Quest To Pay Off My 150K Mortgage in 3 Yrs!

Dithering_Dad

bobsa1 wrote: »

OP can I ask how you got started in your own business as I'm looking to do a similar type of business.

Mnay thanks

Hi bobsa1, I went onto https://www.jobserve.com and found a contract where they were willing to wait for my 4 week notice period, handed in my notice (Gulp!) and went to https://www.sjdaccountancy.com who did everything else (set up my limited company and my company bank account, gave me loads of advice on how to start up as a freelancer. I hope that the board administrators don't mind me copying in these URLs, I'm not afiliated with either of these sites - just received good service.

I got increasingly stressed as my end date loomed closer until I finished as a permie and became a contractor. The first month was pretty stressful because I was way out of my comfort zone, but I'm really into it now and enjoy the freedom of being my own boss - plus the financial rewards speak for themselves.

I mentioned on another thread that I think if anyone has saleable skills and fancies having a go at being their own boss, they should go for it. Let me know if you decide to take the plunge. If you need any other information just PM me and I'll try my best to help.

Kaz2904

AH, I SEE! Hmm, seems like you have been going so much longer than you have! I have to say you've made massive inroads for a short space of time. So you could be mortgage free by 135 days? LOL! Wouldn't that be great!- Sigh. I'll just go and count my beans now!!! Well done you're going great guns keep up the hard work.

Dithering_Dad

Kaz2904 wrote: »

AH, I SEE! Hmm, seems like you have been going so much longer than you have! I have to say you've made massive inroads for a short space of time. So you could be mortgage free by 135 days? LOL! Wouldn't that be great!- Sigh. I'll just go and count my beans now!!! Well done you're going great guns keep up the hard work.

Hi Kaz, I wish I could be mortgage free by 135 days, how cool would that be! Well, I guess I could be if I sell the house and rent, but that's not really the point of the exercise.

I had a bit of a financial setback over the Easter holiday period, which means that I won't be paying anything else on my mortgage until my next invoice is processed. The setback was being on holiday with Mrs Dither and the little ditherer kids. We went a bit mad over the holidays and spent quite a bit on a new PC, several meals out and day trips/activities.

I did manage to drag myself (kicking and screaming) away from a lovely 40" LCD TV in Currys, so it could have been a lot worse. This challenge is going to be MUCH harder than I thought!!

Kaz2904

Ah see our telly blew up last week and DH bought the 42 inch lcd. He did haggle though which I'm very pleased about as he's never done that before!
Did you go away? Everyone needs to have a break and like you said earlier 15k in 15 days is ok! Just look at your offset. I just need to pull my finger out and get all my stuff sorted and start bringing in some extra pennies from cashback sites. I think I will definately try the separate buildings and contents insurance this year to get double cashback.

Dithering_Dad

We didn't go away, we just went on day trips to theme parks, bowling, cinema and stuff like that.

We replaced our PC with a new one but convinced ourselves it was ok because the last one was 5 years old and our kid's new games didn't work on it. The irony is that as the new PC is running Windows Vista, the older games no longer work. Sometimes you just can't win!

The offset is looking good, and should look great after the next two months, but then my current contract ends and so it may be used to finance us for a while. If I'm lucky though, I'll be able to line up a new contract so that it starts immediately after this one and so I won't have to dip into the offset at all.

Dithering_Dad

Just phoned my mortgage provider and my new mortgage is in place! Yay!

As I mentioned in a previous post, I cashed in my crappy endowment and put it onto my mortgage and then increased my monthly mortgage payments to include the £60 that I used to pay onto my endowment. I then signed up for a new 3yr reduced rate mortgage but told the bank to keep the repayments at the increased level (including endowment money) so I am now making an overpayment of £207.11, all of which I have asked to be paid into the interest only portion of my mortgage. This is without any change at all to my usual monthly outgoings. If I can make additional cutbacks via MSE tips then the overpayment will increase further, again without actually increasing my outgoings. How cool is that!

I also found out that I am repaying the following each month on each mortgage account:

Interest Only Part: £16.53
Mortgage Part: £137.81
Home Ext. Part: £104.00

I was puzzled about the repayment on the interest only part of the mortgage but found out that while I can specify a single account to pay my overpayments to, the interest I save from making overpayments is spread across all three accounts. The overpayment made so far (the endowment) means that I am saving 3 x 16.53 = £49.59 across my accounts. This will increase once my offset savings are added into the equation.

