value again. The upshot is that our mortgage is only a little higher than our council tax, so being mortgage free does not always mean a great saving on your monthly outgoings. We will not borrow against the rising equity either, so we have a great long term nest egg whilst living in the house that we want.


bb

summerday

Hi Seven day weekend,

Thanks for posting your story, I know what you did wouldn't work for everyone but i personally love reading peoples success stories and find them very inspiring. Keep them coming folks!

Sarah

nearlyrich

jonnydoe wrote:

Thanks for the advice and well done paying the mortgage off early.. Inpiration to us all..

Although, again this relies on a good salary to afford a nice place in the first place. The part about not moving is good advice, as this can cost the earth.. but situations change ie boy meets girl, have kids need more rooms etc etc..

What we really need on this forum are tips on subjects like:

1) Very competitive mortgage deals or advice on the best ways of paying a mortgage off ie (repayment or interest only/cash isa)
There is a seperate mortgage board and several mortgage brokers are members of MSE and will comment on deals available.
2) Ways to save money elsewhere, insurances, utilities, food , petrol all the things that make a real difference and have saved me £50 mth which I overpay into my mortgage for doing nothing but switching a few companies..
Again there are boards for all of these things, utilities, Old Style etc
3) Ways to make more money on the internet (to increase salary)
We do get these from time to time, sadly a lot of Spam appears as get rich quick schemes

4) Paying off store cards/ credit cards before touching the mortage as these have higher interest rates or vice versa paying absolute minimum on student loan as this is very low interest

See the Debt free wannabe and the credit card boards

Maybe I've been pretty savvy before joining these forums as I can safely say all I've saved in the time being here is £30 from empire stores and got 2 crappy plants from them lol

I have yet to save myself any considerable amount of money and facing the harsh reality that to be mortgage free early there are 2 options:

1) Increase salary through training / career change
2) Decrease outgoings (mortgage,bills etc..)



Thanks for reading my rant,

JD

We paid off our mortgage early by remortgaging onto better deals, sticking with the original payment when the rate came down, using bonuses and commission to pay chunks off the morgage rather than fund transitory pleasures although we did have a life and holidays etc throughout.

jonnydoe

NearlyRich,

Yes, I already know that forums cover those points, I was just saying these are good ways to reduce mortgage term covered on OTHER boards, how about some of your own tips for being mortgage free earlier that isn't covered on these boards?

In your own case you say you had commission and bonuses AGAIN this in increasing income.. Is there anyone on this forum who besides having a greater income to pay off the mortgage early can advise on other ways not yet mentioned?

I've yet to see anything on this particular "mortgage free wannabee"
board that actually helps me shortern my mortgage term that isn't cvovered on other boards.. Or is this just success stories from people with good salaries and good timing..

No offence to those on good enough salaries to be able to overpay, but I suspect that people really wanna hear other solutions, maybe I'm wrong? Or maybe people need that inspiration to get a better job? Who knows? Can't please all the people all the time...

Thanks

JD