Mortgage free!?!?

somethingcorporate

Great story, well done. I find it very inspiring!

Just make sure you are on the right side of the tax man, you have been declaring rental income etc??

Good luck with your plan, no doubt you will exceed it!!

SAMMYE_2

somethingcorporate wrote: »

Great story, well done. I find it very inspiring!

Just make sure you are on the right side of the tax man, you have been declaring rental income etc??

Good luck with your plan, no doubt you will exceed it!!

Awww cheers I'm really glad you find it inspiring! Thats really cheered me up.

I'm think I'm ok as far as I can tell as long as I move back in for a bit after 3 years renting I should be ok.

I really need to start ebaying and stuff. I have got a nice time off from work (11 days) during Easter so I am going to sort out a load of stuff then and get organised.

[Deleted User]

Hey Sammye
good luck deciding what to do - and exciting on the new someone!! (even if it is a pain when living at your dads)
Im sure you probably know this but...
re: income tax if youa re renting the flat out you should be completing a self assessment tax return each year- the 3 year rule applies to capital gains tax (ie. any profit you make when you sell over the price you bought the flat for) and is applicable 3 years after you move out (but there are things like residence relief of £10000 I think if it has been your permanent home at one time!)

good luck whatever you decide to do next - you are right renting can make the OPing easier, but you never know whether you will get good tennants who will pay rent/not trash the place etc.. so it is a bit of a balancing act between that and enjoying life too!

Ed_Zep

Well done for deciding to pay off your mortgage and get your life together. An equal well done for quitting alcohol. It'll make getting mortgage-free even easier!

SAMMYE wrote: »

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.

SAMMYE_2

Deleted_User wrote: »

Hey Sammye
good luck deciding what to do - and exciting on the new someone!! (even if it is a pain when living at your dads)
Im sure you probably know this but...
re: income tax if youa re renting the flat out you should be completing a self assessment tax return each year- the 3 year rule applies to capital gains tax (ie. any profit you make when you sell over the price you bought the flat for) and is applicable 3 years after you move out (but there are things like residence relief of £10000 I think if it has been your permanent home at one time!)

good luck whatever you decide to do next - you are right renting can make the OPing easier, but you never know whether you will get good tennants who will pay rent/not trash the place etc.. so it is a bit of a balancing act between that and enjoying life too!

Thanks alot

Oh no I didnt know that! To be honest my friend first suggested renting as that was what he was doing but didnt say he had to do anything else.. sorry I must sound very ignorant!

As for the Capital Gains tax do you think it is worth me moving back in for a couple of months at some point so that CGT would not be applicable? Really need to read up on this sort of stuff.

I've been lucky with my tenants at the moment who are really nice, they have been perfect really but they are moving out in June so need to find new tenants hopefully the next ones will be just as nice.

SAMMYE_2

MORTGAGE PAY OFF DETAILS AND SAVING PROJECTIONS

Pretty ambitious but it I can stick to it, it will make my life so much easier :-)

Pre December £690 a month mortgage :-(

Paid off £10,619.87 In December 2010 – Mortgage- £95,588.72 – down to £624 per month mortgage.

[STRIKE]
1. Dec 2010 - £800
[/STRIKE][STRIKE]2. Jan 2011 - £2300 [/STRIKE][STRIKE]
3. Feb 2011 - £2800
[/STRIKE][STRIKE]4. Mar 2011 - £4500 [/STRIKE]- J (PAID OFF £4500 on 1/04 J) £91,000 - Mortgage - £21,000 (equity) 81% LTV
5. Apr 2011 - £1500 – (can pay off a further £5000 on 10% overpay) £595 per month mortgage
6. May 2011 - £3000
7. Jun 2011 - £4500 –
8. Jul 2011 - £6,000 (9500)-10% overpaid(Mortgage 86,088.72) -£550 per month Apprx 77%LTV
9. Aug 2011 - £2500
10. Sep 2011 - £4000
11. Oct 2011 - £5500
12. Nov 2011 - £7000
13. Dec 2011 - £8500

14. Jan 2012 - £10,000
15. Feb 2012 - £11,500
16. Mar 2012 - £13,000 (8600 approx) Mortgage £77,488.72 - £500 per month Approx 69%LTV
17. Apr 2012 - £6000 Pay extra £100
18. May 2012 - £7500
19. Jun 2012 – £9000
20. Jul 2012 - £10,500
21. Aug 2012 - £12,000
22. Sep 2012 - £13,500
23. Oct 2012 - £15,000
24. Nov 2012 - £16,500
25. Dec 2012 - £18,000

26. Jan 2013 – £19,500
27. Feb 2013 - £21,000
28. Mar 2013 – £22,500 £7748.87 makes 62%-Mortgage £69,738.85 -£400 Appr £42,000 owned
29. Apr 2013 - £16,000 pay £250 less
30. May 2013 - £17,500
31. Jun 2013 - £19,000 in savings! J
32. July 2013 -£20,500 in savings! J **Remortgage time ** 62%

At 62% I will be able to access low mortgage rates at 2.5% £69,738.85 which on a repayment is £264 a month or interest only £145…

SAMMYE_2

Turns out that the reliable tenants are now staying until after Christmas so that is an extra £4,000 which I should be almost guaranteed to be able to overpay!

Was a bit worried for a while but alls well that ends well. Holding off making any overpayments for a month or so in order that I have some savings behind me just in case.. the desire to overpay is almost overwhelming but I will fight it! lol

SAMMYE_2

Having been inspired by Earthgirl becoming mortgage free. I've been thinking about getting a part time job at the weekend just wondering if anyone had any advice... fancy perhaps a clothes shop or something similar is this easy to do? Sounds a stupid question but I've only ever had a full time office job straight from school and before that it was just a multitude of paper rounds. Oh I'm 32 by the way but look in my 20's :-)

Oh and I also earn £33,500 a year so I suppose there might be some tax implications!?

Lois_E

As long as your second job doesn't take you over into the 40% band, your second employer will be given a BR tax code for you, and you'll be taxed at 20% on the lot - since your personal allowance etc will already be taken into consideration by your main employer. That's unless you find some kind of casual work that's not able to do PAYE, in which case you'll have to do a tax return at the end of the year and pay the 20% then.

SAMMYE_2

Lois_E wrote: »

As long as your second job doesn't take you over into the 40% band, your second employer will be given a BR tax code for you, and you'll be taxed at 20% on the lot - since your personal allowance etc will already be taken into consideration by your main employer. That's unless you find some kind of casual work that's not able to do PAYE, in which case you'll have to do a tax return at the end of the year and pay the 20% then.

Oh cheers Lois really helpful

Found out this:

There are currently 3 rates of tax on wages:

1. The basic rate of tax – 20%
2. The higher rate of tax – 40%
3. The additional rate of tax – 50%

2010-11Basic rate: 20% £0-£34,800£0-£37,400
2010-11 40% rate: £37,401-£150,000

Even though it says you start paying the 40% rate of tax after earning £37,400, remember that everyone that works in the UK is given a tax free allowance (currently £6,475). This means that you could earn:

37400+6475 = £43,875 before paying the higher rate of tax of 40%
Remember that you only pay 40% on any income above the higher rate of tax, not your entire salary. So any pound over this amount will be taxed at 40 pence but any amount before will still only be taxed at 20 pence in the pound.