Mortgage Free in Three Yrs

GettingThingsDone

Yes, sorry all - I was just irked by DD's view that I am anti-MSE/MFW. I do read this thread, so keep up the good work - despite the battering I get from DD, it is actually one of my favourite threads as it's aspirational, and it reminds me of a younger me

DD - C'mon even YOU hadn't checked your mortgage product properly; I'm staggered you didn't know about your prepayment reserve. You're an influential poster so I think it was the sense of disappointment that made me come out of the lurking shadows and go on so much.

Please let me get back to lurking... (I'm happy to take pm's though)

cupid_s

Sorry to reply, but in a way I agree with GTD. I have no prepayment reserve, and know I can't easily take payment holidays. We don't have income protection - it is quite difficult to get when you're on a contract that you know is going to end in 2 years regardless.

Furthermore if I want to get back any of my overpayments I must effectively re-mortgage but any additonal borrowing will be 0.5% higher interest than I'm currently paying and be accompanied by a whopping great arrangement fee.

Having said that I am so glad I've been overpaying because my mortgage is only £270 pm now! So we know we can easily make these repayments if one of us is out of work. Even if we both were our meagre savings would last quite a while with our mortgage being so small. Also when my student funding ran out and DH started work, we were eligible for WTC which amounted to almost 1k in total which we wouldn't have got had we not paid almost all our spare money off the mortgage.

So I doubt I'd have done things much differently but it wouldn't have hurt to know a bit more about possible negatives before I started madly overpaying my mortgage.

Dithering_Dad

cupid_s wrote: »

... but it wouldn't have hurt to know a bit more about possible negatives before I started madly overpaying my mortgage.

I remember when I first joined MSE, a contributor called Sloppy Saver was giving the same message as GTD. Suspiciously similar, now that I think about it. :think:

I recall that at the time you* deservedly gave him short shrift for his views on the negative aspects of tying up money in mortgage repayment. He did mention the issue of paying money onto a mortgage and not being able to get it back.

At that time I was in GTD's position, where I was a DFW and lurking in the MFW board. Here is my first ever post on the MFW board .

http://forums.moneysavingexpert.com/showpost.html?p=4373575&postcount=129

* I popped back into Sloppy Savers thread to make sure that it was cupid who gave sloppy such short shrift and found my first ever MFW post

cupid_s

I wouldn't exactly call it short shrift . I was initially very interested in his posts but unfortunately I tend to stop taking notice of people once they start calling me names.

Hence why we need nice uninsulting people to put the message across. Though as I've said given the circumstances I wouldn't/couldn't have done much different.

Dithering_Dad

I laughed when I found my post, it was a bit like looking at photo's of yourself when you're a teenager with a dodgy 'trendy' haircut. Rather embarrassing!

I can't believe how far I've come since those heady days of finding MSE and sorting out my debts on the DFW.

Happy days.

GettingThingsDone

Look DD, I'm trying to lurk here!!! I've got nothing to do with Sloppy Saver or any of that anti-MFW stuff. I had a scan through that thread, and Sloppy Saver's first post ends:

Now, I think we've all seen sense and should now all leave this thread and move across to the Pensions & Annuities one.. come on.. follow me!!

I'm the last person to have any business in there!

As I've said a few times now, I'm professionally involved with mortgage KFI documentation and there's a reason why they exist i.e. bad mortgage advice given out in the 80s and 90s etc. Funnily enough, one of the potential problems facing the 'country' now (or in 20 years) is the online self-selection of inappropriate mortgage products.

As you rightly say DD, this thread is for those on the MFiT journey - I've apologised for intruding earlier, so just stop attributing incorrect views to me - please!! And let me get back to lurking. Thank you.

StuartGMC

DD it wasn't *so* long ago; just shows how quickly we can change when focused and I think the online era has really helped people get chance to control their own destiny.

(My own web site just hit 10yrs old and if I look on the Wayback Machine a few pages are cached there, presumably in perpetuity? How will the future view us is interesting, but longevity of these forums and others is a passing thought I have occasionally for those who would study our culture in the future. Hopefully somewhere these forums are being captured too, although your early posting could then be cited for ever and a day! :rotfl:).

Well done on your achievements

1274

I just read bits of the thread DD linked to. I hadn't read it before because I only discovered MSE a year ago. I think the main benefit for me of overpaying is that it "hid" the overpayments from me, which savings into a bank account would not have done (don't know why, but I always seem to spend positive balances in bank accounts even savings ones, but would only pull back money from overpayments in emergency). I know myself, if I wasn't overpaying, I'd have frittered the money on nice holidays and going out, even if I had the best intentions to save it. For anyone with poor self control on spending like me, overpaying is good because you have to phone up to get the money back, not just swipe a card! (I have a fully flexible but not an offset mortgage, obviously card swiping with reckless abandon would increase your mortgage if you had the latter, which is why I don't!)

Another benefit is that it allowed me to make choices at a relatively young age about what I do for a living. Prior to reducing my mortgage by using up some overpayment funds, I needed to clear in excess of £2.5K per month because my mortgage repayment was £1.5K. Now I need to make £1.5K, because my mortgage repayment is £500. Because of that, I have more choices about work than I would have had if I hadn't overpaid (and spent my savings, see above)

Thirdly, I had intended to keep building up my ISA as well as overpaying, but I just couldn't match my mortgage rate because savings rates are lower than debt rates, even "safe" debt like a mortgage. So I emptied the ISA to pay the mortgage, "gaining" around 0.75% on the money because of the interest rate differences.

gallygirl

GettingThingsDone wrote: »

And let me get back to lurking. Thank you.

:rotfl:Sorry, I find this really funny :rotfl:. GTD you're like a girl I work with, so easy to wind up .

I do think you've raised some good points. It's a more sophisticated argument, but the same in principle, to one I had around 20 years ago with someone who was boasting about having 3k in the bank - but owed most of that on a cc at x4 the interest. Most people on here however are using MFW as 1 part of their strategy for the future. I am lucky in that my OP's (I have made capital repayments in addition to having money in offset) are flexible and I can ask for them back, and take a payment holiday, if/when I require. Money is put into my offset within 24 hrs & can then be transferred out. I also have critical illness cover but not redundancy - I'd have to appeal to OH's better nature (:eek: note to self - best start researching redundancy cover :eek:). I have some other savings and shares and I also pay into my pension and am delighted that the drop in fund prices means I'm getting so much more for my money :rolleyes:. And we have a few BTL's which we also intend paying off the mortgages on (or at least saving the equivalent in high interest accounts.) That's my other long term income plan - 'luckily' they are at or near the bottom end of the market so not really affected by the economy - if tenants lost jobs the rent would easily be covered by HB.

However, despite taking an interest in all my investments, and pleasure when their value (used to) increase, MFW is the one which has inspired me. Perhaps because it's easier to measure the impact of the overpayments. However, a sobering thought for all of us is that although we're all overpaying like mad, due to falling house prices we've all got less equity than before .

GettingThingsDone

Thanks (I think??) gallygirl

You and your OH sound pretty sorted. As I said earlier, I'm a follower of MFiT - my strategy of getting to MF first time was simply to earn lots of money, which crudely speaking is all everyone else here is doing.

Also - I forgot to thank you too cupid_s, at times I thought I was just talking to myself (and DD)...

gtd