First-Time Buyer, Mortgage free desires

philhews

Hello all you lovely people, I've been reading through a number of diaries on here over the past week and thought I should start my own, so here it is.

Ok, first things first, I bought my first house last year and moved in on the 1st October, which remarkably is already 7 months ago!

Having lived at home before then I had no stuff, so gave myself a few months to buy up furniture and sort the place out a bit with the intention of getting down to saving/paying the mortgage quicker/paying off my dad from Feb/March this year.

All this didn't really happen, well I've been buying things for the house, but I still seem to have a long list of things I need and I've also been spending money sorting out a veg patch in the garden. With a few more months of buying things and a holiday coming up in July, when will I ever get round to saving/overpaying?!

I guess I want to run this as a way of recording and other people seeing what I'm saving, when it's just me I tend to say 'That's ok, I'll just wait until next month to save' which doesn't really help!

So here's the nasty detail, I took out £96,685 as a mortgage at 3.95% fixed until 08/2013 on a 25yr term. This means I'll have paid it off when I'm 50, paying (interest rates staying the same) just shy of £150k. This is depressing just writing it all down!

Clearly I'm not planning on staying in the same house for 25 years, but if I move after 5, I'll only have taken £12k of the capital which won't do much for moving up the ladder/into the countryside.

I've looked through my mortgage bumph and it says I can only overpay in minimum £500 chunks, so I'll have to put amounts into a separate account until then, is it worth me having an account just for this?

Right, that should do for now, time for tea. Pork stir-fry I think.

dimbo61

Building up emergency savings is always worth it as far too many people live hand to mouth each month and get into trouble when that unexpected bill arrives!
So for now try and save as much as possible each month

philhews

Thanks for that dimbo, first target is now set, I want a 3 month emergency fund by the end of the year. £1,000 per month will cover everything and could be stretched to last over a month, so £3k is the magic number and everything that is saved will, for now, go in there.

MsWow

Congratiulation for your first house!!! You should concentrate to OP as much as you can each month and also to have some emergency money.

We just bought our first house last month and although we don't have much at the moment (just a fridge, a bed, a TV and a table with some chairs) we've started OP the mortgage and at the same time to save some money in case of emergency. We don't what to pay £60.000 in interest over 25 years! Banks get rich on our money so that's why we will OP as much as possible!

We are planning to buy second hand furniture bit by bit and also to paint the house but we will do them later in the year without stopping OP the mortgage. It's so easy to get carry away once you bought the house but we are lucky as we've discovered this forum and all the inspirational stories. We are mortgage wannabes before we took the house thanks to this forum :D:D

OP is so addictive...and I've just started .

GeorgieFTB

Phil

You are a week ahead of me!!! I moved in on the 8th of october last year, and I have pretty much the same problem as you, I haven't started any op yet!!!

I'm more annoyed with myself than anything else but I know I will start, its just there always seems to be something else that is needed, who knew running a house would be so expensive!

I have set up a dedicated account for OPs, this way I won't use them for anything else... I just haven't got off my ar*e to get the paperwork to actually pay it in!

Welcome
Gx

philhews

I think part of my problem is that I don't think anything of spending £20 or £30 on something if I want it, I don't think about that money being used instead to go into savings/OPing as I'll need to buy that thing at some point so it may as well be now! That needs to change, only buying absolutely necessary things, and eating more pasta!

Should probably apply that to this point on and forget about the £50 spent in B&Q for my garden this weekend. Damn it!

MsWow

Phil and Georgie,

Just OP £10 this week and you will feel better. You might think that £10 is not much but for us, if we overpay by £10 each month it will save £1375 in interest and finish 8 months earlier!

Just play with this calculator and be amazed: http://www.moneysavingexpert.com/mortgages/mortgage-overpayment-calculator

philhews

Well today was a good day, I cancelled my phone insurance (£5.99) because I found out my bank account will cover it, I cancelled an on-line subscription ($10.95 = £6.72) because I can't remember the last time I used it. Add them together and do a bit of rounding to keep it neat, and that's £15 a month extra which is going as a direct debit to the savings.

Also as I have a lot of stuff to do this evening I didn't stay for drinks after tennis which saved me at least £5.50 so I'll send that across to savings too. I even won my tennis match! Just waiting for something to go wrong and balance it out!

MsWow - I know even a little bit would help, but I should really get emergency fund up first, and I can only OP in £500 lumps, so would need a separate account to hold it in temporarily. I'm hoping a bit of overtime during the summer, pay-rise in September and a bonus in November should speed things along a bit.

CathT

Welcome and good luck with your OP's. I am lucky in that I can make OP's of how much and whenever I want which means as extra money lands in my account I can OP it straight away.

How often are you hoping to make your OP's? Have you used the calculators to see what your savings could be?

philhews

Well my current target is to build up an emergency savings fund by the end of the year, then I can get going with OPing. The first target will be to get the daily interest under £10 (£92k capital I think), which provided the savings target is met then that would be a summer 2012 target and re-assess as time progresses.

Having gone through my budget again last night I think I need to try and save money on supermarket shops (food, cleaning stuff, alcohol etc) as it's currently £200 a month and that's just for me! Also I spend about £80/90 a month going out which is way more than I need to/should.

philhews

So today should have been an NSD, but the cheque for my tennis club subscription came out, so that's £110 which was a bit of a shock the the balance!

On the plus side I'm getting more and more salady stuff out of the garden so saving plenty on lunches for work. Also off the back of the work I've been doing over the past 8 months I'm getting a salary review in July

I'd like to make it to the end of the month for only another £140, but that'll include 3 weekends which is £100 petrol plus any food at a minimum. £40 for 3 weeks of food? Should be possible, but that's normally closer to my weekly spend

Can't see anymore going into savings this month, so minimise spending is the key and focus on next month from the start.