Newbie MFW

Carlos77

Hi Guys,

Just been reading these storeys of peoples journeys to be mortgage free, and figured i would share mine too. I got my mortgage in June 2006, and back then it was £98,000 and i was on a fixed rate for the first 2 years. After that finished, I went onto a base rate +1.25%, this ment my payments went down, so i increased it to the level i was previously paying. Since then, every time ive had a payrise, ive increased the payments by that amount, meaning at present i owe approx £49,000 with an over payment of £900 per month, so at the current rate im looking at Jan 2016 when im free. My plan is to save up and pay off a couple of £8000 lumps though in the next couple of years, so i can pay it off a little quicker.

For my personal situation, I am working full time, and the misses has recently (last week) started working after 4 years at university and we have a 2yo little girl, but with childcare costs wont really be able to use much of her wage towards the goal.

Just need to think up some bright ideas to raise more cash towards the mortgage without compromising too much on the lifestyle!

HelenDaveKids

Well done, looks like you've already travelled quite far.

[Deleted User]

I'm not a MFW, I'm a MW (Still saving the deposit!) - but I find reading the MFW boards helps to motivate me.

The only advice I can suggest it to make sure that all of your bills are as low as they can be, and that you are not paying more than you need to - check comparison sites and shop around. Utilities (gas and electric), services (internet, home phone, mobiles, and TV), car costs (insurance, and MOT), home costs (buildings and content insurances) etc etc and check cash back sites (Quidco, onepoll cash back, top cash back etc) sites for cash back offers or other incentives.

HTH

D9

BookWorm

Hello and welcome to the boards.

I'm a relative newbie myself and although not a MFW I too find these diaries inspiring. The people here are also very friendly.

Good luck!

lvm

WOW - you've done so well already! I'm hopeful that I'll be able to make a big difference like that to my own mortgage in the future.

Good luck for the next £49k!

Carlos77

Thanks guys

I always hunt round for the deals on my insurances, and have pretty good deals at the moment, and regularly go on the comparison sites to check ive got a good deal with the gas and electric. Our mobile phones are both with the orange friends and family scheme, so get 40% off my line rentals with those. We have also managed to rope family in for childcare for 2 days a week, so that will cut the costs down on that one and free a little more of the other halfs wages.

I do have a couple of weaknesses unfortunatly, without which i would more than likely be a lot further than i am along the journey. Im a bit of a petrol head, and have spent a lot of money on cars and motorbikes that i should really have used for the mortgage, and this is a double edged knife as they are not cheap to insure or run either unfortunatly. That coupled with being a bit of a gadget freak is prob not a good thing where finances are concerned! On the plus side i always have saved for these things so never bought anything i couldnt afford. Also i need to be a bit more discplined when it comes to grocery shopping, at the moment i just tend to throw anything in the basket really.

I need to get myself a bit more financial discaplin me thinks!!

edinburgher

That coupled with being a bit of a gadget freak is prob not a good thing where finances are concerned!

Get gadgets that help you save money Example - we spent £300 on LED lightbulbs, but it's cut our usage down to 50% of what our energy provider predicts.

Carlos77

Thought id give a quick update! Well keeping on track currently at approx £47k balance. Had some good news with work, had some tweaks made to my contract that will equate to an extra £8k per year. As i haven't had this before, then i wont miss it if it goes towards the mortgage! This will knock my Mortgage free date down from Feb 2016 down to Feb 2015, a nice year knocked off

Carlos77

Well i'm taking 2 steps backwards with this whole mortgage free for now, have called the mortgage company and stopped the over payments, and have started working on 'Plan B'

In June me and the misses will be buying our first BTL property. This will mean getting an advance of £30,000 on my mortgage, and getting a new BTL Mortgage for £65,000 and putting down £15,000 of our savings.

This means going in June my Total Balance will go from £44,000 unto £139,000. This kind of kills the 3 years mortgage free idea!

After speaking to the financial advisor, the way forward is keeping my £44,000 at the 1.75%, borrow the extra on my loan for 4.5% and an BTL at 3.9%.

The plan is to pay minimum payments on the original mortgage, and interest only on the BTL, and make big overpayments (£1k pm) on the advance. Then snowball this onto the BTL, and once thats done pay the original mortgage off.

The house were looking at is a new build, so maintenance should be a minimum. After doing some sums factoring the rental income (minus expenses) and the overpayments i have been making for the past few years, and providing we get no problems and its rented out most the time, then were looking at 7.5 years to be mortgage free on them both! (unless we decide to buy another one!)

HelenDaveKids

Good luck Carlos

blade68

Hi carlos, just a note about your BTL, I have had a BTL for about 7 years now which was also a new build. Although you won't get the problems of an old house, it is suprising what does go wrong! Also, make sure you have a good landlords insurance in place from the start. I got stung by a tenant that got into arrears, did a runner and left the house in a hell of a mess. New carpets right through, redecoration right through etc. Also, look into the tax implications before you pay down the BTL mortgage, if you have no mortgage at all then all of your rental income is taxable, minus expenses. if you have a mortgage on it then only the difference between mortgage and rental income is taxable.
Anyway......Good luck with your journey