The Anticipated Glee of being Mortgage-Free....NoraBatty's Quest Begins!

norabatty_2

No word of a lie, I think I've been hanging around the MF wannabe forum for about a year, and have finally plucked up the courage to sign up, proclaim my MF aspirations from the rooftop and hopefully reap the benefits in years to come.

So here goes: I'm 31, married to a wonderful :A32 year old man, whose motto in life is "Why spend £100 on that item, when I can spend £200 on it instead?". He thinks I'm tight and he would be right. He has an apartment that he bought before we got married. We are getting a measly amount of rent from it because a family member is renting it out and OH doesn't want to charge him full whack because he was unemployed for a good while and had to move here to get a job and therefore reckons he can't afford the full rent. We moved into our current joint home in March 2010, I love it! OH hasn't even got around to putting the apartment up for sale because it sounds like too much hassle. We pay a mortgage of approx £330 per month for the apartment - together with insurance and rates, it comes to about £400 a month - a complete waste of money.

Compliments of my generous Daddy and a bit of saving, we paid a 25% deposit on our current home. Once the product fee etc were added on to the 75%, our mortgage started out at the rather impressive sum of £154780 with C&G - interest rate is an interesting one - it's 3.29% variable until March 2012, after which it drops by 0.3% to 2.99% for the next 3 years. Of course, this is all dependant on the BoE interest rate staying the same. The overall length of the mortgage is 25 years. At the moment, our monthly mortgage payments on the house are £757.54. I started making regular overpayments of £400 per month in February. As I'm with C&G and it appears you can't access your account information online with them, I have calculated that my mortgage currently stands at approximately £147237.59 (calculating interest on a monthly basis as calculating daily sounds too tedious!) and if I continue with these regular overpayments, we will owe £140379.55 once our direct debit comes out next March, effectively 2 years since our mortgage began.

We have pretty much no savings. I started putting £300 per month into a regular saver at 8% in January. Unfortunately with getting married, buying a house and furnishing it all from scratch in the last 2 years, I have just about managed to save enough to pay off the last of our 0% credit cards (on which we bought nearly everything in our house - about £15000 in total!) which will run out in August. Together with paying for a holiday abroad later this month, I am hoping to be completely free of credit cards by the beginning of August and attack the mortgage with gusto at this stage.

I have read countless times that you should have 3-6 month savings before overpaying but here is my rationale. Both of our jobs are fairly secure and we are both relatively well paid - my income is approx £32500 and OH's is £36000. With C&G, we can take a mortgage holiday if we need to as long as we have made overpayments in the past to cover it. We could survive on one person's salary if needed.

That said, I am currently directing £300 per month into a regular saver which cannot be touched until next January. After the expense of paying back the credit card and the holiday is over in August, I will increase our saving to £500 per month until we have our emergency stash completely covered. It's just that when I see that we are currently paying £13.34 every day in interest, I can't help but think that we should be putting something towards overpaying the mortgage! Anyway, if we continue overpaying by £400 per month, we will pay off the mortgage 10 years and 8 months early - July 2024 - I would be 44 then but would ideally like to be MF by the time I'm 40.

Finally, I am hoping that our family will be growing soon. We started trying for a baby in January, we got pregnant in April but then had a miscarriage which was more than a bit traumatic. 6 weeks later, we've decided to give it another go and in that way, the holiday is well timed! With any luck, 2 will become 3 in 2012 and then the penny pinching will reach new heights!!

I think you'll all agree that this is an impressively long opening post. All advice/suggestions/complaints/scolding, gratefully received!

wynnvegas

Hi Nora,

Great opening gambit and a quality title to boot. With secure jobs and the ability to take holidays if required, I'm with you on the view that any money sitting whilst you continue to accrue daily interest doesn't make sense. We went right through our journey with no more than £1k in the bank and 0% credit cards to hand to cover emergencies.

Best of luck with the plans for the addition to your family. Really sorry to hear about your troubles on that front earlier in the year. Best of luck also in getting a reign on your husband's free spending! Sounds like getting shot of the flat is well worth pushing. I respect the willingness to help family but if it's costing you money every month whilst someone working full-time is getting an easy ride based on their past situation, it's all a drag on your mortgage free efforts.

