Mipmop's Mortgage Quest

Mipmop

Bit of a later update this month as we went across to America in August and then have had both our birthdays since - expensive! And OH bought himself a very expensive birthday present - fine as it's from his savings. That means the account took a little hit and so our current postion is;

Savings balance - £32,219
Mortgage Balance - £155, 836.33
Mortgage less offset - £123,617.24

We are also slightly changing tack as we worked out we can completely offset by the end of 2019 - yey! as long as we had no life - boo!. To that end we've decided to save as much as we can against our targets but we've gone through and planned our spending on larger projects/holidays too - this means we have things to look forward to, will already have planned for any house issues (broken boilers etc) and will still be offset (if we meet our savings targets) by November 2021 - so an extra 23 months. Yet we've included paying off my car finance, a hot tub, 2 cars, a trip to New York, 2 holidays abroad with the children (location TBC), a trip across to Hotel Chocolat in St Lucia (my dream!), a log burner, changing the bathroom, £1000 per year for house emergencies and cars for the girls when they hit that age.

I'm hoping by knowing what we can afford to do the above will encourage us hit our savings targets and not to fritter on things in the interim. We are looking at going down to one car now I can drop OH at work - the profits from this will fund his other kit car build which he had ongoing.

I have decided to try and make some pocket money with the craft items I make - not looking to make a massive profit but to effectively pay for all my crafting needs during the year! I've signed up for a couple of craft fairs as a starting point. Now I just need to sort out setting up as a Sole Trader but believe I don't need to worry straight away as I won't pay any tax owed until the end of the tax year - please correct me if i'm wrong!

In October we will be aiming for savings of £2,100 - I've got a bonus due so that's why we've set it so high and then for the next 12 months after our target is £1,100. Combined will be approx £4,300 with £1k to run the house/bills/food/presents/holidays etc, £830 mortgage payment (£330 interest currently :eek:) and £430 in child maintenance. That will leave us with just under 1k for fuel, phones, clothes, social stuff, life insurances etc. If we can save more that would be great as anything over and above will just offset and we'll get to target quicker.

Can't believe September is almost over already!

Mipmop

MallyGirl

I was a sole trader for a while alongside my job and went on a really useful, and free, course at the local tax office. The main thing I remember was that I had to register myself exempt from class 2 NI on the basis of low earnings. I seem to remember there were advantages to registering straight away even if I wasn't earning so that all expenses incurred could be included without having to backdate anything. Then you do a short first year through to the 4th April (or whenever it is in 2014) and after that trade in years that match the tax year. There are lots of advantages to matching your year with the tax year.
Note that any losses you make as a sole trader - can be offset against income in the day job to save tax. Me as a sole trader bought office furniture and various other business related items off me as an individual to bring them in to the business but the value meant everything was fully depreciated in the first year so when I ended the business I didn't have to sell it back or anything complicated like that.
Good luck

Mipmop

Thanks MallyGirl - that's really helpful advice. I have been keeping receipts and logging all expenditure in a book so I have been preparing. I'll look in to courses near me and look to register as soon as possible. The tax offset would be a benefit!

Thanks again
Mipmop

MallyGirl

My business always made a loss - a self financing hobby - so it worked well for me

Mipmop

So here's my end of year update - I think posting every 3 months helps me see a bigger differance which motivates me more. Our balances as at today are;

Mortgage - £147,981.34
Offset Savings - £26466.00
Mortgage less Offset - £121515.34

I'm fairly happy with that - although to have just dipped below the 120 would have been good! Next year our focus is the mortgage as we are due to re-mortgage in December 14 and I want it to be as low as possible to get the best deal. To that end I've joined MFW with a target of 12k although my secret aim is to be at 105k after offset but that will be a hard push so we shall see.

We have had another expensive few months - another new car as we are now a one car family so within 18 months we should break even and see huge savings on fuel, insurance, tax etc. It's working well so far with only one occassion when we've had to get friends to help as we've needed to head in opposite directions!

All Christmas shopping is done, wrapped and ready to go. I've been monitoring the Grabbit board to get a few bits tucked away for next year (early I know but I like a bargain). My aim is to get Christmas for free so I'm maxing out cashback/voucher sites and so far have £200 in the 2014 Xmas pot with another £450 to find!! I have also set myself a tight food budget for next year so will see how I get on with that. I'm looking forward to the challenge - I've also drawn a little street of houses that I'm colouring in; each block is £100 on my street and I've got 10 houses of 160 blocks which equates to the 160k we originally borrowed!

Merry Christmas all, hope it's a happy and healthy one for everyone. :beer:

Mipmop

Mipmop

Happy New Year everyone :beer:

I've just been doing my initial banking for the year and have overpaid £552.74 off the mortgage. I am expecting the normal payment to further reduce it by £500 in the middle of the month and then next month our cashback credit card pays out - currently on target for £420 of free money to pay off. I am really motivated to get as much as possible off this year as we re-new at the end of the year.

I've started on a strict £85 a month food budget (this doesn't include toiletries which I budget £12 a month for or meat which I buy from the butcher at £15 a month). It will be quite tough but we have soooo much food leftover from Christmas and the freezers are pretty full too.

I'm also going to stop taking my purse to work as I am rubbish at avoiding the corner shop for snacks! I will take my credit card in case of emergency but that's it, no loose pennies. Hopefully that will help my waistline as much as the bank figures!

My other task is working towards a cheap Christmas this year utilising cash back/vouchers etc to pay for it rather than finding the money. I started early as I've already got a few bits courtesy of the great Grabbit findings. I've got about £300 I need to 'find' over the year which I think is achievable.

I feel really positive about this year and am looking forward to getting stuck in.

Mipmop

Mipmop

Thought i'd do a quick update as we are just coming up to our 1st anniversary in our house - time flies!

Balance in March 13 - £159,680
Balance in March 14 - £145,260

So while it feels like slow progress at times we have cleared £14,420 of capital in the last 12 months which is great.

We also have £26,942 in offset savings so we are offsetting 18.5% of the interest costs. We are focusing on overpaying at the moment rather than offsetting seen as we re-new the mortgage in December so I don't think the savings figure will rise much more as the year progresses. My aim for 3 months time (end of June) will be to get below £142k if possible.

Mipmop

Here’s my 3 month quest update! As of the end of June our mortgage will stand at just over 142k so we’ve reduced it by 1k per month since my last update which I’m pleased with.

Financially we made the decision over the last month to pay for our car outright rather than keep the finance plan going – we had gone back and forth over whether to add the cost to the mortgage when we re-new at the end of the year but given the suggestion of potential rate rises in the near future we decided we’d rather carry forward as small a mortgage as possible. As a result our offset savings took a near 20k hit but it’s nice to know it’s just the mortgage we have to focus on in the next couple of years with no more car changes on the horizon thankfully! We may also opt for a fixed rate standard repayment mortgage at renewal rather than another offset, particularly if the rates are better.

I’d like to aim to pop just under the 140k bracket when it’s time for my next update at the end of September so that’s the aim for the next 3 months – it should be a fairly easy target but I am shoring up our savings a bit alongside so I won’t be overpaying as much as before.