PurpleJay's Journey to be Morgage Free by 50

PurpleJay

Edited to say after a brief start in Feb 11 and a 2 year gap, I have resumed my Mortgage Free Diary! I promise I will try harder to stick with it this time


Feb 2011

Hi All

I have been reading some of your diary's and am now super motivated to have a bash at becoming mortgage free.

I borrowed £80,000 about 18 months ago over 25 years and currently owe £77,463.35. I have a 3 year tracker which tracks at 2.99 above the bank of england base rate so currently 3.49%. I can overpay by 10% per year until the 3 years are up.

I am 38 and my goal is to be mortgage free by the time I am 50!

I currently work part time and my husband is a full time student. We have a 4 yo son and 2 cats and my mum lives with us in a grannie annexe. I manage the household budget which comprise of my wages, tax credits, child benefit and regular contributions from hubby and mum (their other finances are separate).

I have 2 current accounts. The first -my wages and mums contributions go into (both calender monthly) and all the direct debits come out of each month. The second is for the tax credits (weekly), child benefit (4 weekly) and contributions from hubby (termly). This account is used for groceries, petrol, my spending money and transferring into my piggy bank e-Saving accounts which are for everything else.

I have drawn up my budget, joined the grocery challenge, the virtual sealed pot challenge and the no work lunches challenge and have been listing stuff on ebay this week. I already do Quidco when I remember and I will be trying to use it more often. I have drawn up a meal plan!

When we moved in here, we initially planned to extend the utility room to create a full sized kitchen for mum and I borrowed enough to cover this. Instead, after being here a while and finding that I did most of the cooking, we created a kitchenette for her in the existing space instead.

This means that I have some surplus funds (about 7k) which can be paid off the mortgage straight away. I just need to give them a ring and find out how to go about it and then transfer the funds from my ISA.

Initially, I intend to overpay a minimum of £100 per month which I think I can afford (I have used the budget calculator). I will need to put this into a saving account initially so as not to go over the 10% limit and then pay it off as soon as I am allowed.

I have piggy bank accounts for 'Hair/Clothes', 'Car', 'House', 'Holiday', 'Virtual Sealed Pot' (for birthdays and xmas) and 'Mortgage'. If there ends up with any surplus funds in the piggy bank accounts, the plan is to pay that off the mortgage too

Can't wait to get started. Planning to ring the bank today

dimbo61

Dont know what you are earning in the ISA but have you got an emergency fund?
I bet you will be earning near enough the same from the ISA as you are paying on the mortgage so dont be in too much of a hurry to wipe out the £7K and leave yourself short.
I guess you would be able to get back overpayments but do you want to test this ? when keeping the spare money in the ISA costs you maybe £100 extra a year.
I like regular overpayments and build up a good savings pot just in case.
Sound plans Good Luck

SeriouslySeekingtoSave

:snow_grin WELCOME!

You sound motivated and organised and that's what you need I think. I've just joined myself and I've already found it great. I'm spending a lot of time reading the boards and the diary's but it's time well spent. I'm constantly picking up ideas and keeping the MS spark alive within me. Hey, it was due to everyone else that I got enough determination to start my own diary, get my spreadsheets updated and commit to recording every single penney I spend and posting it at the end of the month. Either with a sense of :T or with a sense of . Good or bad it's getting posted!

I'm also a Grocery challenge member so I'll see you on the forums.

Here's to a mortgage free future :beer:

PurpleJay

:wave:Hello and thanks for posting :wave:

dimbo61 - I should have said that I will still have 10K in my ISA for emergencies which I am not touching. Especially given our relatively precarious position - reliant upon tax credits, grants, student loans and my part time local government wage :eek:

My current ISA pays a rubbish rate but I just been renewing it and didn't check - it was good when I took it out years ago. Will be looking into my options for the next financial year - can I move it all to a better rate ISA?

alex_p

Best of luck! Another MFW!

PurpleJay

I have phoned the Halifax who said I can currently overpay by 20%. The easiest way was for me to set up a current account with them and then I can make payments in from my other account online and use the funds to overpay the mortgage either online or over the phone. Just need to go into my other bank now to transfer the 7K which I will do this week. After I have to phone Halifax to tell them to reduce the term and not the monthly payments.

Spiggle

PurpleJay wrote: »

... My current ISA pays a rubbish rate but I just been renewing it and didn't check - it was good when I took it out years ago. Will be looking into my options for the next financial year - can I move it all to a better rate ISA?

Hi and welcome PurpleJay,

You can transfer your poor paying old ISA funds now - you don't need to wait until the new financial year. If there are better accounts around at the financial year end you can always transfer again then. Have a look at the first post here and scroll to accounts that accept transfers in. Hope that helps.

Good luick with what appears a very organised OP scheme.

All the best,
Spigs

Catslovelycats

Hi Purple Jay
we're similar in many ways
even down to the ISA having a rubbish rate (which I only discovered a couple of months ago)
good luck on your MF journey!

PurpleJay

Little man woke me up and made a fuss about having a wee - now I can't sleep so have been looking at ISAs!

I currently have a Nationwide pass book ISA and I am going to transfer the money to their E-ISA which is paying 2.8 AER. I have other e-savings and a Flex (current) account with them so managing it will be easy. I need to get a transfer pack from the branch and can do this when I go in to transfer the funds for my first overpayment later this week. I will then open the new ISA online and transfer the remaining funds to it.

On track for the grocery challenge week 1 and have a number of Ebay listings coming up today with current bids of £39.00

Yesterday we booked the hotel for our 2 nights to Venice and saved £12.10 on Quidco (already tracking). Also the hotel bill had come down by £40 since the previous day - isn't it great when not getting around to something works out so well!

Sepa74

Hi Purple Jay, good luck with your journey!

*Jellie*

Welcome to MFW. Good luck!