DON'T Pay Your Mortgage Off Early!!!

Dithering_Dad

Sloppy_Saver wrote:

Here's a helpful little post for Dithering Dad - Your Signature has your credit card debt and your endowment shortfall with exactly the same value in it - either a cut and paste issue or an amazing coincidence.

Sound plan, by the way to blitz the credit cards - if anything goes wrong you can always borrow the money back off them, which isn't generally the case if you blitz the mortgage, but don't get me started there. Your other idea about paying down the mortgage once you get "back on track" is rubbish, so I'd rethink that one.

There, see I can be nice :undecided

I hadn't noticed the error on my sig so thanks for that. I've updated with the correct value which is a lot better than it was, so once again I have improved my finances without any effort (I also miscalculated my credit card debt by £800!).

I'm not sure that my plan is exactly "rubbish" but I'll have plenty of time to make sure because I don't think that I will be overpaying the mortgage any time soon anyway with my dodgy finances.:o

cupid_s

Sloppy_Saver wrote:

Tut tut, surely the "over run" money is for students who are struggling and in desperate need, not wadded students who are hiding their huge stash of cash to get money they shouldn't be entitled to.

See, this is what the POYM strategy turns people into: grasping misers who's only care is salting away every penny they can onto their mortgages..

So in your opinion, I should stop overpaying my mortgage. Instead saving in ISAs so that I can use this money when I overrun even though there is money set aside by the University for every single PhD student who overruns. I know several people who are 'siphoning' money into their partners account so that they can claim this money when they overrun! You tell me that that isn't worse than me carrying on with the plan I have had for 3 years, before I even knew any extra money was available. Can you explain their motives for being grasping misers? Because it certainly isn't the POYM strategy they're employing.

Now this doesn't make financial sense to me maybe you can explain it better so I can work out why this would be the best plan

Musto_2

Okay so I’ve been following this thread from the start. I have been for many years a fervent MFW at any costs – alright I admit that I top up my works pension contribution but I have no savings. Every spare penny has been thrown at the mortgage after living costs and nice modes of transport:) .

I’d like to thank Sloppy for starting this thread as it has made me have a serious rethink as to where I put my surplus cash. I know that he’s been accused of trolling but he started the thread and it’s easily ignored if you don’t want to follow where it’s going. I also think that it was the best place to put the thread as I for one rarely go in to the sections for which I believe (perhaps incorrectly) hold no interest for me. Sloppy and Tim L were putting forward points of view to make people question their MFW attitudes – if others are still happy with their aims and courses of action then so be it.

I work in the insolvency industry dealing with bankruptcies, IVAs, Liquidations and Administrations on a daily basis. I felt pretty pleased with myself that I was on top of my finances but had taken my eye off the ball that investments elsewhere could be making me a better return than the mortgage interest I was paying. It is difficult to question, let alone change, the mindset I’ve had for over 10 years especially after the inroads I’ve made in to my mortgage. I do however fully understand why people want to pay off their mortgage but there are other ways to put themselves in a financially stronger position.

epoman

Interesting thread which I'll read in detail when I get home tonight, but I just wondered whether anybody had factored 40% CGT into the equation? Gains on your principle home are CGT free whereas other investments are not. When you couple this with the interest saving you make on overpaying your mortgage it seems to make sense to maximise your investment in your home rather than diversifying into other taxable investments.

IFA

You basically want to gain the highest interest you can on any extra money left over each month at the lowest possible risk.

NO ONE on this board knows what will happen so everyone is speculating in the short to mid term..

HACZ

To all above posters, remember balance, moderation and individual circumstances should play a key part in any financial decision of any note.

Sloppy_Saver

hornybear wrote:

I don't read, let alone believe anything you rant about. Please, please take your arrogant and rude manner to a board that wants to hear it. Do you enjoy trolling and being rude to posters?

As I predicted, you have now started a "don't get into debt" thread. :rolleyes:

There 584 (and counting) other threads on the MFW board, if you don't like it in here, why do you keep coming back? The answer, as I'm sure we all realise by now, is that there is a "fatal attraction" going on. You are drawn to me like a moth to a flame, counting down the hours until you can once again log on and feel the hot tears of humiliation and sexual frustration burn as they roll down your feverish countenance. You sob deeply, "Oh why does he treat me like this, does he not know how I yearn for him? Just one nice word, just one and I would be in raptures"
:happylove

Now that Cupid is no doubt pouting at me for calling her a "Grasping Miser", there is an opportunity for you to take over from her as my chief groupie.

As far as the "prediction" goes, you actually asked me to create the "Don't get into debt" thread, in fact, you said "Please". How could a such well mannered person as myself refuse such a polite request?

Alion

Hi, I've read this thread with interest - so much experience, so many opinions.

Before I get flamed, I have a pension and savings and once I'm married (and stopped spending on silly weddingy stuff) I intend to do my research and start learning how to invest my money.

However, will be overpaying our mortgage as well to try to reduce payments when we have children as they're currently very very high (fine on 2 salaries, difficult if one of us wasn't working)

There were two things I thought of when reading this that didn't seem to be discussed (and I'm not very knowledgeable at all, please tell me if they're totally misguided)

1 - surely if you've paid off your mortgage and you retire and things haven't worked as well as you'd planned, you can sell up your big family house and buy a smaller house, freeing up some money...obviously you don't know how much it'll be, but a little house will always be less than a big house (my 2-bed is worth half my parents' family house 10 mins down the road)

2 - people have talked about the value of your property falling, but surely you have to pay what you bought it for anyway...in my situation as a recent first time buyer, I owe around £200k. if my house fell in value, I'd be unable to move, but if I've overpaid, that just might be more possible. So if prices did fall, you'd be in a better position anyway...?

IFA

Alion wrote:

2 - people have talked about the value of your property falling, but surely you have to pay what you bought it for anyway...in my situation as a recent first time buyer, I owe around £200k. if my house fell in value, I'd be unable to move, but if I've overpaid, that just might be more possible. So if prices did fall, you'd be in a better position anyway...?

Exactly the point I was trying to make, your mortgage doesn't change just cos house prices fall..

Sloppy_Saver

There seems to be a disconnect with POYM people's thinking here. The poster prior to IFA says that if s/he doesn't pay down the mortgage and prices crash then they won't be able to afford to move. This would only be true if instead of putting your money on the mortgage you instead throw it into the dustbin! If you invest the money it will still exist, it'll just be held in a different place. So you would be able to afford it.

Putting your money onto your mortgage is just like putting your money into a decent savings account, giving you 5 or 6% return. Savings accounts are nice and safe but as we all know, if all of your money is in savings their value decreases over time due to inflation.

If you put your money into good investments, you're not only saving your cash, but you're also getting capital growth. This means that you have MORE money to put your next place than if you had simply put it into your mortgage "savings account".

The only time I would advocate paying down your mortgage in a frantic way would be if you had overreached yourself and your payments were really too large for your own good. If you have a good job, manageable mortgage, long-term job prospects then investments are the way to go.