Should I be mortgage free?

matty_hunt

Hi.
Thanks mainly to this website, in two months time I will have paid off my £125,000 mortgage in 9 years. Which on an average of £20,000 wage I think is pretty good! So now Im looking forward and wondering how to invest. Possible buy-to-let, renting my own property (as Im about to move in with my girlfriend which will free up my own, mortgage free, property), buy-renovate-sell... But, am I doing the right thing? In that should I be mortgage free? Are there any benefits to keeping the mortgage on my own property, just ticking over on a small sum? (Its a product with the nationwide that allows overpayments with the ability to withdraw all the overpayments made)

any comments welcomed. Thanks

GMS

If you rent your current property you would need to pay tax on the rental income.

If you take a Buy to Let mortgage on it you can offset this against the tax.

You could also potentially release funds from the property to invest in another property if you chose, or any other purpose.

Well done on getting down your mortgage.

linz

Wow, that's a great achievement! Care to share some tips for those of us still trying to become MF? I'd certainly be interested in how you got to where you are now.

All the best with whatever you decide.

matty_hunt

linz wrote: »

Wow, that's a great achievement! Care to share some tips for those of us still trying to become MF? I'd certainly be interested in how you got to where you are now.

All the best with whatever you decide.

Hi Linz. I think to key to my mortgage situation is that Im tight! At least Im sure thats what others think! I'd call it money concious. All my friends talk about having no money but in reality they have it, they just waste it. I tell them all about money saving but they dont seem to want to take it onboard. I suppose there is an element of sacrifice, diverting all my money into the mortgage, but nothing thats a hardship or that I really notice. A big advantage is that I live on my own with no dependants so all cash can go to repayments. Heres a breif summary of some things I did.

• Take a mortgage which allows overpayments.
• Got a fixed rate for 5years so I know what Im paying. Also reduces fees if looking for a new deal every two years, though I was paying a higher rate. (Fixed at the wrong time four years ago!)
• I shop in Aldi, Lidl and Netto - saves a fortune
• I use this website for everything! Its pointed me in all the right directions.
• I dont make a purchase without checking a cashback website. I use topcashback.co.uk which has earnt me about £1000 whilst, in conjuction with this website, still getting the cheapest products. Sign up, its free. Please use my referal link: http://www.topcashback.co.uk/ref/freecash4u
• Christmas and birthdays, get people to give cash so you can make overpayments. Tell them that by giving a cash gift, instead of a scafe or socks, they are giving a better quality of life, much more than that novelty whatever or must have gadget that no-one ever uses. By paying off mortage debt they are giving a far greater gift in the long term.
• Towards the end I am using 0% purchase credit cards so I all my money is going on overpayments in the knowledge that in 13 months time when I have to pay it all back I will of had x amount of months full wages, with the mortgage finished, to accumilate the outstanding. Do the maths correctly!
• I have the advantage of a secure job.
• When I found I could make the £500 per month over payment comfortable, every month, I went to mortgage people and they changed (for free) my monthly payment to include the extra £500 as the sinlge repayment, reducing the term, but giving me a 'new' £500 overpayment facility for any extra cash I had.
• I dont smoke nor really drink. I dont buy sweets, biscuits, snack foods and certainly not cans of pop. This all adds up.
• I didnt have a car for about three years. Again, this saves a stack.
• Reduce outgoings. My mobile phone is pay-as-u-go and I only use it for incoming calls. No tv and the cheapest broadband. water meter.

Well, theres a few things. Might not be of any help as all our situations are different but usually there is a little cash to be saved somewhere. A good look in your shopping trolly next time you are down the supermarket is a good start. I now only goto the fruit and veg counter, the meat isle and essential toiletries. The rest of the shop really is not neccessary. Better health and big savings.

linz

cheers matty, some good things there. im already with topcashback so cant use the link, sorry. i think i do a lot of whats on your list but can think of a few good oned ill take on board. cheers

geoffky

well done..its a great feeling being mortgage free. and as many holidays as we like...

originalmiscellany

Well done Matty! You've done very well if I'm being honest -
125k saved on a total salary of 180k shows how much you've put aside. What a great feeling. We hope to be joining you as soon as possible (possibly 16 months time) - when the pressure will be off somewhat, knowing the house is paid for.

waribai

matty_hunt wrote: »

Thanks mainly to this website, in two months time I will have paid off my £125,000 mortgage in 9 years. Which on an average of £20,000 wage I think is pretty good!

Just out of curiousity, how did you manage to get a £125000 mortgage with a £20000 salary?

Thrugelmir

waribai wrote: »

Just out of curiousity, how did you manage to get a £125000 mortgage with a £20000 salary?

and 9 years ago as well............

matty_hunt

I couldnt get a mortgage on £20000, infact it was £16000 at the time, but I could make the repayments. I brought the house with my brother as the lead name. His £45000pa secured the mortgage. After a year I paid £250 to a solicitor to change the name on the deads to just mine, the Nationwide were happy to change the names on the mortgage agreement, and free of charge too!

hillcats

well, what can I say apart from excellent work...
We are working towards that same goal of being MF too.

Like you say, inspired by this website as well...