Cut the interest payments

Youknowme_2

Hi folks,
A long time lurker/reader but feel now time to start own diary.

Spurred on by end of year mortgage summary and lack of headway on reducing capital this can be the year that I fully convinced OH to get on board, she admits herself that she is not the most financially savvy of folks.

A bit about us, both work part time and have 2 pre school kids. Made concsious decision to look after kids rather than go out to work and use childcare. It does however mean income is limited.

We have 20 years to run on n 81k mortgage balance but in likelihood this will not be our house forever.

I have done spending diary and SOA and know there are areas we must cut back on, particularly food. But again we have some allergies in house and do buy organic where possible so there is balance to be struck here.

Anyway that is enough for now, time to get some targets set for the year.

Lois_E

Hi Youknowme and welcome to MFW - or anyway welcome to stepping out of the shadows of lurkdom and starting your own diary. :wave:

Totally understand your decision to work part time. I work part time too, to have more time with my kids. (I'm a lone parent.)

Which aspects of mortgage obsession do you intend to get into? I'm into spreadsheets and graphs, and having loads of numbers in my sig, but I don't do the reviews and surveys and mystery shopping that lots of people do.

HelenDaveKids

When our kids were little, my DH dropped a day, so I worked fri/sat/sun and he worked mon-thu. It worked really well and I think we worked out that by him dropping a day it actually cost us about £5 a week more than if he worked as it was his half day anyway and we have 3 children. It was a no brainer.

Welcome to MFW, lots of support and fun along the way.

pixnmix_2

Hi Youknowme and well done on the start of your shiny new diary

Youknowme_2

Hi all, and thanks for the welcomes.

I am a bit of a number cruncher so just starting to play around with new spreadsheets will be first priority, may need to add some shiny graphs to help OH understand easier.

Lois_E

Oooh spreadsheet graphs.
Join the ranks of the mortgage spreadsheet graph addicts.

Youknowme_2

Morning all.

First task of the New Year will be checking with provider how much we can actually overpay as understand there are often restrictions. We are two years into a five year fix.

Another thought did cross my mind in the night. If you would be looking to move house in the short to medium term is it wiser to build up a deposit fund for said purchase rather than OP.

We live in Scotland so no chains as such when it comes to purchasing but is possible we could buy a fixer up while maintaining current mortgage in five years time. At which point we would need deposit, although I guess a remortgage of existing house might be possible.

Overarching deire is to stop paying 300+ in interest each month as we are doing at present but also must look to future.

Youknowme_2

Well got the expected answer in that we can overpay 10% in the calender year, but if we do as lump sum will have monthly payment recalculated in March and will come down by 10% to keep the same term as we have at present until we can overpay again in 2014.

They suggested that we could request a reduction of term at the start of 2014 rather than March this year when they do recalculation.

May end up in perverse situation of wanting to pay off mortgage early but seeing monthly payments going down in March!

Lois_E

That's annoying. What's your interest rate? And what happens if you don't OP your lump sum until April?

Youknowme_2

Lois_E wrote: »

That's annoying. What's your interest rate? And what happens if you don't OP your lump sum until April?

Interest rate is 5.39 and if OP in April, the recalculation will only be done in March 14.

So was thinking delaying a lump sum OP to April may be an option to look at.

Youknowme_2

Well first task this year once in laws leave will be to target our food budget. According to spending diary this is coming out at about 560 a month!

This is for two adults, a 2 year old and another little one who is just starting on solids. We do have some allergies that does mean we can't necessarily take advantage of in store offers

Visited the OS forum and found some useful stuff there that we must start to try.