DFW vs MSE Dilemma

SunderlandBlackCat

I got home last night to find a letter to say that as of Wednesday 7th of February they would be increasing my Mortgage interest rate to 7.39% so my first thought was to look at switching mortgages.

I decided to try adding it into my snowball calculations first though as its my highest APR debt anyway & was amazed to see that if I snowball correctly mortgage & unsecured debts will be paid off by July 2009. but I will still have those unsecured debts all that time.

I'm geting really close to paying those other debts off though & was really looking forward to it but if I clear those off first I can still pay off my mortgage at about the same time but it will cost over £500 more in interest so thats not very MSE.

I'm normally pretty decisive but this one has got me flip-flopping so I've decided to throw it open to the board. All opinions welcome.

itsarichmansworld

Oooh toughy.

Looking at your sig I would pay off all unsecured as you will be debt free in a few months hence more money to throw at your mortgage.

Plus I may be wrong but If you dont have any other commitments youmay ge a better mortgage deal than you would just now.

Thats what I would do

ZTD

First check you can make overpayments on your mortgage without penalty.

If you can, overpay your mortgage. It's a debt. Debt is debt is debt - whether secured on unsecured.

If you had HP on a car, you wouldn't have even thought of not paying it off ASAP - and it's the same thing.

Storm

It's tough, but I would say pay the extra off the mortgage - to be debt free completely in July 2009 is still close enough that you should hopefully keep the motivation levels high for it - and the £500 you'll save overall will pay for a very well-earned holiday in the August!

SunderlandBlackCat

Storm wrote:

and the £500 you'll save overall will pay for a very well-earned holiday in the August!

:rolleyes: It'll be more likely to pay for a sofa. I've been sitting on inflatable furniture for the last 3 years after I ebayed my sofas to kill off one of my cards.

Skint_Catt

SunderlandBlackCat wrote:

:rolleyes: It'll be more likely to pay for a sofa. I've been sitting on inflatable furniture for the last 3 years after I ebayed my sofas to kill off one of my cards.

Sorry but that did make me laugh! :rotfl:

That's the ultimate in DFW'ing!! :T :T :eek:

Catt xxx

DontDoDebtKids

SunderlandBlackCat wrote:

:rolleyes: It'll be more likely to pay for a sofa. I've been sitting on inflatable furniture for the last 3 years after I ebayed my sofas to kill off one of my cards.

That really is fantastic. Kudos to you! True DFW commitment (sp?)

flowerofscotland

Pay off the mortgage - not only is it advantageous to you from a financial perspective but you minimise the risk of losing your home.

I completely understand why a lot of DFWs only look at loans and credit cards when calculating their DFD but debt is debt.

In your situation you can combine the 2 and work towards a complete DF date - good luck - you have done wonders so far.

dinkylou

I know its not the most MSE way to do it, but I would remortgage to get a lower rate (making sure that overpayments are possible), then I would get rid of all the cards and then tackle the mortgage.

The feeling of being debt free (exc mortgage) would be enough to keep me fighting the mortgage for longer and harder.

Karmacat

The sofa thing *is* the ultimate in DFW-ing, isn't it! I agree with paying off the mortgage first - if its cheaper, do it. Thats what I'm investigating now in relation to paying off a loan vs using it as a tax loss.

And, although you sound like you're really close to the end of your mortgage, if you had problems and suddenly couldn't afford to repay everything - well, an unpaid, unsecured debt wouldn't lose you the roof over your head. An unpaid mortgage could do exactly that.

bandraoi

I would go with paying off the cards and then remortgaging too.

It sounds to me that in your effort to become debt free you've sacrificed alot of basic comforts, it might be worth taking a little time of DFWing and building your resources - furniture, relaxation levels before making a final push on the mortgage.