Nat's Mortgage Free Odyssey...

nellis10

Hi!

Well I thought I would start the journey...odyssey....now to give me more of a push to get things going.

DH and I are getting back together after a 6 month split. We have 2 houses currently, but I'll explain in detail later with our SOA. We have one DS aged 2 and we are hoping for more. DH is 44 in Nov and I'm 35 so I guess we have about 5 years left to increase the family (ideally I want 4 in total!!) Anyway I am hoping to start the MFO officially in Jan 2007. Here's the Details:

House 1 - (DH is the sole name on the title deeds, this will change in the enar future) £270K Value with £102K Mortgage over 13yrs. Bought Jun 04 for £165K, flexible repayment mortgage. This is the one we are trying to get MF.

House 2 - (the one I currently reside in is jointly owned by me and my mum so there is a 50/50 split in any profit) £120K value with £72K Interest Only Mortgage fixed for 5yrs. Bought Nov 05 for £80K, fixed period runs out Nov 2010.

We are hoping to be able to be MF soon after the end of the fixed rate period running out on the House 2.

SOA

Income 1 = £510/pw = £2210/month (Self-employed, owner of a business)
Income 2 = £950/month (part-time)
Benefits CTC/CB = £140/month

Total Income = £3300/month

Bills

Rates (NI) = £105
Mortgage (1) = £870
TV Licence = £10
Electricity = £43
Gas = £50
Sky = £36
Car Ins (1) = £53
Car Ins (2) = £38
Car Tax (1) = £10
Car Tax (2) = £10
NICO = £9
Pension = £152
Tax = £500
Gym = £59
Building/contents = £9
Life Ins = £24
Telephone (1) = £50
Telephone (2) = £15
Internet = £13
Mobile (1) = £30
Mobile (2) = £20
House (2) = £200 (this is half the bills and mortgage)

Total Out = £2306

Remainder = £994/month

Food = £250
Christmas = £30
Hols = £100
B/Days = £20
Savings = £100
Cigarettes (DH) = £150 -will get this down I hope!!
Spends DH = £150
Spends Me = £150

= £950

Leaving £44/month to overpay the mortgage each month from Jan 2007.

Obviously I want to increase this to a lot more so that we can really start making inroads into the mortgage. Ideally if we can pay it off in 10yrs instead of 13 that would be a big achievement. We will make money on the House (2) which will help. I estimate we could have as much as £40K from the small house by end of 2010. That would leave £82K and we should be paying £5K per year off with the mortgage payments so that would be another £20K leaving £62K to pay off by 2010 leaving 9yrs left on the mortgage.

What do you think....If we keep the Mortgage as it is....we are MF by 2019 no matter what. If we use the proceeds of the little house and keep the payments at the same level...we could get it down but I don't know how many yrs £40K would take off.

Here we go....
Edited...It's Now October 2010 and 4 years have passed, but I am starting this Odyssey once more!!

Welshlassie

Have you plugged all your figures into Mortgage calculator.

I like Eggs http://new.egg.com/visitor/0,2388,3_54988--View_1028,00.html

It will tell you how much it will knock off and you can play with it to see how much extra you would need to increase your overpayments by to pay it off in the time you need.

You will need the interest rates of the mortgage to do this.
The other thing would be to try and reduce some of the ther month payments, have you checked USwitch to ensure you are getting the cheapest gas and leccy, your telephone 1 costs sound high, could yo get a package that includes broadband.What about your Gym membership this is really high (unless it is for 2 of you), do you actually use it?

Have a look at the mortgage pig thread as well, a fab idea and so easy to do and it will really make a different, however small.

Good luck, just a word of warning though, this gets addictive when you get going and you will be looking everywhere for how to save money to put towards it.

nellis10

Welshlassie wrote:

Have you plugged all your figures into Mortgage calculator.

I like Eggs http://new.egg.com/visitor/0,2388,3_54988--View_1028,00.html

It will tell you how much it will knock off and you can play with it to see how much extra you would need to increase your overpayments by to pay it off in the time you need.

