Onwards to freedom!

NorthernMonkey1

My understanding is that there were 2 reasons to keep a nominal amount in your mortgage

1) Possession of Deeds. When deeds were a physical 'thing' your bank kept them while they had a claim on the property, and once it was paid off, you then had to keep this document at a solicitor, which may incur an ongoing charge. As ownership of your property is now an electronic entry at the land registry (which you can get a copy of for £3) this is no longer a valid reason. It is still a thing in the old USofA so is a reason given in stateside blogs

2) If you have a mortgage that you can overpay, then get back the overpayments, then not paying off the mortgage can give you a very flexible large credit facility that you can draw down on at short notice

SuperSecretSquirrel

Thanks NorthernMonkey

She asked if it would have an impact on credit ratings. I know not having lines of credit can be seen as a negative, but I doubt we'll be needing huge amounts of credit anytime soon, so pretty much a non-issue I think. We both have excellent ratings at the moment, I can't seriously believe being prudent and paying off the mortgage would see us labeled as risky.

There's also the theory that porting a mortgage (if we were to move) is easier, cheaper, and less likely to be declined than a new application. Again, this might not affect us, but I guess it could.

NorthernMonkey1

If you're using credit cards for a lot of your spend, and paying them off in full every month, I can't see you having any credit issues.

I'm a heavy CC user, and have one I use for work and one for personal. All my credit reports are good/excellent because of this

edinburgher

Re. credit rating, remember that you can always appeal any decision for declined credit. If you ended up in a 'computer says no' scenario, you can appeal and any underwriter who sees that you have a paid off house will no doubt think you a very good risk.

Teacher2

I am sure you have thought about this but when your ISA pays up transfer it into another ISA wrapper as if you just cash it in you lose the facility for those years. Some ISA products offer 'transfer in' and some don't so be sure to check.

Things seem to be going well for you. Congratulations.

I was going to say that if you are only keeping your mortgage to save about eight quid then pay it off and bask in the smug feeling you will have.

However, Northernmonkey1 points out the two good reasons to keep a £1 mortgage, namely, that you have the deeds looked after and you keep open a facility for borrowing which doesn't need the affordablity checks a new loan would engender. It strikes me that this is the reason we have kept out Virgin One mortgage going.

We used it on two occasions to fund large expenses and then paid it back down without having to resort to alternative mortgages or loans. You are very diciplined in your attitude to money and will easily keep on top of things as we (stingy devils as we are) did.

On Autumn Statement Day we are hearing a lot about the JAMs, the 'Just About Managing'. I sometimes wonder whether a little advice and education about money management would not help those whose money goes in and out of their accounts like trains through a station. I have a close relative who thinks she is JAM but who has a relatively large joint income with her DH. She is imprudent and spendaholic and would think it horrific to wait for a bargain or save up for something she wanted. She told me she NEVER bought things in a sale, she works too hard to be bothered with things like that. I, in contrast, NEVER buy anything that isn't discounted at least once.

And there you are on top of every penny and prospering from it.

SuperSecretSquirrel

Thanks all for posting

I'm pretty much decided that we'll pay the mortgage off in January 2018. The mortgage is not flexible so it's not like we can claw back our overpayments (not that I would want to), we have great credit limits available on 0% cards, and we'll have cash and shares to fall back on should we need them. The mortgage's days are numbered!

As for January 2017, it will bring with it a nice 2.5k fee free overpayment allowance. I have the cash ready and waiting to be paid off in weekly £499.99 chunks

Slightly disappointing net worth figures at first glance this month. We've taken a tiny step backwards (net worth ~£500 lower than this time last month) despite doing everything right (apart from spending a little too much on baby preparations perhaps). On closer inspection, this is due to pensions losing some of the ridiculous gains seen in the last couple of months, which is of course to be expected. I have no doubt that there will be far larger "losses" in future months, it's all part of the game and nothing to be concerned about

The quarterly comparison does a great job of filtering out some of the monthly "noise", and from August 2017 onwards I will have collected enough historical data to have a "year on year" comparison each month too. It really is quite sad the stuff I find myself looking forward to :rotfl:

Overall, I'm quite pleased - sure, the total figure has dropped, but the elements that we have control over are ticking along in the right direction, mortgage ltv is down, liquid assets up, and in percentage terms the drop in net worth has had barely any effect on our 300k net worth target and financial independence progress. Here are the figures in full:

