Polkadot Dress and her (long) journey to mortgage freedom.....

Polkadot_Dress

Hello

I'm a long time lurker on MSE and have literally fantasised (!) about being able to start this journey for soooo long. So here is my story.

I'm 35 and bought my first house 14 years ago when property was a great investment! DH and I began our family and made a tidy little profit on 3 houses trading up each time to a larger house. 5 years ago we were in a good position with a house worth £300K and a mortgage of £148K, but made a potentially silly mistake and 'bit off more than we could chew' with the next move. We decided to move to a house that in all honesty was out of our price range. We were caught up in the mentality that we deserved it and it would be lovely to have more space, live in a nice area. You have heard it all before I'm sure! So we did it and our financial position was changed for the worse.

Oh my, the tough times began in earnest! We borrowed £309K to purchase a £430K house and moved onto an interest only mortgage (which we have been on eversince ). In addition as we were living beyond our means and having to do work on this house (bathroom, windows, floors, central heating etc) we got into a cycle of loans and overdrafts and general stress. It has not been fun. Believe it or not I have always been interested in money saving and trying to be frugal so this blunder was difficult to face.

But fast forward to today..... We have finally managed to pay off all of our overdrafts/CC debt :T and have one loan left of £6K that I want to clear early by March 2013 so we can commence the mortgage overpayments. I plan to stay interest only but make capital repayments of at least £1250 a month....more if I can find it. The reason I don't want to switch to repayment is I am worried about job stability for me and DH and want to ensure if one of us were made redundant we could survive on one income in the interim. But advice welcome on this - keen not to keep on making financial mistakes! Our existing interest only payments are £772 a month on a rate of 2.99% that ends in November 2013.

What else can I tell you, I have 3 children, 2 boys and a girl from age 13 to 7. We have a labrador puppy joining us in a week (an unexpected windfall has paid for this!) which we are all hugely excited about. Not a Christmas present I promise - just made sense that we'd have an extended period of time off to settle the new arrival in

I love lurking on here and really looking forward to joining in with you all. I am a bit of an all or nothing girl so will need plenty of motivation to 'stick with it!'. I'm a little chaotic at times but generally quite positive so hope I can make a proper dent in this mortgage and change our financial future.

Thanks for reading
Polkadot Dress x
(username made up last night as that's what I was wearing :rotfl:)

heartbreak_star

Good luck with it - am hoping to convince the fella to go MFW once we have our unsecured debt paid

HBS x

lulabelle1

Welcome aboard!

I wish you all the best with your journey and will subscribe to your thread to see how you get on...

There's lots of lovely people on here and I would reccomend taking a look at and subscribing to some of the diaries to keep the motivation going.. Also, there are lots of tips to be found in other peoples diaries that might help you with your journey....

L x

Polkadot_Dress

Thanks Heartbreak Star - I thought we'd never get to this point but so excited to be about to tackle the 'monster' debt.

Consider the smaller stuff as practice!!

Polkadot_Dress

Thanks Lulabelle - goodness there is much to explore and lots of inspiration to be had.

I had already subscribed to your diary yesterday - thanks for subscribing to mine.

I do feel like I know lots of people, I have been lurking around here for ages and not joining in as I felt it would be too frustrating to join in yet not start my journey :rotfl: Ridiculous probably but there you go.

skint_spice

Good luck in your journey, I love a nice frock too

Polkadot_Dress

Have opened an ISA online this morning with Barclays and put in £5, am going to use this to build up my paying off the loan fund (which I need to do before commencing the mortgage overpayments)

So only £5995 to go by 31st March :rotfl:

But I do kind of have a plan of how I'll manage this along the lines of:-

Jan, Feb and March overpayments of £1250 which I'll allocate to loan instead of mortgage = £3750
Council tax payments for Feb and March which are 'months off' I'll divert to the loan = £440
Bonus expecting in Jan = £300
Existing loan payments of £300 per month which will continue to be made in Jan, Feb and March = £900

Which is a grand total of £5390 leaving £610 to find more creative ways of raising! It is not going to be easy, and I am already wondering if I am being over ambitious with this :eek:

Watched Marley and Me last night in preparation for our puppy arriving next Friday (lots of tears from both me and DH), and will spend this weekend dog proofing garden and house, i.e blocking up holes in fences and generally de cluttering.

newgirly

Hi polkadotdress ,congratulations on finally starting your diary:) Your situation sounds a bit like mine, we purchased a house we really couldn't afford at the time, then got into debt that we only cleared a couple of months ago.

Its so addictive oping, do you have a limit on op's? If not its probably better to stay IO, as you say it gives you a bit more security if you do have a drop in income temporarily.

Anyway best of luck with it

Polkadot_Dress

Thanks Newgirly

Our limit for overpaying is 10% of outstanding balance per year which I don't think we will achieve this year - so will stay interest only. Just worried about it not being automated I guess which means I have the option to find and excuse not to overpay

Polkadot_Dress

We spent last night choosing and uploading some new budgeting software.

We have used Ace Money for the last 6 months and it was really useful and motivational - I loved how I could forecast how healthy things would be in future if we sticked to our budget.

Anyway during last month we upgraded our OS on the Mac which is incompatible with Ace Money and I was getting very twitchy that we couldn't use it. We hadn't captured our expenses for about 3 weeks and I didn't like it at all! Out of sight and out of mind meant I was getting a bit 'relaxed'. DH did some research that indicated there was no immediate fix for the incompatibility problem (can you tell I'm completely untechnical through my explanation of this :rotfl:) and we needed to find an alternative. We thought about a good old fashioned spreadsheet but I wanted something that would be super easy to fill in and I could do forecasting with. So we have gone with Moneywiz which I am really pleased with so far.

Rather a stressful couple of hours getting the data into it though :rotfl:

It also has put a more realistic view on this £6k target by the end of March. Think I am going to need a miracle.

gallygirl

Polkadot_Dress wrote: »

Which is a grand total of £5390 leaving £610 to find more creative ways of raising! It is not going to be easy, and I am already wondering if I am being over ambitious with this :eek:

No point setting an easy target - that would be boring :rotfl:.

Polkadot_Dress wrote: »

Our limit for overpaying is 10% of outstanding balance per year which I don't think we will achieve this year - so will stay interest only. Just worried about it not being automated I guess which means I have the option to find and excuse not to overpay

Manual OP's are the greatest :T. So much more fun than casually checking your bank account and seeing the money has gone. Plus, making manual payments means you can make lots and lots of little ones which keeps your interest up .

Good luck - the discipline you've obviously shown so far will help you and how much more fun to see a mortgage balance come down than pesky credit cards :j.