Only just had my offer but I'm a MFW!

Hello all,

I've been so inspired by a huge number of the threads on here there's no doubt in my mind that I'm going to OP on my mortgage.

I'm a first time buyer (on my own) and I've just had my mortgage offer through for £105k. I have a 12k deposit. There's no way on earth I plan on paying the building society £198k:eek: over the life of the mortgage!

My monthly payments are going to be £524 a month. I come out with £1700 net pay after tax. My £130 pension is taken out of my gross pay. I'll rent one of my bedrooms out to a friend for £250 a month. I've got a guaranteed £7k payrise over the next 3 years and 8 months, incremented each November(in addition to cost of living payrises). I estimate to have between £1000-1100 a month after all bills are paid.

Being a new build property (2009) I'm expecting it to be rather efficient so my utility bills shouldn't be too expensive. My cousin lives in a similar although slightly smaller 2bed house and he's paying less than £80 a month for gas electricity and water.

My mortgage is on a 2 year fixed rate at 4.39% with Yorkshire Building Society. My plan in the first two years is to get down to an 85% LTV (from 90%) to be able to get a better mortgage deal when the 2 years are up. This means I only need to manage £100 a month OP's for the first 2 years. In reality I hope this will be closer to £200 but I want to get settled and see my exact outgoings in the first few months but I may well OP £100 and save £100 for a rainy day.

My overall plan is to be able to pay off this mortgage in less than 20 years, ideally less than 15. Things are bound to change in future but that's my plan for now.

It's an expensive time this buying a house business but I'm very frugal whilst not tight. I've saved about £1000 in the last few weeks simply by looking online for items that I want. The price difference in some things is amazing, my TV cabinet alone was £160 cheaper than where I first saw it online!

I'm currently 25 so to be mortgage free at 40 would be quite an achievement! I'm due to complete on March 27th with my first payment to be around April 10th. I'll update this thread as and when things happen.
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Replies

  • lulabelle1lulabelle1 Forumite
    2.7K Posts
    Part of the Furniture 1,000 Posts Combo Breaker
    Forumite
    Congrats on your new house and welcome to the forum!
    I would advise to subscribe to lots of diaries as might pick up some ideas and it will also help to keep you motivated/focused etc. Posting on a regular basis also helps!

    Best of luck for your MF journey!
  • Well done for doing this so early,,, please be warned it is very additive over paying on your mortgage.
    i am always looking around my house trying to find things to sell on ebay... But you won't regret starting it is the best choice i made 3 years ago..
    Any way WELCOME to this helpful thread..:j
    £176,000 January 2014
  • Just thought of somethink else how much does your new mortgage allow for overpaying.. most it is 10 % of your mortgage.
    I'm lucky i can overpay any amount i like...and i would hate to be tied down to only 10 % ..

    just a thought incase your mortgage doesn't allow any or what you want, when you know all ready that you want to overpay.. Hope that makes sense.?.
    .Any way good luck..
    £176,000 January 2014
  • Thanks for the comments, I'm excited to start!

    I'm allowed up to 10% each year which I'll not get close to touching in the first 2 years (house needs a new bathroom for a start). As times goes on and the mortgage reduces and OP's become a higher percentage of the outstanding amount I'll probably look towards an offset or lifetime tracker which usually allow unlimited OP's.
  • edited 26 February 2013 at 4:58PM
    akamustangakamustang Forumite
    59 Posts
    edited 26 February 2013 at 4:58PM
    Just to let you know my mortgage overpayments are also limited to 10%, but only during the fixed term.

    Upon reverting to the lenders SVR, so after 2 years in your case, overpayments become unlimited.

    Yours is probably going to be the same, so it could be worth investigating.
    MFiT-T3 :: Reduce mortgage to 80k (86.30%)
  • Lois_ELois_E Forumite
    2.2K Posts
    Ninth Anniversary Combo Breaker
    Forumite
    Congratulations on your house purchase - hope it all goes through OK on the 27th. Welcome to MFW :wave: Enjoy the journey! :)
    Starting again 13/4/19
    Home loan 1: £21,102.50 Home loan 2: £7,698.99
    Total owed: £28,801.49
  • bownyboybownyboy Forumite
    375 Posts
    Part of the Furniture 100 Posts
    Forumite
    Wow, I wish i was this clued up at 25! I'll hopefully be mortgage free at 45 so not too long behind you.

    Good luck, its hard to keep motivated at times (especially in the beginning) so I found it helps to have a spreadsheet showing where you would have been without the overpayment, how much you've saved in interest, how much daily interest is etc.
    early retirement wannabe
  • jimmybridjimmybrid Forumite
    125 Posts
    Part of the Furniture Combo Breaker
    Forumite
    Welcome to the property ladder and, more importantly, to MFW. Sounds like you have the makings of a pretty solid plan and I guess you have already found tips from other MFW diaries but just a couple if things I would add at this stage:
    1. Don't overcommit when it comes to OP's as in most cases you can't get it back. Make sure you have an emergency fund.
    2. You mentioned needing a new bathroom - that can be done relatively cheaply and still look good, make sure you shop around for a deal. If you end up going to somewhere like B&Q or Homebase it may be worth checking out offers on cashback websites.

    Enjoy the journey.....and keep us posted of course.
    Mortgage 1 Oct 11 - £118k @ 1.29%(BR+0.79) July 14 £118k
    Mortgage 2 Oct 11 - £17k @ 3.19%(BR+2.69) July 14 £3k (£0 after offsetting)
    Mortgage total Oct 11 - £135k July 14 £121k (£118k)
    Reg Savers (6%) - July 14 £5.1k
    ISAs - £0.6k
    Santander 123 Acc (3%) - £5k
  • gallygirlgallygirl Forumite
    17.2K Posts
    Part of the Furniture 10,000 Posts Name Dropper Mortgage-free Glee!
    Forumite
    Congratulations on your new home :j.

    I too wish I'd been as switched on at 25, reckon I was around 45 :rotfl:.
    A positive attitude may not solve all your problems, but it will annoy enough people to make it worth the effort
    :) Mortgage Balance = £0 :)
    "Do what others won't early in life so you can do what others can't later in life"
  • just echoing what everyone else has said, congratulations on your new home, well done for getting on the property ladder. Wish i had been clued up at your age too, and now wish my son and daughter ( who are just a couple of years younger than you) were clued up now!
    mortgage 1 33,000. paid nov 2012 :D. mortgage 2 87,000 due 51,686.76 at july 2013, but then:new home and remortgage ... £101065.43:eek: now 74k
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