Mortgage Free in Three Yrs

Dithering_Dad

That's a brill milestone Kaz, congrats! You're completely on track to hit your MFi3 challenge goal. Certainly a lot further than I currently am. I guess I'll probably be mortgage free at some point in the "Mortgage Free in Three - Part 2" challenge .

As far as your point about continually reviewing finances, I guess we all do this anyway when we decide how much to overpay each month. Sometimes we overpay a lot and sometimes nothing at all, dependant on how much 'free' cash we have available and what our future plans are.

In my case, a few months after starting the MFi3 challenge, Mrs Dither had to give up her job in order to take care of our little one. Obviously the loss of her income had an impact on our household budget and so we adjusted our MFW challenge accordingly. I also had to divert some of our overpayment money into a pension plan for my wife to make up for the loss of her occupational one.

The old saying 'you cut your cloth to suit your circumstances' is really true and it's what the Dither household had to do due to a change in our circumstances. In your case, having reduced your mortgage by £21,500, you could feel that you're comfortable with that level of mortgage debt and decide on a new goal, perhaps taking advantage of the falls in the stock market to build up a retirement plan.

The beauty of MFW as a strategy is that you can do it for as long as you want, whenever you want and it frees you up both financially and mentally (no more huge debt hanging over you) to seek new challenges and goals. It's also a strategy where you don't have to pay anyone a commission in order to pursue it.

A warning note though is that you can sometimes tie yourself in knots worrying about which is the best thing to do financially, and chopping and changing your goals is counter-productive. That's what I used to do before I decided to start the MFi3 challenge (hence why I came up with my Dithering Dad username). I've stuck with my MFW goal for 18 months now and financially I'm a lot stronger than I would have been if I had continued to dither and put bits of money here and there with no real logic or strategy behind it.

Back in April 2007 we were all concerned about the size of our mortgage debt and so we decided to do something about it and start paying it down. 18 months later, we're in a much better financial position and those mortgage debt worries have receeded. We're now looking back from the relative comfort we've created for ourselves and second guessing a decision made when we weren't so comfortable. The truth is that yes we could have invested elsewhere but we were to concerned about the size of our mortgage debts to do it!

EDIT: Amazing coincidence, but someone has just posted this on the House Price forum. It fits exactly what I've tried to say, but much more succinctly and eloquently:

IveSeenTheLight wrote: »

Don't live your life by what if, live your life making decisions about facts that you know at the time, be flexible and prepared to adjust when the information changes

taka

I must be one of the stranger MFiT people - I still haven't actually made an overpayment . When I signed up for the challenge I was going to take out a further advance (for flat renovations/repairs) but in the end decided not to add it to the mortgage. I'm counting the renovation amount for this challenge so I've been paying that off/saving instead as well as trying to fill my ISA. As ISA interest rates are higher than my mortgage (for now anyway :rolleyes: ) I have been feeding that instead. I have emergency money saved too (which would pay my essential bills/living costs for around 5-6 months) Hopefully during year 3 of MFiT I might actually make an OP... :rolleyes:

My long term plan is to be MF before my 44th birthday - summer 2019 (an improvement from the end of 2027) so I may be here for MTiT parts 3 and 4 too :eek: :rotfl: I'd love to be MF before I turn 40 but that really depends on being able to maintain my current salary and that may not be possible as there will be less funding around in my sector due to all the current economic chaos. Time will tell over the next few years.

Dithering_Dad

taka wrote: »

Hopefully during year 3 of MFiT I might actually make an OP... :rolleyes:

lol taka. Maybe you could join my "MFi3 - The Sequel" challenge that I'm considering Starting in May 2010 .

Though I must admit a "PWFi3" (Pension Worry Free in Three Yrs) thread may be started instead, hopefully the stockmarket will have stopped falling by then and we'll all make a killing.

taka

Dithering_Dad wrote: »

lol taka. Maybe you could join my "MFi3 - The Sequel" challenge that I'm considering Starting in May 2010 .

