No Money - but BIG ambitions

Weronika

Sepa74 wrote: »

Yes, it does seem crazy to OP the mortgage at all when you have to find that sort of money in such a short space of time. That £100 OP a month you are planning is £2400 less that you need to find over the next two years.

Well, the way I see it is with OP I'm saving money right now, because any payments added to reduce current mortgage balance means reducing compounding interest.

One of the options next year - as our fixed deal ends in 2013 - is to borrow more against our house (I have enough equity). Or take another mortgage (as investment is an actual property).

I hope I won't need to re-mortgage because if I start working again I can pay for it within the time limits required thus avoiding re-mortgaging costs.

Especially that I have some plots of land to that value for sale - unfortunately because of current climate people are interested but not buying;( Because I still have a year or so before I need to find first £20000 and the plots may as well sell after winter I'd rather reduce my current mortgage right now with OP.

So I do have couple of options and plans for each eventuality, just in a limbo right now due to the baby.

As the last resort my parents will put money upfront and I'll just pay them off as quick as I can.

Also, to clarify, I wrote it wrong: it's current worth is £40000 but I put only £10000 at the beginning, so even with the downturn the investment plot already proved to give decent return on money. Just need final push to finish building the damn thing and start renting it out so it can earn me 'tangible' cash, not a paper value! (Although the rise in value itself is good for getting approval for mortgage if it comes to that)

Weronika

getmore4less wrote: »

STOP WHAT YOU ARE DOING.

I can't comment on the investment it may be good or it may be a big mistake but you need a PROPER plan for this

If you are going to lose £40k you need to start saving EVERYTHING you can towards this, stop spending, overpayment, MORE BABIES etc.

Being 8 months pregnant I can't exactly STOP having more babies at the moment:rotfl: It's pretty much a done thing at this stage

Why stop what I'm doing? I'm making the best use of the money in my opinion right now with switching 2 bank accounts to get 5% deal on first £5000, thus having emergency funds in place and than overpaying mortgage - my rate is quite high in comparison at 3.85% so it is more beneficial for me to OP than put in a 2% saving account. I have more than a year so anything I can throw at my mortgage right now will mean better deal when my fixed rate is finished. Even if the national interest rates increase if I lower my LTV down to 60% - as is my plan with OPs - I should still manage to secure a good deal hopefully.

gallygirl

Weronika wrote: »

Also, to clarify, I wrote it wrong: it's current worth is £40000 but I put only £10000 at the beginning, so even with the downturn the investment plot already proved to give decent return on money. Just need final push to finish building the damn thing and start renting it out so it can earn me 'tangible' cash, not a paper value! (Although the rise in value itself is good for getting approval for mortgage if it comes to that)

:mad: Don't count on it - my 'asset' of a fully paid for holiday home was seen as a liability when looking for mortgages as it needs upkeep :mad:

getmore4less

Sounds like a land bank deal.

If this is thriough a company good chance it is dodgy

no one buying == worthless for now.

what research have you done?

which country?

Weronika

getmore4less wrote: »

STOP WHAT YOU ARE DOING.

I can't comment on the investement it may be good or it may be a big mistake but you need a PROPER plan for this

Of course, if my logic is flawed, please feel free to point it out, but I think the OP are the way to go after maxing my ISA and new current account £2500 @ 5% x 2 allowance as savings.

Because my mortgage is 3.85% any OP are the best way to get best return on my money and I can withdraw them when my deal ends.

Because of the relatively short time frame I am not exactly in position to gamble any money in funds/stockmarket in my opinion, so I just went for the most secure way of saving.

Weronika

gallygirl wrote: »

:mad: Don't count on it - my 'asset' of a fully paid for holiday home was seen as a liability when looking for mortgages as it needs upkeep :mad:

Ouch! Sorry to hear that!:eek:
the new mortgage would be against the property itself so rise in value is beneficial in my case.

Weronika

getmore4less wrote: »

Sounds like a land bank deal.

If this is thriough a company good chance it is dodgy

no one buying == worthless for now.

what research have you done?

which country?

1. It's not dodgy, there is ex-military involved:beer:
2. Loads of research, the value of the plot itself is rock solid (30 min to international airpoirt, 25 min to 2nd biggest city in the country so loads of potential for renting out)
3. The other plots - the value based on recent sales of nearby plots suggest they tripled in value so I was reluctant to sell to those offering much less for them last year. I hold on to them and they continue to rise, but now being winter = dead season for holiday home plots I had no decent inquiries for some time;)

getmore4less

Weronika wrote: »

Of course, if my logic is flawed, please feel free to point it out, but I think the OP are the way to go after maxing my ISA and new current account £2500 @ 5% x 2 allowance as savings.

Because my mortgage is 3.85% any OP are the best way to get best return on my money and I can withdraw them when my deal ends.

Because of the relatively short time frame I am not exactly in position to gamble any money in funds/stockmarket in my opinion, so I just went for the most secure way of saving.

If these stage payments are needed to stop you losing money they need to be treated just the same as zero % loans like the CC or any other debt.

Your current plan is mostly dependent on raising more debt or finding future income without ny idea if this is possible.

Do you have a job that you can go to?.