Cheers,

Billy

norabatty_2

Thanks Billy. Can you tell I work in marketing when I come up with a title like that? I've read your diaries - serious respect for getting that mortgage paid off so quickly and you sound like somebody who takes care of their family (what with that holiday you have coming up shortly) so maybe you will understand where my husband is coming from a bit more than I do. He is the only one in his family who has a "professional" job and I think the others assume he is consequently made of money!!

Anyway, I'll try my best to continue with the pestering to get the flat on the market asap. Will hopefully get round to posting some targets tomorrow when I'm not so wrecked tired!

newgirly

Hello Nora Batty, welcome

It sounds like you have a good idea of what you are doing and have thought it through well. As for the emergency fund I am another one like wynvegas who is just overpaying rather than saving as well.

Its a shame your OH is not as ready for this as you are, but I'm sure over time you can work on him, lots of us start off in this position. My dh is still not interested really, but thats why this board is so helpful, a never ending stream of people who are interested in boring stuff like mortgages, good luck

tootallulah

Welcome, great title AND a great start to becoming mortgage free. I too have a secure job and paid off my first mortgage with no savings at all, not recommended really. I then did a remorgage for a deposit on a house so now I have two mortgages, rolled into one and not enough savings, however I am not in my early 30s with an OH. In your position I would pay off as much as possible now and then when you are pregnant save like a mad thing to cover maternity leave etc.

Good luck I am looking forward to your diary.

mummyofonechild

Good Luck and Welcome.

You will find doing a diary really useful and interesting to look back on later on.

Good Luck

MOOC xx

sutwam

Good luck with your journey!

Sounds like you have good targets to work towards.

Hopefully you OH will get the flat on the market, he may not be fully on board atm with OPing but perhaps thinking of the flat making it harder saving to cover maternity leave, buying everything for a nursery and childcare if you are returning to work, will soon eat into that loss on rental income.

Good luck!

dimbo61

All I can say is well done so far and keep up the good work
Not sure if the flat is a complete waste of money as long as the rent is covering the costs each month ( or close to it!!) as a long term investment for your retirement.
Each month you are OP by £400 is 1/2 a months mortgage payment and after only a year you could have a 6 months payment holiday if you really needed too!
I still think the 3/6 months of income in savings is a very good idea as this helps when you need to buy large items ( say a people carrier) as nothing like walking into a car dealer and paying cash ( well cash back credit card which is paid in full each month!) to buy a new/ nearly new motor.
You are going in the right direction just dont forget to enjoy the journey

kingster2069

Just wanted to say good luck on your MF journey. Sounds like your already heading in the right direction. My OH isn't very interested in my MF journey, but does get excited when we see our payments reducing each month. We have an offset so I just increase our saving each month which is really starting to make a difference.
I'd say remember the more you pay earlier the bigger the impact and the easier the rest of the journey will be.

Ayeshalush

Fab title! You are obviously very good at your job as it was the title that drew me in .

Good luck with your journey, I will be follwing your diary with interest.

Re your husband and the flat - would it be worth putting together a few figures to show him how much you would save in interest, and how many months/years could be knocked off the mortgage if the family member was paying the going rate for renting the flat? The figures may just be surprising enough to make him stop and think.

I am very sorry to hear about you miscarriage earlier in the year and wish you both all the luck in the world for the future.

A
xx

wynnvegas

norabatty wrote: »

Thanks Billy. Can you tell I work in marketing when I come up with a title like that? I've read your diaries - serious respect for getting that mortgage paid off so quickly and you sound like somebody who takes care of their family (what with that holiday you have coming up shortly) so maybe you will understand where my husband is coming from a bit more than I do. He is the only one in his family who has a "professional" job and I think the others assume he is consequently made of money!!

Anyway, I'll try my best to continue with the pestering to get the flat on the market asap. Will hopefully get round to posting some targets tomorrow when I'm not so wrecked tired!

Hi Nora,

It's easy to see the marketing chops - there aren't enough rhyming headlines on the diary section. You may well have started a trend though. It's funny that newgirly posted as she has a really simple but massively powerful title. I've yet to see anything to rival it (you can have a close second!)

Family is a funny thing. It's only in the last couple of years that I've seen as much of my family on a regular basis and it's nice to do things to help them but a few are really funny with us. I've no airs or graces but I don't hide that we're comfortable either. It's like anything - the people that change because of what you've got probably aren't worth bothering too much about. Count me in as a subscriber to your journey - keep the rhymes coming.

Cheers,

Billy