Desperate to be mortage free.

sparklybutterflies

After reading with interest many of the posts on here, and what people have done/doing to become mortgage free i thought i would keep an online diary to see what i can do to get to be mortgage free myself.

As i am on a night shift whilst writing this (currently 4.25am!!) i dont have all the correct figures with me so will update after some much needed zzzzzzzzzzs tomorrow.

My mum died in 2004 leaving me and my brother a substantial sum each. I remember i put i think it was £80k deposti towrds a house (we bought it for £222k) so that would have made our mortgage 142k at the time. It was a joint fixed rate mortage with my ex. a year ad a half after that he left me (had been together 6 1/2yrs at this point). To get him off mortgage i had to pay over £1000. I also used more of my inheritence to get my mortgage down to £100k, fixed for 5yrs as was pregnant at the time and needed to make sure i could meet the payments. This is due to end May 2012.
So i think my mortgage now roughyl stands at £97k ish with 23yrs left. Paying £635 a month repayment.

I do have premium bonds (again cant remeber how much off hand). I also have a 5yr bond and another savings account, plus an ISA.

I have a 3yr old son and try to save each month for him. So far am proud to say have saved a good few k in premium bonds towards uni fees etc for him when he is older.

I need to look into my mortgage and find out how much i can overpay eah year as i think this may be worth doing unless anyone can see why not?? Not sure whether its better to take money out of premium bond to do this repayment or whether out of savings account. Again, once i have all the details i can update on here accordingly.

Any tips/advise would be greatly appreciated by anyone. x

Queen-Bee_2

Hi SB - I'm a bit pressed for time right now, but just wanted to say hello and welcome! When I started out, I read a lot of other people's diaries, as, especially in the initial stages of their mortgage free quest, I noticed that they made all sorts of changes to kick-start their MF journey. I also posted a Statement of Affairs (SOA) so other people could suggest changes and tips. Good luck! QB

black_taxi_2

heres an easy calculator for you

http://www.whatmortgage.co.uk/calculators/fleximortgage.html

dimbo61

You dont give your fixed rate but the pay out on premium bonds is poor so if it was me I would cash in the bonds and pay that off the mortgage asap!
Keep your other savings as emergency fund in cash ISA,s
If you were mortgage free before your son is 18 you could then help him with uni costs.

pawlala

get rid of the premium bonds, biggest waste of money on earth. Put all that money in a Lloyds vantage account at 4% and enjoy the interest instead. You get to win every month!

Secret_Saving_Squirrel

Welcome Sparklybutterfly,

Best wishes with your challenge,

Squirrel

sparklybutterflies

Thanks for replies so far, much appreciated!
Right here is all the info i think i need. In May 2007 i took out a fixed rate mortage 5.44% for 5yr term for a 23yr mortgage on £100k. Closing balance on 31/12/09 was £93,856.35. This mortgage rate expires 31/05/12.

I have a 5yr bond with £15k, Cash ISA with £11,157.41 and a 30day reward with £700.
I have £12,400. in premium bonds in my name and £5140 in my sons name.

I have had a quick check on my mortgage and it says if i overpay by more than £500 per calender month i will incure fees which i think is the over £2k figure on my front sheet. I'm not too sure how the overpayment scheme works so i need to call them up and ask. If i only occur a fee when paying over £500 i will pay £499 a month until mortgage due for renewal and then pay a lump sum off. Does that sound like the way to go?

Queen-Bee_2

Hi SB - my mortgage provider (Nationwide, formerly Portman) also had a penalty if I overpaid by more than £500 per month. I got round it by shortening the term!

If you shorten the term, the higher payments you make as a result aren't classified as overpayments, so it might be more difficult to re-borrow. You may also find that you are still able to make your £500/month overpayments on top.

I massively shortened my term a while ago, because I wanted to make some big re-payments. I agreed in advance that I could always extend the term again if I couldn't afford to keep up these payments (and as of September, customers get charged £20 for this service), but so far, I'm holding out to get my balance down swiftly without penalty.

I found this a useful means of circumnavigating The Rules

QB

sparklybutterflies

Thanks for that info QB.
Have just spoken to Nationwide and arranged to make overpayments of £500 a month til May 2012 (when fixed rate ends).
My mortgage as of today stands at £91,606.87 with montly payments now of £1135.79
When my fixed rate comes to an end i'll have £2900 left from bonds and whatever else i can have saved till then to pay off. my 5yr bond not due to cash till 2014 i think.

Any other tips/suggestions what to do? By time mortgage up for renewal i'll have 18yrs remaining so need to work out how much i'd need to pay off to bring it down to 10yrs left.

uzubairu

With the regular £500 per month overpayments until May 2012, your term remaining will definitely be less than 18 years.
Put the figures into one of the many mortgage calculators to confirm this (Locoblade's is very good).

sparklybutterflies

Right additional payments now set up for each month to start Oct 2010 and end may 2012.
Any other advice anyone can give me?