[SIZE=2][FONT=Courier New]               CURRENTVALUE       +/-MTH      +/-QTR
House Value:   [COLOR=Blue]+£125,000.00[/COLOR]        £0.00       £0.00
Cash:           [COLOR=Blue]+£47,548.11[/COLOR]     -£341.81    +£688.74
Pensions:       [COLOR=Blue]+£58,214.78[/COLOR]   -£1,139.77  +£3,905.65
Car Value:       [COLOR=Blue]+£9,050.00[/COLOR]     -£150.00    -£450.00
S&S:            [COLOR=Blue]+£12,287.27[/COLOR]     +£449.55  +£1,536.09
Mortgage:       [COLOR=DarkRed]-£26,375.33[/COLOR]     +£713.23  +£2,126.55
Due to HMRC:       [COLOR=DarkRed]-£605.94[/COLOR]      -£83.49    -£197.12
Student Loan:    [COLOR=DarkRed]-£2,196.06[/COLOR]      +£76.61    +£222.32
[B]Total:         +£222,922.83     -£475.68  +£7,832.23[/B][/FONT][/SIZE]

74.3% of the way to 300k net worth (2020 challenge), 21.1% mortgage ltv, £32,854.11 beyond mortgage neutral in liquid assets, 12.3% financially independent.

SuperSecretSquirrel

Happy 2017 everyone!

2016 was a pretty good year for us, here's hoping for another good one ahead

Here's how things stood on the 1st January 2017:

[SIZE=2][FONT=Courier New]               CURRENTVALUE      +/-MTH      +/-QTR       +/-YOY
House Value:   [COLOR=Blue]+£125,000.00[/COLOR]       £0.00       £0.00        £0.00
Cash:           [COLOR=Blue]+£47,225.02[/COLOR]    -£323.09    -£144.25   -£2,356.59
Pensions:       [COLOR=Blue]+£61,324.05[/COLOR]  +£3,109.27  +£4,894.30  +£20,153.64
Car Value:       [COLOR=Blue]+£8,900.00[/COLOR]    -£150.00    -£450.00   -£1,800.00
S&S:            [COLOR=Blue]+£13,313.37[/COLOR]  +£1,026.10  +£2,152.78   +£6,824.84
Mortgage:       [COLOR=DarkRed]-£25,662.72[/COLOR]    +£712.61  +£2,132.08  +£12,053.32
Due to HMRC:       [COLOR=DarkRed]-£380.26[/COLOR]    +£225.68     +£98.35   +£2,102.94
Student Loan:    [COLOR=DarkRed]-£2,138.37[/COLOR]     +£57.69    +£205.38     +£977.86
[B]Total:         +£227,581.09  +£4,658.26  +£8,888.64  +£37,956.01[/B][/FONT][/SIZE]

75.9% of the way to 300k net worth (2020 challenge), 20.5% mortgage ltv, £34,495.41 beyond mortgage neutral in liquid assets, 13.0% financially independent.
__________________________________________________

A new year means a new OP allowance I'll make the first £499.99 OP on Wednesday, then keep going weekly until the 10% is maxed out.

After that is all done with, baby is due, and all hell breaks loose once again :T

OH will take a year off this time, and I'll be taking a whole month. Obviously there's a financial cost to this, and it pushes back FI, but the true goal is to spend quality time as a family, not to be money earning robots - FI is just a means to achieve that. I can't think of a better time to take a break from earning money in favour of family time than soon after a new baby arrives

Slightly miffed that it's back to the grindstone tomorrow, but we're only 13% of the way to independence, so I better get used to it. This time next year, I'll most likely pay off the mortgage in full from savings. That will drop our monthly outgoings massively, which in turn will boost our FI percentage. All being well we should be at 25%+ this time next year.

I'm starting to think that once we hit 50% FI I'll feel secure enough to try something major. I don't quite know what that "something major" will be yet (part time work, mini retirements, self employment, career change, a mix of any or all of the above), but I have years to figure it out. My thinking is that once we have enough stashed to cover 50% of our normal living expenses for the rest of our lives, I can go do something risky (that doesn't risk the stash in any way) and if it all goes wrong we'd be fine regardless - I could take any old job in defeat just to keep us ticking over.

Good luck to you all in the year ahead! :cool:

edinburgher

Another stonking year SSS, you're an inspiration :beer:

SuperSecretSquirrel

Thanks Ed, so are you!

With regards to spending more than was earned last year, I think it's to be expected given the circumstances! I have every confidence that you'll be back in Micawber's good books this year

edinburgher

Here's hoping, I am watching the books like a hawk