Mortgage free!?!?

SAMMYE_2

Hi all,

So glad I found this site. As you will see from my Sig I was totally stupid and ignorant about mortgages when I got my first mortgage but I am trying to educate myself to make up for that now.

I gave up drinking alcohol, cleared my overdraft and any loans moved back in with my Dad, rented out the property and now am saving around £1500 per month.

I overpaid 10% last week and it felt great So happy and I'm making a saving of £60 a month which isnt going to the mortgage lenders!!

Hoping in just over two years time to be looking for a LTV mortgage of about 55% perhaps put it on an interest only mortgage and continue to rent the flat out and overpay whenever possible.

The details:
£106,200 mortgage with 5% deposit 2 years ago on 6.99% :eek:
Moved back in with my Dad and am renting property out.
Overpaying the max 10% per year for the next 2.5 years when I can remortgage and should be able to get down to 55%. Started off 95% LTV

Spiggle

Welcome and good luck with your journey.

All the best,
Spigs

dimbo61

Be aware that if you rent out the property for more than 3 years you will pay capital gains on the profit!

Secret_Saving_Squirrel

Good luck - sounds like you have been through the life laundry!

Squirrel

mel19632

dimbo61 wrote: »

Be aware that if you rent out the property for more than 3 years you will pay capital gains on the profit!

Not quite true! The last three years of ownership of a property are not subject to capital gains if you have lived there. In addition to this, any time which you have lived in the property will also not be subject to capital gains.

When you come to sell, I would suggest speaking to a tax advisor or HMRC.

Make sure you keep a record of any expenses for the property and declare any rental income (whether you are making a profit or not!)

Best of luck with getting the mortgage down!

SAMMYE_2

Great thanks alot everyone and cheers for the advice.

Yes I dont think I do need to pay any CGT on the property as I think it also only applies to a second property!? Is that correct?

Cheers

SAMMYE_2

Bump! :-)

mel19632

SAMMYE wrote: »

Great thanks alot everyone and cheers for the advice.

Yes I dont think I do need to pay any CGT on the property as I think it also only applies to a second property!? Is that correct?

Cheers

IMHO I would worry about it when you come to sell -CGT rules have changed enormously over the last five years or so, so who knows what will happen in next five/ten etc!

HMRC have good guidance on the subject - I think this para is relevant:

Living away from home

You'll still get the full amount of relief if you were absent from your home, but not working away, if all of the following apply:

• you weren't living away from home for more than three years in total
• you're not entitled to Private Residence Relief on any other property during that time (see 'Owning more than one home' below if you're unsure)
• the house has been your only or main home both before and after you lived elsewhere

Back to the main topic though - getting down that mortgage! Sounds like you have made a great start - any tips on what you are doing to help boost funds/ cut costs?

Merry Xmas eve as well!

SAMMYE_2

Hi Mel thanks a lot.

I stopped drinking in March 2008 when I realised I was living for the weekend and blowing all my money on drink and drugs. I was always nearly £2000 overdrawn.

As soon as I looked and my life and realised this I stopped drinking and within a couple of months I was out of my overdraft and at the end of that month I had £300 left.

Since then I tried to cut costs cut wherever I could. I eat healthily as much as possible which saves me eating Junk food. I set myself fitness goals and also realised the gym wasnt a great way to stay in shape and also the gym was time consuming getting to and from plus the petrol and enviromental damage. So I started running and bought myself weights and then educated myself as to best exercises.

I work in London and save £140 a month by cycling 15 miles to and 15 miles from work plus the added benefit of it makes me ultra fit.

I also now think differently about wasting money. I think about how somewhere in the world there is a mother cradling her dying baby because they havent any money and I think about all the money I threw away on drink and drugs and it fills me with shame. This makes me value all the financial and numerous other benefits to living in this Country. I make sure I dont waste a penny and hopefully someday in the future I will have enough money and power to help others. But for now the best thing I can do is build myself up and then I may in the future be able to help others alot more.

linz

What a lovely, thought provoking post.

All the best sammye

SAMMYE_2

linz wrote: »

What a lovely, thought provoking post.

All the best sammye

Thanks Linz x