Absolutely Determined

Absolutely

... to be mortgage free before my children are 16.

Brief synopsis: Single mum. I have 3 children. 2 with special needs. I pay the bills and mortgage because I receive Disability Living Allowance for my 2 disabled children. I get Carers Allowance. Ex pays maintenance. I get Child Tax Credits and Child Benefit.

I am now ABSOLUTELY determined to throw any and all extra money at overpaying the mortgage.

Reasons:
- I don't know how long my ex will be able to pay maintenance (he has a few mental health issues so may not be able to pay if his work situation changes)

- When the kids get to 16, the money I'm living off (CTC, CB etc) will stop. 2 of my 3 children will not be going into further education due to their learning difficulties

- When 2 of the kids are 16, they will receive the DLA, not me.

So, I've got 14 years to go on the mortgage, but if I can pay it off in 9, the kids will be 16/17 and I'll be mortgage free.

I'm on a fixed rate mortgage for the next 4 years and can only overpay 10% of my £90,000 mortgage for that term.

I've already sent £2,500 (from my savings) and am going to tighten my belt big-style to make sure I don't waste money.

Thank you if you read this far!

dimbo61

Know where you are coming from as we also get DLA.
It you want give your lender a call and ask " Can I reduce my mortagge term please"
Its good to have a good emergency fund but once you have 3/6 months of income in savings ( in cash ISA,s ) then overpaying the mortgage at 4% is better than savings at 3% before tax!
Do you think your children will be leaving home at 16/17? or still living with you.
We reduced our term from 22 years down to 10 years and this increased our mortgage payment my £500 a month BUT it will save us £50,000 in interest !!!
It cost us £50 to change the term and if things get tough we can just increase the term again.
So use "whatsthecost" and put in your outstanding mortgage amount, interest rate, term and then reduce the term one year at a time to see the increase in payments.
Good Luck

Absolutely

Dimbo61, thanks for the reply.

I did consider calling the mortgage lender to reduce the term, but as my sole income is benefits/DLA etc, and we don't know exactly what will happen with those in the future, I would prefer to stick to the terms we have at the moment and overpay where possible.

Also, it would cost me about £3.5k to 'buy' myself out of the fixed rate mortgage at the present time. I only remortgaged last year following a pretty messy and drawn out divorce.

I'm hoping to overpay at approx 9% a year. I've used the Mortgage Calculator and this will mean I'll repay the mortgage 5 years early.

I have 3 children. One will probably go to Uni (more money!), one might be able to go into further supported education and one will be living with me forever!

Thanks again, x

dimbo61

I dont mean change lenders but just reduce the term when you can afford too!
If you can afford to overpay by 9% each year well thats a great start but in a few years you would exceed the max overpayments limit.
For now build up savings and then overpay whatever you can afford!
We have an overpayment pot which means if we really need too we can have a " mortgage holiday"
Using this website and common sence you will be mortgage free GOOD LUCK

Sepa74

Hi Absolutely, you sound like an amazing person to cope with two children with learning disabilities and be surviving pretty much just on benefits!

A lot of people on here do surveys and things to bring in a few extra pennies, that might be something you could think of doing to?

The other thing is to do an SOA and publish it here so you get an objective view of your outgoings and see if anyone has any suggestions for reducing your expenditure.

Good luck with your MFW journey. I'm looking forward to reading about it.

Absolutely

dimbo61 wrote: »

I dont mean change lenders but just reduce the term when you can afford too!
If you can afford to overpay by 9% each year well thats a great start but in a few years you would exceed the max overpayments limit.
For now build up savings and then overpay whatever you can afford!
We have an overpayment pot which means if we really need too we can have a " mortgage holiday"
Using this website and common sence you will be mortgage free GOOD LUCK

I think I'll give the mortgage company a ring and talk it through. I've still got a bit put by for emergencies, home repairs, etc. I wouldn't have even started to think about overpaying unless I had that behind me.

I was trained in accountancy - many years ago, and have drawn up spreadsheets detailing all my outgoings and what I think I can afford to overpay if none of my circumstances change.

Thanks for your advice.

Absolutely

Sepa74 wrote: »

Hi Absolutely, you sound like an amazing person to cope with two children with learning disabilities and be surviving pretty much just on benefits!

A lot of people on here do surveys and things to bring in a few extra pennies, that might be something you could think of doing to?

The other thing is to do an SOA and publish it here so you get an objective view of your outgoings and see if anyone has any suggestions for reducing your expenditure.

Good luck with your MFW journey. I'm looking forward to reading about it.

Thanks for your reply and suggestions. To be honest, I'll not post a SOA as it may set off the "benefit bashers" . I worked from age 16 til I was 35 and had no option but to give up work.

Anyhow, I've got an accountancy background which means I have drawn up a few spreadsheets for the remainder of this year and next year.

I know exactly where I need to cut down - FOOD! I spend far too much on it, don't eat it all, don't batch cook. It's got to be knocked on the head.

I've downgraded my Sky, changed my mobile phone deal, I rarely go out, etc.

Anyway, I'm off to read the boards for inspiration and going to give the Mortgage company a ring about reducing the term.

Absolutely

dimbo61 wrote: »

I dont mean change lenders but just reduce the term when you can afford too!
If you can afford to overpay by 9% each year well thats a great start but in a few years you would exceed the max overpayments limit.
For now build up savings and then overpay whatever you can afford!
We have an overpayment pot which means if we really need too we can have a " mortgage holiday"
Using this website and common sence you will be mortgage free GOOD LUCK

A little update. Dimbo61, thanks for your advice. I would never have thought I could reduce the term of my mortgage whilst I was in a fixed rate deal.

I rang the mortgage company and have reduced the rate by 4 years. Obviously my mortgage payments have increased but there was no fee for changing the term, and I can change it back at any time.

As long as I am sensible, I can meet the payments and overpay now and again.

Thank you!

dimbo61

So if you can manage the new mortgage payment each month and slowly build up savings you will be MF in 10 years when the kids are 17/18 before UNI costs
Nice to see that they are not even charging you to reduce the term good luck

Absolutely

Re-reading my original post, I should have said I am on a fixed rate for the next 4 years and can overpay 10% PER YEAR of the the outstanding mortgage on a rolling 12 months basis. Not 10% of the outstanding mortgage over the total of the 4 years.

So, overpayments so far are the £2500 I took out of my savings, plus another £300 I overpaid in October = £2800 so far.

I have been scrimping and saving and hope to overpay £300 in November.

Current mortgage debt: £86700

Current value of property: £170,000 (not that this means anything really as I will never sell it!)

Sepa74

Hi Absolutely, well done on the OPs. Are you going to keep up this post as a diary so we can share your journey? That would be great

It's a real pity people are so judgemental that you feel you don't want to post your SOA. I understand, but I really think other people s^ck sometimes!

Do you know what, I have hardly ever received benefits in my entire life (jobseekers allowance for a couple of months), and have paid plenty of taxes, and one of the reasons I am happy to pay them is so that I know that there is help out there for people who really need it! So no benefit bashing from me

I know s%*t happens in this life, and am very happy to pay my share of the safety net.