New Member and a MFW

Ben-_2

Hi All,

I'm new to this site and think its fantastic!

Its my first post and i want to start on the road to MF. Sooner the better?

So a few bits about me.

I have had a mortgage for nearly 2.5 years, first mortgage being 23 at the time (Now 26). Its over 25 years and I would like to reduce this.

Outstanding amount 118'000
620 - Per month

I'm looking for some advice on how much OP i should make. Just to let you know at this stage, i do like holidays and a few luxury’s ect. so cannot commit as much as others

Even on great salarys we have got ourself in debt due to me supporting my partner through uni. This now needs to change with a baby on the way :-)

My Income After Tax 2050 (Can vary very slightly)
Partner After Tax 1500 (Not for too much longer)
Might be worth excluding hers (Self-employed) and Baby on the way

Debt - 4k Credit Card on a 0% card
Loan - 4k (Two years left)
Zero Savings - Scary, i know. I need this sorted

Outgoings

Loan 190
Mortgage 620
Food 150
sky 22
broadband and phone 30
c.tax 100
water 25
gas and electric 70
sofa 50
house insurance 20
tv license 12
TV - 0% finance 120 for 6 more months


I regulary phone up to look at ways to reduce my bills

Car and petrol is paid by my company including private (Large tax i know)

Anyway any feedback most appreciated!
Even 50 OP per month seems to make such a big difference

Lois_E

Great that you want to get things under control instead of letting the banks have everything their own way. Well done and welcome to MFW. :wave:

In order to advise on OPs, we'll need to know the interest rate on your mortgage and any restrictions on overpaying it, the interest rate on your loan and any restrictions on overpaying that, and when your 0% deal on your credit card runs out.

Good luck!

Ben-_2

Thanks for the reply

A few known details are:

Mortgage was two year fixed with Bank Of Ireland 3.94%
Now 2.99% above base
I spoke to my Mortgage company today, i can make unlimited over payments with no fees at all. But i cannot set up a standing order or adjust my direct debit... Looks like i have to phone up each month to make a payment

Made my first OP today of 50 pound :-)

Credit card is 0% until feb next year
Loan was best deal around at the time but do not know exactly to hand. Interest was preloaded, so makes no differance paying it off early. Its with Santander

Thanks

Lois_E

Ben- wrote: »

Thanks for the reply

A few known details are:

Mortgage was two year fixed with Bank Of Ireland 3.94%
Now 2.99% above base
I spoke to my Mortgage company today, i can make unlimited over payments with no fees at all. But i cannot set up a standing order or adjust my direct debit... Looks like i have to phone up each month to make a payment

Made my first OP today of 50 pound :-)

Credit card is 0% until feb next year
Loan was best deal around at the time but do not know exactly to hand. Interest was preloaded, so makes no differance paying it off early. Its with Santander

Thanks

Thanks Ben-

In your situation I would focus first on building up an emergency fund. Then start chucking money at the mortgage. I find it helps to calculate (and include in my sig) the value of my house borrowing minus my emergency fund, so that saving money in the EF gives me some feeling of making progress even if it's not actually OPing the mortgage. You may like to have a combined fund that's both for emergencies and for baby stuff. I'd also advise heading over to the old style board and/or family board (or getting your partner to) to pick up tips on how to provide for a baby without spending thousands. The path of least resistance with a new baby (especially your first) is to spend excessively on masses of new stuff for it, but the baby will be just as happy with a smaller quantity of stuff sourced much more cheaply.

moomi

Lois e- in our signature you have isa £2500 then total less isa £85,620.67- I'm just being nosy but is this what you have or what you owe?

Lois_E

Hi moomi

I owe £88,120.67 (mortgage plus two interest free loans from family) but I have £2,500 in my ISA, so if I emptied my ISA to pay off more of my house, then I'd only owe £85,620.67.

moomi

Ahh I understand better now! Sorry for being a nosy Parker!

TwinnyD

Hi Ben,

Congratulations on having baby on the way and becoming a MFW. You may find it useful to fill in a statement of affairs which can be found here http://www.stoozing.com/msoc/soacalc.php as your outgoings seem to have a few areas missing clothes, mobiles, any travel costs, life assurance, birthday/Christmas presents etc.
This will then give you your true position of how much you have left each month to cover debt repayments, build up emergency fund (enough to cover you for 6 months is often recommended) and make overpayments on your mortgage.
Some mortgage accounts allow you to withdraw any overpayments you've made so worth checking if yours has this facility as it can then double up as your emergency fund.
Good advice from Lois re cost of babies, also ebay is great for both buying and selling baby items as are nearly new sales and fb groups.

Good luck with your journey

Bufger

Hi Ben,

You have a very similar situation to me! In also have a similar outstanding amount and we have pretty much similar salaries. I'm probably a year or two ahead of you in terms of the kids (I'm 28 and have 2).

Its important you build up the emergency fund. If your partner only gets statuary maternity pay its ok for a while but when it drops right down its hard to live off the one wage. You should try practicing living a few months on that income now so you're used to it and put anything you save from doing that into the savings pot.

I found it better to split the tasks in two. My wife saves for savings and I save for mortgage overpayments!

You dont need sky. I switched to freesat and its fine for my needs. when baby arrives you wont have much time for TV

Also be careful on TV and sofa 0% purchase 'deals' in future as the interest they would have charged through finance is hidden in the purchase cost from the outset.

Best of luck with everything! Your moneysaving will slow down a bit whilst you have kids and adjust so remember yours and your partners sanity are more important and you'll learn some valuable lessons over the next few years then when the little ones go back to school you'll have massive saving potential

Ben-_2

Thanks for the comments Bufger
I'm now saving

:T

I'm happy because I'm with the Bank of Ireland and their rates are going up by 50% from 2.99 to 4.5%
But because I took mine out through the post office, there no change... So lucky!!

Could this change though?

Ben-_2

The bank is to increase its standard variable rate (SVR), which is charged after introductory offers expire, by one-and-a-half percentage points from its current level of just under 3pc.

The increase is much larger than recent rises in SVR announced by other lenders.

Borrowers with Bristol & West and Bank of Ireland-branded mortgages will pay the higher rate, although customers of the Post Office, whose home loans are also provided by Bank of Ireland, will not be affected.

The rise in interest rates is to be implemented in two stages. In June the bank's SVR will increase by one percentage point from 2.99pc to 3.99pc, then in September it will increase by a further half a percentage point to 4.49pc.

Several lenders have recently increased their SVR. Santander raised the rate for new borrowers on some of its loans over the weekend, while Halifax increased the SVR for some customers by almost half a percentage point. NatWest, part of Royal Bank of Scotland, is raising the rate on 200,000 mortgages by a quarter of a point to 4pc.