Wkdhoney is a MFW!

wkdhoney

Hello! :beer:

After months of reading everyone else's diary I thought I'd join in.

We bought our house in Febuary 2008. We spent 10k making it habitable and moved in on the 1st August 2008.

We took out our mortgage with A&L for the full amount plus a loan to do the house up. I know this isn't always the best option but to be honest if we'd not taken advantage of that product we'd have still been living at home saving up now.

So we took out a mortgage for £87,875 and the loan for £14,625.

Like a few people I think we were badly advised as we were told the loan would be paid off in 5 years. Turns out it won't be, it'll be paid off in 35 years! (the length of the mortgage!)

I didn't realise how much we'd end up paying until we got our annual statement in January the following year. I called up A&L and was advised to put my overpayment towards the loan section of our mortgage (to pay that off quicker.. second silly mistake :mad:)

I realised that mistake when I received our next annual statement.
I called up and arranged for a further OP of £100 and to have the first OP moved to the mortgage account taking us to a total of £200 on the mortgage.

I then found this forum and looked at my mortgage in far more detail.

We're fixed until August 2012 at 6.68% we have an early repayment penalty of £3501 plus the whole loan.

In the last month I have increased my overpayment to the mortgage again by the royal sum of £11.86 (to round off mortgage payments silly hey!)

As of August 2010 I stand as follows

Mortgage £85666.58
Loan £13051.23

We got married two months ago so I've been leaving the dust to settle so to speak before having a look at our finances so we can up the OP. I'm 25 and DH is 28. We both have full time jobs and although we don't think the house will be our final home we still want to OP as much as we can to improve our equity when we do come to move.

Some interesting figures in case you want to know!
Interest per day
Mortgage £16.10
Loan £2.38

Scary isn't it!?

adwat

Good luck! Keep up with the overpayments - before you know it you'll have completed your first year... it's really rewarding watching the daily interest shrink with each overpayment.

CathT

Good luck with your challenge

wynnvegas

Hi WKD,

Firstly, rounding off the mortgage payment is never a stupid idea!! I can wholeheartedly attest to that. Congratulations on the house, the nuptials and on firing into the mortgage from the off. The very best of luck to you and your husband.

Cheers,

Billy

LilacPixie

Welcome.

It is really surprising how much the little payments add up over the term of the mortgage. I played about once with a mythical mortgage amount and discovered an extra £5 a month of a 35 year mortgage reduced the term by almost 6 months. Sounds so simple and really you don't miss such a piddly little amount.

Be careful, its addictive.

Queen-Bee_2

Hello WKD Honey - welcome to the MFW board. I think that being aware of the mortgage, the amount you pay in interest and the impact of overpayments is a great starting point.

It wasn't until I started my diary that I actually sat down with a spreadsheet one day and worked it all out. I nearly fell off my chair when I saw how much borrowing £100k would ultimately cost me.

As others have pointed out, even small overpayments make a huge difference in the long run, and over time, you might well find yourself in a position to pay off larger amounts too.

Good luck! I'll be following your journey!
QB

wantabetterlife

Hi WKD honey, welcome to the MFW board . I think you are making a great decision overpaying the mortgage, i sooo wish we had of done it before the children came along as we had much more disposable income then. Our daily mortgage interest is very similar and it really peeves me off that we are paying over £500 per month in interest :mad::mad:. Looking forward to reading your progress. Xo

wkdhoney

Hello all!!

Thank you so much for your comments! You're not kidding it is addictive. I've gone and applied for a second job (I have the interview tonight) My OH can work overtime till 6pm so if he does that the job I've applied for also finishes at 6. After tax and everything else they will take off me I'll only be left with about £250 a month but I'm planning on paying that straight onto the mortgage. If I keep that up for just a year then that plus our current overpayment will hit our max overpayments per year.

It's a cleaning job so it will make me a little bit more active as well. Win win!

I also meant to add some goals for September (like I've seen others do. Avery good idea!)

Ebay wedding stuff! I've added everything on last night.
Clear out attic, and ebay, donate, sell, keep for car boot.
Do a new SOA and work out where we can cut costs.

We've already decided that we're not going to go on a 'big' holiday next year, rather we going to do a couple of long weekends away in our tent or using the NOTW vouchers for when it's too cold to camp. This will save on kennelling the dogs as well.

wkdhoney

Mortgage 538
Overpayment at the moment 212
Council Tax 98.00
Gas & Electric 74.00
Home phone 17.00
Internet 6.50
Sky 0
T.V. Licence 12.37
Water 25.72
Groceries 200.00
Dog Food 20.00
Buffer (presents, meals out ect) 50
House Insurance 15
Vets Bills Dogs (2) 15

Total £1283.59

Income £1450

Difference +£166.41

So another goal for September is to make sure we don't spend that £166.41 unless we really have to and we can put it on the mortgage!

xxx

gallygirl

Welcome & good luck

Well done on being so motivated! Please make sure you don't go at this too full on and end up feeling resentful. If you both do long hours you may decide a holiday in the sun is the least you deserve! You're in it for the long haul so make sure you find a good balance.

wkdhoney

Gallygirl, I know what you mean! We will be careful but when we were on our honeymoon (3 weeks in Cuba, bliss!!) we missed our dogs so much we decided not to do a big holiday next year just lots of little ones with them.

The year after though.. who knows!