Mortgage Free in Three Yrs

ms_london

Hi. Just found this post & thought I would say what an excellent idea it is. I would love to join, but dont have a mortgage as yet :rolleyes: - so I cant. But something I will definately do if and when I do. I am pleased that people are jumping on this bandwagon in an attempt to better their financial situation. Definately a good next step once the other debt is paid off...

I just need to figure out how I can afford a house to start with and go from there! But wont be home for another year or so, so wont worry about that just yet - although I would like to own a house before I turn 30.... (must stop giving myself these bl**dy goals - I am the only one putting pressure on myself!!)

Keep up the excellent work - it looks as though you are all doing really well!! :T :T :T

Dithering_Dad

TheCount wrote: »

Hi there, your 3 year plan does seem very optimistic. I wouldn't put yourself in the grave trying to pay of the £140k, after all it is a lot of money. Like yourself, I am a contractor and operate through a Ltd company, earning a similar amount to you when working, however the very nature of contracting and the increase in your earnings means that there will be times when you are out of work. You will have done very well if you manage to pay off half of your mortgage, actually have some form of life and pay your CT and Income Tax when they fall due.

I have been through the very same process, however I decided to downscale in property, realise the money, pay off the mortgage and invest in a holiday home in Ireland. My motto is "live lean" and that means not renting additional bedrooms from the bank.

Good luck and don't put yourself and your family under too much pressure.

Thanks for your concern, but I certainly won't be putting myself "in the grave" to meet the challenge. Far from it in fact - the combination of easy to access cash in my offset and capital payments to my Interest Only mortgage is actually making me feel more and more comfortable with the ups and downs of contracting, not less. The smaller my mortgage, the less stress I feel about periods of non-work.

As I've mentioned many times, this challenge isn't going to consist of three years of scrimping and saving and doing without. It consists of getting the cheapest deals for things I buy, getting the best price for my phones, utilities and living within the salary I had prior to going contracting.

For example, since the challenge began I have paid/offset 30k of my mortgage, had my back garden landscaped and had two holidays (ski trip in Austria and Center Parcs in Lake District). We're off again in two weeks to Portugal.

How could I manage this? I got three quotes for the garden and played the landscapers off against each other to get a great deal. I have a friend who is a ski instructor who sorted us out with cheap accomodation through a friend, free ski hire from the shop he works in, free lessons from the school he works for and we got really cheap flights out there. We got a voucher and discount deal from Centre Parc and we've got a cheap deal for the Portugal trip by searching through the internet for our own accomodation and just getting a cheap flight ourselves. It's all about making your money go further!

As far as my mortgage is concerned, I am living within the salary I used to earn before contracting and banking the rest. With the lower taxation I now pay via dividends, the money I get from being in the flat rate VAT scheme and the high rates of pay I receive I now bank £5k a month more than I did as a permie. 5k x 36 = £180,000 extra over the three years from what I used to earn. I also have some investments that will be maturing towards the end of the 3 year period and I also have shares I received for free that I'll cash in when the time is right. I may have periods of unemployment, plus when I take a vacation I lose a week's billing but then that's what my offset money is for.

To summarise, I am doing the exact same job for a lot more money, yet still living off my (comfortable) pre-contracting salary. we're looking at all our bills to try and reduce them and we're getting the best prices for the things we buy. This is hardly "putting myself in the grave".

p.s. I'm also finding that my "pre-contracting" salary goes much further too. With the offset and overpayments and by reducing my bills by getting better deals, I have freed up an additional £300 per month.

I know you mean well in your post, but I actually felt that after reading it, that you were the one who may have made a mistake not me. If after all the tax breaks and higher pay of contracting you have to downsize to a smaller house because of the fear of unemployment, then perhaps you should have stayed as a permie, enjoyed the stability of a monthly salary and kept the larger home?

FrugalNotTight_2

I've not been receiving updates for this post recently, hence my absence. I will get my balance this weekend and post. I hope all is well with everyone.