I've now moved into that wonderful repayment spiral of making overpayments that reduce the mortgage balance, reducing the interest payments and increasing the overpayments which then further reduces the mortgage balance that then further reduces the interest that further reduces the balance, etc, etc.!! It's like a magical financial "Helter-Skelter" that will leave me mortgage free by the time I reach the bottom of the ride.

Wheeeeee! :rotfl:

Dithering_Dad

Short Update:

I've now changed my phone company to Talk Talk and so get the free broadband, this is saving a few quid on my old telecoms package. I already have one of the cheapest Gas/Electric suppliers for my region, so I'm staying put there. My cheaper life assurance is "being processed" and I'll be looking at getting better deals for my car/home insurance once these are up for renewal. I know all this won't net a great deal of cash, but every penny helps.

I have also decided to set up a Cash ISA for both Mrs Dither and myself. I'm paying 5.3% on my reduced rate mortgage, so the Barclays ISA at 6.5 will net about 72 quid extra in interest for the year, not a fortune but still 72 quid for free. I tried to get the Alliance & Leicester 8.1% ISA but I'm a current customer so not entitled to the deal .

Finally, I am about to embark on a voyage of stooging. I have applied for my Egg card to use as a mule, and once that has arrived both Mrs Dither and myself will try and balance transfer as much cash onto it (and then into our offset) as possible. Even with 3% BT fees, we're still making an additional 2.3% in interest over the year. If we can BT 20k between us, we'll make an additional £460 in interest for not much effort. We should get more than this because a lot of the BT fees are 2 - 2.5% rather than 3%, but I based my calcs on worst case scenario.

The main aim of my quest is obviously to pay off my mortgage in 3 yrs, and to use any and all MSE techniques to do it. However, I don't want the quest to impact my current standard of living (i.e. I want to "avoid all the bread and water parties" as one poster succinctly put it. All of the above money saving techniques will all have a positive effect on my cashflow, without a negative effect on my lifestyle. I'm also determined to live within the standard of living I had prior to starting my own business (which was quite comfortable) and plough the extra money into my mortgage.

I hope that my Quest Blog is of interest and relevent to other MFW's - I know that not many people can afford to stash away an additional +3k every month, but everyone can put into practice the above money saving schemes and can also try to live for the next 3 years within their current means (i.e. any overtime, bonuses, payrises or additional income is ploughed into their mortgage). It's be great if other people joined the 3yr quest and we can see how much we managed to pay off at the end of the 3yrs. Please post or PM if you interested.

dang

Dont forget you need to get a deal for a minimum of 12 months for this to be true -

"Even with 3% BT fees, we're still making an additional 2.3% in interest over the year"

Also look at how minimum payments will effect your stooze pot - this wont be much of an issue with mbna as you will only be paying them around £5 p/m, but some of the others have you paying back 3% a month - which can soon eat into the pot.

This is a good site for doing the sums -

http://www.whatsthecost.com/stoozing.aspx

ThankYouAndEnjoy!

Dithering_Dad wrote:

It's be great if other people joined the 3yr quest and we can see how much we managed to pay off at the end of the 3yrs. Please post or PM if you interested.

Hey, Im up and running with my 4 1/2 year £100k Debt Free Plan (majority on mortgage - got my own blog) By my calculations, i should be about £75k of the way there within 3 years, so would like to 'join the quest'

Dithering_Dad wrote:

I billed over £16k for the month

Your first months income is impressive - before deductibles obviously. Any chance of you completing your challenge early?

Dithering_Dad

ThankYouAndEnjoy! wrote: »

Hey, Im up and running with my 4 1/2 year £100k Debt Free Plan (majority on mortgage - got my own blog) By my calculations, i should be about £75k of the way there within 3 years, so would like to 'join the quest'

Your first months income is impressive - before deductibles obviously. Any chance of you completing your challenge early?

Excellent! Good to have you aboard!

That first month's income was a blip, never to be repeated. For one thing I won't ever work those daft hours again, and for another I doubt that I'll ever find a client who is so desperate and has so much money (Oil company with deep pockets).

I already know from working out how many working days I have with this client until I finish at the end of May how much I will earn each month. A lot less than 16k unfortunately. Most of that cash went to paying off my start-up expenses and paying off my debts.

So, to answer your question about whether I'll complete my challenge early - no chance! I'm going to really struggle to pay off the mortgage in three years, especially if I have any periods without work, but then a quest that is easy wouldn't be much fun!