kimbos mortgage free diary

kimbo26

Hi all

I am new to this site and have been spurred on by other threads to start my mortgage free journey.
i have been sorting through my finances since january and switching to the best possible deals in order to free up some money to start overpaying on my morgage. (just the home insurance to sort out in june).

in my house theres me aged 26 and my oh 31 and our little one 18 months.

we brought our house in 2007 for 164k with a mortgage of 138k over 35 years. we got our mortgage statement in jan this year and at that point owed 133k after 3.5 yrs of paying i'm shocked that we have only cleared 5k worth of mortgage.
last year we made payments of £8907 and only £1581 actually came of our mortgage debt how deppressing is that?? so this year i'm determined to clear off more.

we have just switched to a new deal that has taken our paymrnts from £742 to £685 so i have called A&L today to up my DD to £730 a month so as off next month i will be making my first monthly overpayment of £45.....
i have also been on my online banking and set up a new savings account to put any extra cash we have left at the end of the month in to make a one of payment in jan last month we had £41.76 so its a start.

wish me luck i know its gonna be a long time before were mortgage free but i'm feeling good about the small steps i have taken today to start my journey..........

dimbo61

Every penny you can overpay will help BIG STYLE as you have a 35 year term
You dont give your interest rate but once things settle down if you can up your DD a little instead of saving money in a savings account that will reduce the debt even quicker

kimbo26

were on a 2yr fixed @ 4.79%. i have upped my dd by £45 a month as an overpayment. the savings account is an extra

dimbo61

Well you wont get that from a savings account BUT you still need an emergency fund of 3/6 months of income in a cash ISA just in case.
Once the overpayments have built up you then have the option of taking a mortgage holiday ( only if you or OH lose there job)

kimbo26

i know i plan to save the extra till i have a few hundred and then pay it off in a lump. we both have some money in saving to fall back on so thats sorted.

wynnvegas

Hi kimbo,

It's a bit demotivating at the start. You've got a decent rate to work with and, more importantly, you've got the inspiration to pay it off ASAP. Our first three years saw us clear £7,000 (having paid £750 per month in each of those three years). Paying the interest is a real pain! Seems you have a lot sorted already but maybe doing an SOA might eke out a few extra quid per month to fling at the mortgage. Identifying mini-goals is a great inspiration so con ting the months to mortgage freedom, reducing daily / monthly interest figures gives something to shoot for.

Cheers,

Billy

kingster2069

Good luck on your journey, you'll get some friendly advise here. At least you've made your realisation now. It could have been another 10 years down the road. I would recommend posted a budget often people can offer advise on where you could save some additional money which you can use for over payments. If you pay council tax over 10 months you can use the 2 additional months toward OP'ing.
I also recommend using pay rises to OP, all this can make a real difference in the long run.
I look forward to following your journey :T

kimbo26

thanks guys, unfortunatly the two months we dont pay council tax have just past but something i will definatly do next year.

i will try and work on a budget and post as soon as i can.

my plan for this month is to clear out all the old games and dvds etc we have cluttering up the living room and see what i can get for them. will keep you posted.

CathT

Hi Kimbo,just found your diary. Wishing you lots of luck.The SOA is a really good idea and as well as allowing others to advise it keeps you on track to revise DD's, i have just updated mine due to the budget changes etc.

kimbo26

just been having a nose through some other peoples diarys and found out how to calculate my daily interest.

ours is £17.40 a day cant quite believe how much it is this is a definate motivation, so my new goal is to try and get it down below the £17 by the end of the year

originalmiscellany

Well done Kimbo! One thing I've found useful is the use of a footer/signature as you have done. By every time you post, it appears and keeps you focussed on what needs to be done. A useful kick up the posterior is I ever needed one I also have my overall mortgage to pay but also smaller monthly targets on how much I've paid off which means every time I overpay, I update my signature and it re-enforces the positive step I've made to clearing my mortgage.
An SOA is important to identify where extra savings can be made I agree. I wish I'd discovered this website when i first got my mortgage, as I was happy paying the same amount for the next 25 years - and I didn't realise how a overpayment of say £100 a month would make in terms of shortening the mortgage and lowering the amount owed, especially if as you are, are on a 35 year mortgage.
Hang in there, it's amazing how quickly little savings add up, and a few pounds here and there and a cutback on this and that soon makes a noticable difference. Last thing, is your OH signed up to overpaying? You really need to get his/her full co-operation in this, as if you save and they spend like no tomorrow the progress you make will be painfully slow.

Keep posting and well done on getting this set up, and up and running.