Cash preservation for flexability once paid offthe mortgage you might not be able to get it back.

You said earlier today you had no idea what income would be and can't plan yet you have some serious requirements that dwarf a few quid saving on batch cooking.

it's almost like you are in denial hoping it will sort itself out.

Weronika

getmore4less wrote: »

... yet you have some serious requirements that dwarf a few quid saving on batch cooking.

it's almost like you are in denial hoping it will sort itself out.

:T Yup, finally I got somebody to agree that batch cooking is not going to make me rich and famous:rotfl:

Don't get me wrong, I have a great respect for anybody doing all they can to save money, it's just in my case it's more beneficial If I actually spend time preparing to earn more in a future (training) than slave away peeling veggies!

I can have a job if I wanted to (so it's one of the options) but I plan to spend this maternity leave preparing to start my own business as I can earn much more independently as a consultant than in a salaried job - and I need that 'much more':p

I do have loads of plans and investments already in motion - all going in same direction - to be able to be mortgage free and live on decent income while not being tied up to desk 9-5.

I started this diary to focus on one aspect of all this - overpaying current mortgage but to be honest I feel discouraged right now.
There is loads of helpful people in here and I appreciate all feedback but...

When I read other people diaries they get lovely comments about how well done they started overpaying mortgage or how well done they use saving accounts to maximise the 0% CC opportunity or how well done they get buy to let properties - what I got so far is how I HAVE TO batch cook otherwise it's a clear indication I am not serious about saving money or that my investment surely it's going to be dodgy or that I'm doing everything wrong because I don't believe SOA works for me coz my plans span longer term and are more complicated than just paying off couple of credit cards.

Anybody getting buy to let properties can't guarantee it's going to be rented front to back all the time and that the property value would increase and so on. At least I know already the plot and building itself was worth it and I can sell it anytime to get more cash than I put in. Any rental income paying off the mortgage is a bonus.

Off course I'm hoping it will sort itself out - nobody is planning for their house to catch fire, national bank to get bankrupt, lose a job, the whole word to go in recession - you put safe guarding systems in place like emergency funds, insurance, spreading the investment portfolio, educating yourself but it can always go wrong.
I choose to be optimistic and since I had never had problem before to get clients my first plan is just to earn money, second sell other plots, third borrow from parents, forth get a mortgage on the place, fifth release equity in my home and so on... SO I do PLAN A and than PLAN B up to to end of alphabet really just in case;)

And I have no idea what my income next year will be, that's true. Plan A is my business, Plan B is a salaried job, Plan C is combination of both and so on.
I will do something though and in the meantime I just want to make sure any money I got at this very moment are working for me the best they could already! Hence switching deals and OPs.

Ok, rant over.

On the positive note, I received my £30 Amazon voucher for one of the switch to us deals so I can finally buy 2nd Wii remote I was planning to get for ages but couldn't quite justify expense. :j

getmore4less

For me the issue is the mixed message

currently is it appears you are not in control of the basic finances

things like

I meant to overpay my mortgage from beginning but never got around to actually doing it till now. Even than, I only set up tiny overpayment of £50 pcm. Not happy about it at all, though.

I did try doing SOA but I simply do not know the figures for even basic stuff like clothes and groceries!

I know we spend around £2000 per month although we do not get that much income anymore since I'm not working;(

I agree that the highest interest should be paid first - which would be my mortgage at the moment, but I just can't find any spare money for it. This year is going to be tough without even my part-time income and only standard Maternity pay, that's why I started to look at ways of saving money already.

It didn't include £600 for wardrobes or £500 car repair last month as I took on extra work to pay for it (so we wouldn't have to touch emergency fund). I can't do it anymore though, as 8 months pregnant and really struggling now to even walk

I came to conclusion that in my situation the best is just to continue watching my day to day spending until I can come back to work in 2013 (hopefully) and when I start earning all the extra money will go towards overpayments.

It was very hard for me to transition from full time work to full time mum - and the loss of earnings hit me particularly bad, as my wage was the one that paid for all not so essential stuff
.................

Then we have the 35y mortgage on a relatively low amount.

All points to finances that have been tight and are now even tighter.

Looking forward it is not clear if the budget will ballance for 2012.

Then you throw in these other investements and liabilities that make a significant difference.

I think you need to step back and get the basic budget sorted for 2012,

Do a ballanced SOA for 2012 so you know how much money you will have for futher investement(rather than just guessing)

Where you invest this surplus is your choice but with these longer term commitments I would think carefully about future cash flow.

Getting 2012 right will give great foundation for 2013 when earning/refinancing/debt requirements will be come a more urgent issue.


Remember a move to self employment can impact the ability to refinance.


Looking at 2012 and the SOA, lets look at an example.


Car Maintenance. . 16.67

Thats only £200, MOT and basic service will eat that, you just had an unplanned £500 bill on the car I would up the car fund to £40-£50pm to reduce the risks of unexpected repairs, if there are things like tyres than they need adding.

car insurance looks very high any savings to be had there?
(how many cars?)

You have also nothing allocated for house related purchases you have been talking about getting. Tot up what you need during the year and add to the SOA.

It takes time to get to grips with all the income and outgoings from a standing start.