Mortgage Free in Three Yrs

sturgeon62

Please add me. I really need group support, I started to overpay last year after joining this board and realised that even small op's can make a difference, currently owe approx 105,000 over 22 years(annual statement due). I did lapse around christmas last year but came back strong again in february, will need reminding to stay focused this time and really feel this is possible with this thread. My aim will be to overpay £3000 over the challenge period. Thankyou

Dithering_Dad

Hi FrugalNotTight, just post what your 3 year challenge is (have a look at the other guy's challenges on page 1 for inspiration) and then I'll add you to the list.

Hi sturgeon62. I've added your details, welcome to the challenge!!

phil7445

I have a question for people in the know! My mortgage started off ages ago as an endowment mortgage. When it was realised that it will not pay off the mortgage, my advisor remortgaged me to a part endowment and part repayment. I pay a certain amount a month to Friends Provident for the endowment fund. So surely someone with a part (or even full) endowment mortgage cannot pay it off fully in a shorter period of time as I have to pay a fixed number of payments to Friends Provident over 25 years.

So I guess I can pay the repayment amount off in a shorter period of time and then have smaller payments for the endowment part until the end. Does this sound right?

I must get my figures together soon, although as I said in my first post I won't make any extra payments until my 0% credit card if paid off, which if all goes according to plan it will be December this year, so first mortgage extra payment should be January 2008. So I am following this thread to give myself ideas and encouragement etc.

sturgeon62

Just been reading the thread for more inspiration and see several people asking for advice or tips. So here is how I save, I put £10 away each week into the pig, am on a fairly tight budget, then any extras go in such as any overtime, bank holiday bonus (I have to work all bank holidays unless taken as annual leave), money I make from ebay, selling off unused or cheap buys, boot fair money, only ever done two but it all helps, £10 extra a week during school holidays as I do not need to give DD any dinner money, I have a loose change jar, everyone throws in their odd coins, money found in the washing machine!!, even pennies found in the street. My 16yr old often puts in the odd £1 or 2 as he likes to do his bit. If I was going to spend something and decide I don't really need or want it then that goes in to. I went out the other day for lunch with my mum and sisters and had allowed myself £10, Mum brought lunch so I put the tenner in the pig. I can overpay by 10% a year and am nowhere near that, I take it in at least once a month, cannot do it online.

Dithering_Dad

phil7445 wrote: »

I have a question for people in the know! My mortgage started off ages ago as an endowment mortgage. When it was realised that it will not pay off the mortgage, my advisor remortgaged me to a part endowment and part repayment. I pay a certain amount a month to Friends Provident for the endowment fund. So surely someone with a part (or even full) endowment mortgage cannot pay it off fully in a shorter period of time as I have to pay a fixed number of payments to Friends Provident over 25 years.

Hi Phil, I had the same problem with my endowment not meeting its target and so when I decided to try and pay off my mortgage really quickly, I cashed it in and put it onto the Interest Only portion of my mortgage (See my signature below). I am now doing an overpayment targeted just at that part of my mortgage until it's paid off and then I'll move on to the next part.

As far as your mortgage is concerned, the Interest Only portion of your mortgage and the endowment are not connected as such. You can overpay as much as you like (subject to your mortgage overpayment terms and conditions) without impacting your endowment. If you manage to pay off the whole of your interest only mortgage, then your endowment simply becomes a savings policy to be used for whatever you like.

phil7445

I didn't think of that. Dithering Dad, I guess if I did manage to pay it off early then the sum from the endowment would just be a big cash amount coming to me. Last time I remortgaged my broker said don't cash in the endowment but keep it going and do a part repayment. I don't think I will be able to pay it off in 3 years, but my plan is to significantly reduce the amount. I am currently scheduled to pay it off at 48, I want to reduce it to at least 45. I am currently 37.

Dithering_Dad

Hi Phil. If I wasn't planning on paying off my mortgage in the next three years, I probably would have kept the endowment going as well and just made overpayments to the point where I was sure that the remainder would have been covered by the endowment when it matured in about 14 years time.

I'm now in the position though that instead of waiting 14 years I should be able to pay the IO part of my mortgage off in the next 12 months, so the savings I'll make in interest payments for a further 13 years will easily outstrip any gains I may have possibly made on the endowment.

The absolute top priority of my MFiT quest is to pay off that damned Interest Only mortgage as soon as I possibly can. To achieve this, I have told the bank that all of my overpayments should just go to the interest only account. I'm currently on track and with the overpayments made so far I'm saving £50 per month in interest already!

phil7445

Cool well done DD. I think my aim will be to batter the Interest Only part of my mortgage too as soon as I can. :-)

Dithering_Dad

You should join the challenge then

phil7445

I would like to, but as I said I have about £1945 on a 0% credit card which runs out in December so I am battering that with £200 a month, although that makes me about £145 short which I would like to find between now and then.

So if I can afford £200 on the CC then from January I should be able to afford £200 on my mortgage. :-)