Peonie's journey to smart money management

spandles

Hi Peonie,

Perhaps the purchase of the other house just wasn't meant to be! We have 'nearly' moved twice in the last 6 years. First time our buyer messed us about and someone else nipped in and bought the house I wanted. The second time last year the chain (further up) collapsed at the last minute and the vendors pulled out. I keep telling myself it just wasn't meant to be and something much better will come along. In your first post you said you didn't want to add your fees to the mortgage - I think a lot of people forget fees for estate agents/solicitors/Surveyors/House Movers (OMG how expensive are cardboard boxes?)/Stamp Duty etc. You're right, these get added to the mortgage or become debt - you are doing the right thing by saving now for those (annoying) costs.

Good luck and keep us updated!

Engeroosi

just think of the money your saving in the meantime having less mortgage/rent costs and also bills if you are staying with family. I am assuming you are only paying a small portion of these. That alone could build up your pot to pay for fees!!

Peonie

The house investigations are slowly moving along. We have been accepted for a mortgage by the new bank and expect the new bank survey to take place this week (that's another £200 gone). Everything rests on these survey results. If this mortgage provider will not lend on the house then we'll have to walk away. Hopefully by the end of this week or early next week we will know.

We had hoped to pay the lawyers and estate agent's fees by credit card and to pay it off over the next 9 months (I have a 0% credit card). But they screwed up that plan. So far we have paid £4000 in fees and expect to pay another £4000 if we buy the current house.

Thanks Newgirly.

Hi Spandles, our sale was relatively straight forward apart from 2 weeks in January when we did not know if it was going ahead or not. That was stressful enough so I don't know how I would cope with the chain collapsing and someone else getting the house.

I was shocked when someone told me they paid over £1.50 for a cardboard box! We hired a van and roped family into help us as our worldly goods were going to two different locations - a family home and storage.

Storage is the biggest unexpected cost for us. Some of the storage companies websites try to help the customer work out how much storage he or she needs based on the size of house. We totally underestimated how much stuff we have. We hired a room apparently larger than our needs and then had to hire a second though much smaller room to fit all the extra bits in.

Hi Engeroosi, yes we are trying to think of all the money we will be saving and will pay a proportion of the bills. Our families have been really good and I hope one day we will be able to pay back their generosity.

We did look into renting but it's ridiculously expensive, costing more than our then monthly mortgage repayments and still with all the bills on top!

Peonie

Survey number 2 came back and we are getting the house :j

It's exciting and scary. We visited the property again today and there's a lot of work to be done. It's going to take YEARS. The OH and I had hoped to do the majority of the construction work this year and pay for it using by some of the profit from our last house.

Instead we have decided to increase our deposit by using the construction money thus reducing our mortgage, but keeping the mortgage term at 25 years. If my calculations are correct we will reduce our monthly mortgage repayments by £34.

Here's my question, in January I joined the MFW challenge with the aim of overpaying our mortgage by £2,000 in 2011. As we have increased our deposit by £11,000 has my overpayment challenge been met and surpassed?

Peonie

As the thread title says, I am on a journey to smart money management and I am dragging my husband along with me.

Not only do I want to cut down our future mortgage but I want to make the most of the money in our current and savings accounts.

In the last week I have sorted out some of our bank accounts to increase the interest we receive. I can't believe we have not sorted this out sooner, all of those years we have received little or no interest... grrrrr.

Anyway, I digress.

In October and before finding MSE and before we knew the extent of the house fees I opened a monthly saving account for 12 months at 5% AER interest and a maximum deposit of £250 each month. And have only 6 months to go.

After finding MSE I took a closer look at the interest rates of our accounts and it found it extremely hard to find the interest rates for my DH's current account. And there's a simple reason why I could not find an interest rate - there's not one, yep zero, zilch, nada.

I have had a current account with vantage with Lloyds TSB for a year and a half and take advantage of its interest rates. In the last week I noticed their higher tier of interest is being removed (I have since seen this information on the MSE forum). At the end of the 2010/11 financial year I used up the full mini cash ISA allowance with money from this account, so the balance looked pretty poor. I then transferred money from our house deposit account (2.5% gross interest) to the vantage account (3.93% gross interest) to reach £7,000 (this is the maximum amount upon this account will pay interest), thus gaining the maximum interest while the top tier is still available.

Due to the DH's current account paying no interest I have opened a second current account with vantage, again with Lloyds TSB and have transferred £7,000 from our house deposit account to gain the maximum interest in the short period we will have the deposit. Once the deposit for the new house has been paid we plan to turn this account into a joint account and use it for our household bills.

This week the OH opened up another monthly savings account with the HSBC (8% gross interest) and with a maximum deposit of £250 each month. As we are buying a new house it may not seem sensible to open another savings account. But when we decided to increase our house deposit it wiped out all the funds we had earmarked for construction work, i.e. build a roof on the extension, so we need to save from scratch.

At the moment we may seem cash rich but the bulk is the deposit for the new house and it will be gone in the next 6 weeks.

When the vantage account interest rates change to the I will need to come up with a new set of account prioritisation rules.

SeriouslySeekingtoSave

HSBC have an 8% savings account? I bank with them and that's news to me! I basically moved to FD for the £100 startup and the £300 a month max savings account. If HSBC have one as well I am going to open a second one as that is a much higher rate than I'm having to pay on my mortgage. Thanks Peonie!

LilacViolet

You seem to be doing really well - its great news about the new house

SeriouslySeekingtoSave

Oh no I did know about that savings account, it's the one where you have to have an expensive account with them before you are eligable. Having a mortgage doesn't count .

Oh well nevermind. I will be looking around for others in two months when my 'have to pay in my monthly wage to FD' ends. I could probably just do the whole 'transfer in, transfer out' trick though but I'd be pretty damn annoyed if at the end of it they then turned around and charged me because I'd broken the rules. So, I think I'll wait it out.

Peonie

Sorry SSTS, yes the 8% savings account is only for those that pay extra for their account. The OH 'upgraded' his account as it meant our mortgage product fee was lower and it made sense to.

I know we all pay for our accounts one way or another but in my gut I don't believe in paying for your account, especially when I won't use the 'benefits' and still don't get any interest! I'm sticking to my no in your face charges account.

Thanks LilacViolet, we can't wait to get the keys.

All of the paperwork has come through about our new joint current account, including the debit cards which we specifically stated we did NOT want, as that account will be for direct debits only. Ah well.

Lois_E

Peonie wrote: »

Not only do I want to cut down our future mortgage but I want to make the most of the money in our current and savings accounts.

In the last week I have sorted out some of our bank accounts to increase the interest we receive. I can't believe we have not sorted this out sooner, all of those years we have received little or no interest... grrrrr.

I need to do this too. Thanks for reminding me, Peonie.