another mortgage free wannabe

bobbybobby

history of mortgages:

first house £66,000 with a mortgage of £60,000 bought in 1996. Sold for £123,000 2000.
second house £174,950 with a mortgage of £110,000. Sold for £249,950 2009.
third house £320,000 with a mortgage of £175,000 2009. NOW ON THE MORTGAGE FREE CHALLENGE!!!

managed to pay lump sum of £5k off mortgage in 2009 and reduced the term from 21 years to 20 years and maintained the same monthly payments of £901.00 tracker mortgage.

balance in march 2010 £166,000 and have reduced the term to 8 years as from this month. This means we can effectively pay off double mortgage payments with no penalty (£1900 a month) and still have the facility to make overpayments as well up to another £1900 a month with no penalty.

curlygirl1971

Have you joined any of the MFW challenges for motivation?

Best of luck BobbyBobby!

Catanddogs

Wow that is impressive.

bobbybobby

just an update on our latest developments!
we had a few debts as well as mortgage so we have decided that it is important to clear those quickly too!!
car loan of £6K
car loan of £2,500K car loan
home impr loan prev house £11K
credit card debt (int only ) £3,500K
so asked lender for further advance on house of £22K to clear debts
said he can offer £22K over 20 years with opayments of 20% during first 2 years with no penalty so decided for this to try and get rid of so much debt, essentialllly mortgage is now £163K plus £22K so maybe step back. what do you think? £550 arr fee and £114 month 1.79 above base rate. feel better now not got so many other loans?:A:eek::eek:

newgirly

Good luck with your challenge, its very much like ours, as we are aiming to pay off £170k in 8 years, starting when we remortgage in august this year. It's going to be tough but so worth it in the end !:beer:

abouttimetoo

bobbybobby wrote: »

just an update on our latest developments!
we had a few debts as well as mortgage so we have decided that it is important to clear those quickly too!!
car loan of £6K
car loan of £2,500K car loan
home impr loan prev house £11K
credit card debt (int only ) £3,500K
so asked lender for further advance on house of £22K to clear debts
said he can offer £22K over 20 years with opayments of 20% during first 2 years with no penalty so decided for this to try and get rid of so much debt, essentialllly mortgage is now £163K plus £22K so maybe step back. what do you think? £550 arr fee and £114 month 1.79 above base rate. feel better now not got so many other loans?:A:eek::eek:

Hi Bobbybobby and welcome to the MFW'ers

Well done on your OPs so far :T

With regard to your question around 'what do you think' about adding your other loans to the mortgage:

You didn't mention what the individual APR's were or what the terms were so I'm going to assume that the APR's where considerably higher than the new rate you have - I guess the main question/advice given is that if you can guarantee that you won't incur additional loans/credit card debt in the future then swapping it to the mortgage is the right thing to do. Some posters advise not to add such debts to mortgages because it is swapping unsecured debt to secured debt and could jeopodise (spelling?) your home, and/or in many cases 'other' debt gets built back up again rather than tackling root cause of overspending.

Having said all that it sounds like you are not struggling financially and should really be able to attack the mortgage reductions so good luck with your plans and I look forward to reading about your progress.

Regards
ATT

dimbo61

You have already doubled your mortgage payment and now added on at least £114 a month on loan to clear the CC debt and 2 car loans.
Now you will be saving the interest and repayments on both car loans and the credit cards but while you can OP as much as possible as interest rates may not stay this low for years to come !
You have a plan and I hope it works for you but please keep an eye on spending and GOOD LUCK

bobbybobby

thanks very much, you have got me thinking now though! you are right we are now saving the difference in the repayments of the credit cards and car loans and what our new repayments of £114 are now.

previously we were paying:-
£150 month on credit card,(balance £3K )
£184 month on car loan number 1
£151 month on home impr loan
£145 month on car loan number 2.
that meant we were paying £630 a month on repayments.
so £630 minus £114 is £516 difference.

mortgage was reduced to 8 year term and we can pay double payments on top of this if we want to with no penalty. (£163,000)

taking out extra borrowing on mortgage of £22,000 to pay off the above debts.

decided to cont with the struggle and pay off this as an overpayment on the mortgage as well as the exisiting mortgage!
i am just off to the mortgage website to work out now what we can reduce the term down from 8 years:T by paying £516 extra a month.
we now will be paying £1900 a month over 8 years( with an existing £300 a month overpayment) and a future overpayment each month of £816 (to include the savings on our loan repayments.)

looking at this it is tempting to go on a lovely holiday and stop struggling but it will be worth it.

we have more disposable income now as i have returned to work after having children and we want to put the money to good use. never had it for long time so hopefully wont miss it !!!:rotfl:

Wildchild_2

Good luck sounds like quite a challenge :T

bobbybobby

right just looked it up and if we make overpayments of £816 month on top of our exisiting £1900 month we can reduce the term of the £163,000 mortgage from 8 years to 5!!!!!!!!!! that is amazing obviously we will still have the remainder of the £22,000 further lending to pay back but still..............
now does anyone think interest rates are going to rocket to completely ruin my plan!!!!
:(:(

bobbybobby

thanks very much!!