Yep I'd be up for that :j Just the little challenge of finishing this one first :rotfl:

MoneySavingNovice

Dithering_Dad wrote: »

Though I must admit a "PWFi3" (Pension Worry Free in Three Yrs) thread may be started instead, hopefully the stockmarket will have stopped falling by then and we'll all make a killing.

I'd join that, I'm a bit worried about my poor pension provision at the moment, but would like to paid off the mortgage first!

Not so sure that a falling market for investing in a pension is anything to worry about unduly - It's a very long-term investment and what goes down might go up. It could be a good time to invest now!

StuartGMC

MoneySavingNovice wrote: »

Not so sure that a falling market for investing in a pension is anything to worry about unduly - It's a very long-term investment and what goes down might go up. It could be a good time to invest now!

As Warren Buffet has oft been quoted in recent weeks, **get greedy when others are cautious and cautious when others are greedy....**

Whilst I'm in a final salary scheme company pension (but don't shout, each year before 65 reduces it by 4%....) the markets still impact that in terms of valuation. Hoping it picks up somewhat in 2010, as they already take 10% of my salary....

Personally I've just reduced the monthly investment in S&S ISAs for me and OH from £370 (total) to £220, and added the £150 to the OP, so am now paying an OP of 108% above mortgage requirement plus offsetting. So I'm not out of the market, perhaps using Warren's quote I'm snacking but not over-indulging?

Plan is to accelerate MF date and clear some 9yrs and a few months early in 2010. Then we can get back into investing (Cash ISA, S&S ISA and high paying savings account) which hopefully will give us a platform from which to support dd from when she is 18, and us by 60 (when I have a small anuity kicking in from previous employer pension), which is only a little over 16yrs away :eek:

shazzany

Yeh! I have just won one of the free lunch kits on martin's weekly newsletter! :money: Thanks Martin!
( had found out 5 mins previously that my hubbie didn't get a job he applied for so this really cheered me up!)


:j :j

shazzany

Quote:
Originally Posted by IveSeenTheLight
Don't live your life by what if, live your life making decisions about facts that you know at the time, be flexible and prepared to adjust when the information changes



Just read Dithering dad's quote. It so applies to us at the mo!

Kaz2904

I saw you won well done. So did I!
I was just eating me breakfast (at 7pm!) and was so excited I clapped my hands - thank goodness I was alone in the house, DH would have thought I was absolutely barking!

Karmacat

Hello all!

Haven't posted for ages on this board, but I have been lurking here, especially recently, from my "home" on the dfw board. I am *so* pleased I have to tell lots of people or burst. I'd emptied out one of my internet accounts a while back, and in July I decided to use this empty one as the place for *all* the money I earned from anything mse/dfw - anything from scratchcards to bingo to amazon sales to mystery shopping to matched betting, you get the idea, rather than my actual work. Well, I just got myself in gear to use up a free bet that had been hanging about (and that frees me to use their reload offers) and with a payment for mystery shopping thats about to go in, plus £4 I won on vernons that I originally did for the cashback, I've got up to the £500! So that means I can make an overpayment on my Nationwide mortgage!

I'm so chuffed I can't tell you, cos this is all since July that I've "earned" this actual cash - there have been vouchers and so on, but this is real money.

Now, my decision is about when to make the overpayment - I regard the time between overpayments as exactly that, *between*. Nationwide have written to me confirming that when I make future overpayments, they'll always be used to reduce the monthly payment, as I wanted them to, but they've also said:

"please note this will only be activated if your overpayment is made after your monthly mortgage payment has been received".

At first I thought they meant something really stupid like, we have to receive it by the last day of the calendar month, but do they just mean the monthly payment amount can't be reduced for the monthly payment immediately following the overpayment? Which is annoying but understandable.

Anybody got any clue? I'm tempted to do it this afternoon, I happen to be going into town and I could pay out of my current account and transfer money in to cover it before its cashed.