My mortgage free wannabeness starts here!! :-)

ixwood

Hi all

I'm fairly new to this site. Been trying to keep up with all the (incredibly useful) threads for the last few months and now I'm ready to put a plan into place and try and crack the mortgage. :-)

I thought I'd post here, to give me a kick up the backside and maybe get some advice along the way.

Right here's the (rather dull) background:

I currently have an interest only mortgage for £142500 with woolwichs openplan. It's an offset account. probably not the best choice rate wise, but with my salary multiples not being great (32.5k gross), I'm limited to what mortgages i can get.

After starting with 2 tracker ISA funds (low fee tracking of markets appeals more than paying someone in red braces a few % a year to gamble with my cash!) 3 years ago as my repayment vehicle, I'm now up to 5 tracker funds, totaling £350 a month. Hopefully spreading any risk a bit. Plus hoping to catch a few flyers. They're now up to £10.5k in total (only another 132k to go!! :-/).

Living and running a house on my own, the ISAs are a bit of a stretch on top of everything else. Though I just about get by OK and decided It was worth making a few sacrifices now in order to get my investments "rolling" and allow compounding of returns to really kick in.

I'd been skint anyway for the last 2 years with my poxy GMAC mortgage (only one I could get at the time), so when I re mortgaged and made a saving I ploughed it into more trackers.

That's fine for the time being. Hopefully they'll come good over the next 10-15 years. I now want to try and attack the mortgage from the other end and bring down the lump sum as well. My offset account will probably be used for this, as that way I can still access the money in case of need.

I currently have no saving other than my ISA and no credit card debt (I pay off in full monthly). I do have the remains of a car loan with sainburys, with 1k left to pay.

After only really taking advantage of credit cards for the free gifts before, I recently taken an interest in stoozing as a way of helping get the mortgage paid and have started slow stoozing. I'm building myself up to some fast stoozing!!

I've recently got the sonycard and amazon card for the free gifts and they come with 0% offers, so might get on the case with some balance transfers. Although with fees, i'll have to be quick to make it worthwhile. Think I'm maybe best using them for slow stoozing and getting a capped fee bt for fast.

I've also got old marbles and fd cards I don't use any more which I need to close to free up my available credit. Or maybe try and get a 0% deal out of them.

So (phew!), i think the plan should be something like:-

1. bt the remaining 1k loan debt to one of my 0% cards (that I'm not spending on!!)
2. Pay the remaining loan repayments into my offset account monthly.
3. Make the offset mortgage account as my main current account (i.e. get salary paid in. It's currently FD)
3. Setup all my direct debits for the last day of the month (to maximize my the amount my salary offsets by. I'm aware this could be dangerous and potentially mean overspending, but I'm generally on top of what I'm actually allowed to spend. And 2k off my mortgage payment calculation isn't insignificant)).
4. Do as much normal spending as possible (i.e % wise of total. Not spend more) on 0% credit cards.
5. Setup direct debits for monthly minimum payments for 0% cards.
6 Transfer the money I would have used to pay the cards off monthly into separate named savings pots, so it's still offset, but I don't spend it.
7. Move monthly any money saved on that months mortgage payment by the previous months offsetting to another offset pot. Hopefully it'll grow with time!!
8. Have a good clear out and sell unwanted stuff. Put that and any other "windfall" cash into my offset savings.
9. Try and increase income somehow and offset any made. Not sure how yet. Overtime's probably my best bet.
10. Get a mortgage pig. Of course! :-)
11. Do as much OS saving as possible. And offset any "profits".
12. (Carefully!!) start fast stoozing and get as much 0% debt as possible offset against my mortgage. Whilst obviously not spending any of it, so I can pay back at any time.

I'm new to this, but I'm willing to give it a go. I think with manipulating my salary/dd dates and slow stoozing, i think i'll be able to get up to £3-4k offset against my mortgage quite quickly. That alone will give me a little spare cash, which i'll hopefully continuously reinvest in offsetting.

With fast stoozing, who knows? 10-20k off my mortgage calculation would make a huge difference for me.

Anyway, waffle over. Sorry to go on. If nothing else, it's cleared things in my own mind a bit and got me started taking the 1st step.

Any thoughts/suggestions/warnings/advice would be greatly appreciated. Anything I've missed?

ixwood

Ha ha what a load of waffle. Didn't realise I'd gone on so much!!

I'll do a more factual summary as some point. And also fill in a few details I missed.

Hope this is the right place. Reading back, I do mention stoozing and credit cards quite a bit, but only in context of helping to be mortgage free.

ixwood

Oh, and I also need to try and workout my Mortgage free date.

At the minute, the mortgage has 24 years left (gulp!). But as I'm interest only, it's really when I've got the cash. or not.

i need a footer!! :-)

Yorkielass

Just wanted to say welcome :hello:

I'm sure others will come and comment on and help with your plans soon

ixwood

Aww. The sympathy vote. Thanks! ;-)

It's given me a plan at least..

mrs_deadline

Good luck with your schemes ixwood. Any possibility of renting out a room in your house, sweat the asset a bit?

ixwood

No! I don't even know you... ;-)

Good idea. I don't really want some random freak around the place, but a few hundred a month extra pm would certainly hammer my mortgage down. I also have a dog I'd be paranoid about some idiot lodger letting out by accident to get run over or something.

I did have a lodger while back. A mate from work. That was handy whilst it lasted. he's got his own place now. I need to have a good think, see if there's anyone else suitable I can think of..

ixwood

Oh, and thanks Yorkie.

gallygirl

Welcome! Plan sounds sensible, if too complicated for me to cope with! (Apart from the mortgage pig, I understood that!:D ).

Just a note of caution - you need to keep a v close eye on end dates of ccard offers else you could easily lose all your gains. I know you're really keen at the mo, but the initial determination will wane a bit and you may take your eye off the ball.

I love offset accounts. You can knock loads off the mortgage, but have access to funds in an emergency, you need to be disciplined though!

Gingham_Ribbon

Wow! Good to have you on board. It sounds like a solid plan. The best of luck to you!

jamesd

Check to see how your trackers compare to these multi-manager funds, percentages are annual compounded return over the last 5 years:

CS MMgr UK Growth +10.5%
New Star Global Strategic Capital Unit Trust +12.6%
M & G Fund of Investment Trust Shares +11.4%

Paying more to make more is good and these do cost more than a basic tracker. These are multi-manager or multi-fund, better for people who don't continually monitor and adjust fund balances and choices. You could do better yourself if you're good at picking individual funds.

You might consider spreading your existing money around into one fund per thousand, adding managed regional funds (not tracker regional funds, compare the returns of each style to see why, trackers usually do less well).

That offset mortgage is probably more expensive than a non-offset mortgage but it's OK as a stepping stone given your income multiple.

You can expect to make more from investments than you can save from repaying the mortgage to save mortgage interest, so I'd go with filling the stocks and shares ISA limit before overpaying or offsetting anything more than an emergency fund.

So long as it doesn't stop you from using the ISA limits, it's worth considering regular saver accounts, since they also pay more than mortgage overpayments or offsetting. How much gross interest you need to beat the mortgage rate depends on the rates and your tax bracket, it may take more than 8% for high mortgage rates or higher rate tax.