Time I came out of the shadows!

Marksy

I've been reading these boards for a long time (as many people do), so thought I'd post properly now.. as my drive to be MF is my top priority now.

Bit of a background: bought our 2nd house as started a family back in 2009 (moved when our little one was a week old - very stressful!). Had a mortgage for £44,470 over 40 years, fixed for 5 years @ 5.68% to keep the payments low, and also have the ability to pay for them only on my salary as we knew that my wife would be on maternity leave (part of it being unpaid too). Good job really as she's being made redundant shortly.

Never really been interested in money before, but as of late the drive to pay it off is increasing as early on, but we're expecting child no 2.. and we'd like to get our largest financial burden out of the way so we can enjoy family life without the stress of worrying about money to a certain extent.

So, from 2009 we've been making one off capital payments to our maximum (10% of original value) each subsequent mortgage year. On top of this, I've increased the payment amount by ~£70 by adjusting the term of our mortgage a few times (well, most months I phone up and fiddle with the term a bit to squeeze some extra months off it for a negliable increase.. I'm sure my mortgage company are sick of my calls now!).

My goal is to be mortgage free by the time I'm 40 (12 years away). Early calculations work out I could pay it off in ~6 years if I can mantain the 10% captial payments each year and adjust payments as need be. That said, we need to do some work to the house (well not need, but would like to.. and I don't think these are going to be cheap). Added to that we've just had to change two cars (one died, the other not practical for a family (2 door)), so that's put my plans back a bit. We've also just agreed to have new back windows (front ones done last year) as they're in a terrible state and the house is freezing. We also need a new boiler and radiators updating as their heat output isn't great.

So, "hello everyone" - I've read most of the diaries here which are a great inspiration... hoping that I can keep it up like you have.

One quesiton quickly though. My wife and I recently have started taking advantage of ISAs - we currently have £8,700 and £3,600 (+ any extra earnt) which we class as our emergency fund, incase we both lost our jobs. When it comes to the time of having ~£11k left on the mortgage would you pay it off with these savings (thus losing the tax-free bonus) to be mortgage free, or keep ploughing on making capital payments and adjusting the term as and when you could?

Edit: I've just also emailed my mortgage company about paying weekly, rather than monthly to scrape that little bit more off too. (assuming I'm right in thinking more payment periods = more off capital amount = less interest?)

rlc22

Hi Marksy :wave:

I've only just joined up myself, but so far everyone has been very helpful and offered some great tips already.

Good luck with your MF journey - it sounds like you're very well prepared

Rach x

SmlSave

Welcome to MFW Marksy

MF by 40 sounds like a great goal and it sounds like you have a good action plan in place

I think that if i only had £11k left to pay off the mortgage and I had that in savings (one day maybe) then I'd be seriously tempted to get rid of the mortgage.

originalmiscellany

like the others say - make yourself at home! Loads of great tips and advice are here, and it gets to the stage (I hope I'm not alone in this) where I do calculations in my head, if I overpay by x, then that'll mean the mortgage is y, which means if I carry on with x, the mortgage will be z by Christmas 2011.

Or is that just me?!

Either way, great to have you on board.

Marksy

Thanks for the welcome

originalmiscellany wrote: »

like the others say - make yourself at home! Loads of great tips and advice are here, and it gets to the stage (I hope I'm not alone in this) where I do calculations in my head, if I overpay by x, then that'll mean the mortgage is y, which means if I carry on with x, the mortgage will be z by Christmas 2011.

Or is that just me?!

Either way, great to have you on board.

Heh, nope I do that all the time. I even have 2 mortgage calculators on my phone so I can continue to work it out when I'm in work. I think I'm obsessed.

Took another step towards it today which I forgot to mention.. my Sky bill was ~£49 - TV with 1 pack, unlimited broadband and telephone (somehow still getting charged for calls (I had a chat earlier with the wife!!)) so dropped the TV package completely saving £19.50 a month, but due to not having a TV package with them there is a surcharge of £2 - so effective saving of £17.50.. I'll be either putting that a side each month to help to this Septembers over payment (saving over a year and a half), or adjusting the term to take that into consideration.

adwat

Best of luck marksy, I wish I'd started paying off the mortgage at your age. Stick with it - you know you'll get lots of support from everyone here.

Marksy

Well, have been quiet for a while as we've been so busy at home (doing quite a bit of work on the house), and have just taken an allotment on.

Just spoke to our provider and have decreased the term from 13 years 5 months to 6 years and 10 months by bumping the payments up be £200! Have been monitoring the bank and this £200 I had ear marked to do this has been there.. I quite like my provider as I can change the term whenever (monthly, if I so wish) without incurring any costs, etc.

Recenty have spent a lot of money on the house, so hopefully now it should be downhill in terms of outgoings and then less grey hairs appearing!

I'm fixed up until 2014, so that'll leave roughly 3 years if we keep at this new payment rate afterwards in which we could remortgage, or if the rates are still lowish then stick at it.

amanda40

Keep up the good work! We started our MFW Journey last August and have already knocked almost 4 years off our term - It is very addictive!

Marksy

Thought I'd bump this again.. since posting this I found out thanks to this forum that I'd be better paying overpayments monthly, rather than yearly (my interest is calculated daily).

For the past 2 years I've been paying the 10% allowance off at the start of our mortgage year.. so yesterday I made my first monthly overpayment of £500.

I was a bit annoyed as I'd planned on overpaying £372.91 each month (my 10% allowance split into 12 payments), but was told £500 was a minimum overpayment... and also that if I wanted it to affect the term rather than the monthly payments then this would only be the case if that £500 made a difference of 3 months or more. I didn't want to pay off more than £500, so we bumped our monthly payments up by £10 to reduce the term by 3 years... so now I'm down to 6 years and 5 months!

I don't plan on keeping this diary as up to date as the majority of you folks do here, but will update it when I plan to/make a payment - to serve as a reminder and diary to look back on

Marksy

Oh, and from now on we're moving our shopping from Ocado, to Asda - and getting our fresh produce from the market..

My wife is amazing in terms of shopping - she'll spend on average £80 every two weeks, to feed 3 of us with healthy and interesting meals daily (more often that not slow cooker based - I was really suprised what you can make in a slow cooker!).. If we can save a bit more off the shopping then that'll all help towards putting the extra in the pot for the overpayments

SeriouslySeekingtoSave

Welcome aboard - I need a few cooking tips from your lovely wife I think...