Off to work now. Pah!

FNT

Karmacat

Hi DD

It seems that a lot of people go _pale_ _pale_ _pale_ when they see your figures! I love seeing them!!! I like your motivation, for your family, and your post just now describing what you've been doing recently is also great.

Not only are my figures nothing like yours, my business has suddenly halved (in the last month, literally) after about 5 years of very minor decline. If it carries on this way, and my other plans don't take off, I can see myself getting a part-time job to try to make ends meet. But I love seeing what you're doing, in a way I wish you'd post more - but you're working (one thing about not so much work is that I'm on here more!).

Go DD!

Badger_Lady

Hia,

I've just discovered this thread! I'm 24 and am about to move in to my 2nd owned property, with a mortgage of £137,500.

Paying it off in 3 years would be a bit much, but I'm going to try and knock it down to £100,000. In the same time, with the work I'm doing and the area I've bought in, I'd expect the property value to be around £165,000.

There's only me and the cat to look after, and this is a big old house, so I'd love to be mortgage-free by the time I'm 33 :-)

md_14uk

Number 58 reporting for duty...

Balance as at 2 August £149,995.87... Get in! :beer:

cupid_s

I pm'ed tallgirl earlier with my updates but just wanted to tell everyone:

my mortgage is now less than 50k!

I paid off £20250 this month bringing the total to £45632.25

Yay!!!!!!! :j

We still have just over 6k in ISAs and we're still trying to decide whether it's worth paying that off the balance too. My sensible side says "no" but my mortgage free side thinks "woohoo - less than 40k"!
Decisions decisions.....

Kaz2904

I've done my updates and pm'd tall girl.
Having updated my snowball I still have a dfd of september 2013 but now it is only going to cost £997.90 that month so I need to blast that away.
Anyway, shock horror, I applied for an Egg card last week and it has tracked through quidco so I presume I have been accepted. I thought I might have a little try at stoozing with my money. I am looking at getting a Tesco card as it has 12 months interest free and charges 2%.
My problem is that I cannot access my over payment. I am allowed to pay a maximum overpayment of £2599 which is £2014.90 above what I pay at present.
So, if I manage to get a BT for £2000 and whack it through my Egg card and stick it in the mortgage what would be my best bet do you reckon?
1: Repay £181.81 per month to clear it in 11 months or
2: Repay the minimum every month for 8 months and then clear it in the last 4 by stopping my mortgage overpayments.
I can't seem to work this out on the snowball calculator as it just assumes that I want to clear this first even when it has a 0% rate for a year.
I admit to getting a little befuddled but feel that If I stick the £2000 on now then it will work harder than it will in 8 months time so do feel that it will save me some money. I think I'd worked out that it would save me at least £49 after I had counted the fee.
I was then considering doing this in a few months with a credit card for DH and then maybe opening up an MBNA for myself (as IIRC) they only want £5 minimum. I'm just trying to get this clear quicker as with my current figures then I am still going to be £2766 short of my goal by April 2010.
I am getting twitchy now as we are spending lots of money at the moment (which we do have and do need to spend) but I just see it as my mortgage getting longer!
AAAARGGH, think I need to lighten up really don't you?

mojo_jojo

Just made another £500 monthly overpayment. Should take my mortgage down to under £118k. However got a letter from my insurers about my buildings and contents insurance going up by a few pounds, so that will cancel things out abit. Also as my wedding is coming up this month I don't think I will be making any more overpayments for the next 2 months or so!

I'm still considering cashing in my PEP mortgage which has been frozen since 1999 when ISA's came in. Only £1000 odd in there so I can use that to make more overpayments. It's only made a few extra pounds since it's been frozen. What do other people think of that idea?

Badger_Lady

Cupid_s wrote:

paid off £20250 this month bringing the total to £45632.25

Wow :shocked:

I don't know what to say.

How did you manage that? That's like the national average annual take-home wage in a month!!!