You will need the interest rates of the mortgage to do this.
The other thing would be to try and reduce some of the ther month payments, have you checked USwitch to ensure you are getting the cheapest gas and leccy, your telephone 1 costs sound high, could yo get a package that includes broadband.What about your Gym membership this is really high (unless it is for 2 of you), do you actually use it?

Have a look at the mortgage pig thread as well, a fab idea and so easy to do and it will really make a different, however small.

Good luck, just a word of warning though, this gets addictive when you get going and you will be looking everywhere for how to save money to put towards it.

I have Peppa Pig the Pink Mortgage Pig with £35 in it from £2 and 20p savers clubs!!

N. Ireland doesn't ahve more than one utility supplier so we are stuck there!!
Trying to get phone 1 down and may look at a broadband/tv/phone package.
Gym is a bit high, but he uses it for himself and DS, so I don't mind it.

Is there a mortgage calc that actually allows you to state what year you make a lump sum payment and what it would then do to the term?

Thanks for the suggestions by the way...I'm an avid MSE already and even trying to get co-workers into it too...!!!

Welshlassie

The Egg calculator has that facility. There is a thread that w
lists lots of calculators, if just a case of scrolling through them all to find the one you prefer most.

nellis10

That Egg one is fab...being playing around with it!!

I've just been doing a few very loose projections...

Nov 05 House (2) bought for £80000
Valued Aug 06 for £120000
If we assume that the price increases by £25K/yr....not unreasonable in the Northern Ireland market at the moment to be honest...
Then when the fixed period comes to an end in Dec 2010...We would stand to make a profit of £150K between mum and me....This would equate to £75K each. As this is my main residence at the moment...I'm hoping I won't be paying CGT as I won't move in with DH until 2007. Thus....it should be enough to almost clear the House (1) mortgage by then....

We could be MF by end of 2010!!! A 4 year plan!!!!!

Anyone think I am daft?

Welshlassie

If it works for you and you're not just holding out on the hope that it will increase by 25K each year (it will have to slow down at some point) then good for you. Make the most of it, but still try to over pay if you can, it will save you interest in the long run and mean that if it does increase by £25k a year you'll have more in your pocket at the end of the 4 years.

nellis10

Welshlassie wrote:

If it works for you and you're not just holding out on the hope that it will increase by 25K each year (it will have to slow down at some point) then good for you. Make the most of it, but still try to over pay if you can, it will save you interest in the long run and mean that if it does increase by £25k a year you'll have more in your pocket at the end of the 4 years.

Not holding out for it, but if it happens...DH and I are going to be MF that much sooner. If it doesn't happen I need to have a plan in place to allow us to still be MF sooner than 2019. Although it won't happen as quickly. I am going to give Peppa Pig a shake tonoght and work out what I can put in her!!

nellis10

OK I have just set up payments for the following to begin 1st January 2007:

Overpayment of Mortgage = £50 Brings us down from 13yrs to 12yrs and 3 months!!
Savings = £100
Christmas = £30
Birthdays = £20
Holidays = £100
Extra Savings = £? Anything left over and not put into the Mortgage Piggy goes in here for treats/emergencies.

Welshlassie

Sounds like a great idea. Best of luck.

I've got a savings account which has a higher interest rate than my mortgage that I put my Mortgage Sheep savings iinto and then once a year I am going to lump it all off the mortgage, inaddition to the regular overpayments I put towards it.

Iona_Penny

I think this is an admirable aim, and as we have just paid endowment proceeds off our mortgage we are now overpaying by £150 per month which will knock over 2 years from remaining 10 year term :j at CURRENT interest rates;
I think the two things in your story that seem at odd however are the fact you want to overpay and add to your family!! Are you going to be able to do this without losing income? Are you going to need the money you will overpay at least in the short term to cover maternity leave etc? Sorry, just curious as although there is a surplus if you stick to your budget it is still fairly small.

nellis10

Welshlassie wrote:

Sounds like a great idea. Best of luck.

I've got a savings account which has a higher interest rate than my mortgage that I put my Mortgage Sheep savings iinto and then once a year I am going to lump it all off the mortgage, inaddition to the regular overpayments I put towards it.

What rate are you getting? We have ING @ 4.75% and our mortgage is currently 4.62% I think...