Back from the brink of disaster....now to pay off £160,400 interest only mortgage :-(

Tilly_MFW_in_6_YRS

Hi Kate, well done on the 1p payment - every penny counts :T
I'll be back with the cinema link ASAP.

https://forums.moneysavingexpert.com/discussion/4071029
Tickets


https://forums.moneysavingexpert.com/discussion/3766197
Discussion


Here we go

Tilly x

Cheapskate_Kate

thriftyscotslass wrote: »

What an inspirational story Kate :T.

I too hope that an expert will be along soon with a suggestion for you, sorry I can't help.

As has been said, don't be too hard on yourself over past history. We too were given a mortgage that we never should have been, we were given a 35-year repayment mortgage that we could not afford. For years, we wished we had rented but we fought on and eventually brought the beast under control.

Can so relate to many parts of your story, hubby and I both had degrees and dontcha know it, those well-paying jobs never-materialised . It took me many years to love our 60's 3-bed terrace house, I was so gonna live the life in a House Beautiful fully renovated detached property .

It helped me to learn about consumerism, this link shows how we have been "moulded" into consumers - so don't give yourself a hard-time, we are the lucky ones, we can now see through the lures of the advertisers.

In the words of Mythbusters (our Netflix programme of the moment)... I reject your (consumerist) reality and substitute my own :rotfl:

Chin up, lovely lady.

wow I've just read that link and bookmarked it for when i'm feeling sorry for myself. When my ex and I bought this it was only a 'stop gap' before we had the 4 bed detached with double garage. Oh how deluded we were. Sometimes I feel really guilty that my children will probably always have to share a bedroom...the boys is a box room as well so they have small bunks and a wardrobe - that's it! They won't grow up in the type of house I did but then house prices were more inline with salaries when my parents bought. So I guess I have to like or lump my 1930s semi even though its 'falling down' in places and needs decorating.

Still, when i feel really bad I think that I actually have a plot that's biggger as what the 5 bed new builds up the road are on and its warm and cosy although rather too messy for my liking.

I have learnt to appreciate what I have though. My sister lives in a lovely large detached house that's immaculately decorated. However she's had several mcs and lost a baby at term 5 years ago and hasn't been able to conceive since...despite several rounds of ivf. It is absolutely heartbreaking and I know she'd swop places with dysfunctional me in a heartbeat. I am truly lucky.

Cheapskate_Kate

I phoned NRAM for the 3rd time in 24 hrs. First of all they couldn't find my account - 'am I sure I owe them 160k because computer says no'. Finally they did (would say phew but for a moment I was hoping there'd been some monumental miracle and it had just disappeared).

It seems I can overpay as much as i want without penalty and this sits in a 'reserve' so i can borrow back if necessary. Although that is subject to an affordability check but not a credit check. Hmmmmm not sure about that.

So I've decided to hedge my bets and start by saving 3k in an ISA and have opened a new one today. I'll add the existing £600 to that and then pay in what would have been the DMP payment plus any surplus until I hit 3k. I'll leave £1700 in the old isa until i need to pay balance on hols and withdraw the rest for spends so won't include that on any SOA.

Then I'll start overpaying the mortgage. I've set a goal of paying off 12,000 in 24 mths which will bring me down to the 148K mark. That means I need to pay £500 a month. If I have any extra than that I'll add it to the ISA. I'll also do what gallygirl suggests and think of 'net worth' so that will mean taking away the ISA money from the balance of the mortgage.

Really excited now and can't wait for payday so I can pay off last creditor, finish my DMP and get cracking.

MrsP1983

Kate this is a great diary-really inspirational. I have a feeling you're going to make inroads into your mortgage quicker than you think possible! Have subscribed

DippityDooDah

Hi Kate,

I just wanted to say you have a great attitude, and I am sure you will get through this. You should not worry about your children having to share a bedroom or not having as big a house as you would have liked as they have such a good role model and are obviously much loved - what more does a child actually NEED than a safe and happy home life - too many people give the appearance of having a wonderful life with big house and lots of bedrooms, holidays, stuff, but under the surface are pedalling like mad just to stand still.

I am not sure if this would help but I have read on the MSE website about credit cards you can apply for that help to rebuild your credit history, is this something you would consider, so that at some point in the future it would assist you in changing your mortgage onto a better rate? Just a thought.

I have subscribed to your diary and will read with interest your journey,

take care

DDD
x

Cheapskate_Kate

Thanks DDD - I have been looking at the credit rebuilding cards and when I've finished my DMp and the dust has settled I think I'll apply for one. I do have to pay for some expenses with work such as stationary which I claim back so would make sense to use the card for this sort of thing and have a DD set up to pay the balance each month. Hopefully 18mths of doing that might help my credit record along a bit. At the moment I think I have 3 defaults showing - but have all greens for the mortgage payment and my mobile phone.

Had a bit of a revelation last night and decided that the best answer to my mortgage is to earn more money. I find this much easier than cutting back any further as I do want to have some sort of life and do want the children's memories to be positive when they look back. I was thinking about what I remember most as a child and it certainly wasn't having 'things'(although I did have alot!). I have few memories of toys/ games or clothes, gadgets etc but lots of memories of theatre trips, holidays, visiting places and 'doing' things like bike rides, playing rounders at the park, family bar b ques, etc. With that in mind I'm going to focus what money I have towards 'experiences' rather than 'stuff' and hopefully my children will also have fond memories of things we did together.

Anyhow - I've diverted. So, was thinking about starting self-employment again like I used to. With my current job the work is in peaks and troughs so will have time some months to do this....and at other times - well there's always evenings and weekends! With that in mind I've re-registered for the mystery shopping sites, registered to do some freelance article writing and applied again to Lionbridge. I've already had a response from LB - they pay in euros but it's the equivalent of £9 per hr so just need to learn the new tasks and hopefully pass the exam. If I managed 10hrs a week with LB, then after tax that'd be an extra £72 a week - that's HUGE!

I'm going to hold fire on registering as self-employed until I see whether I've passed the LB exam as that'll be the bulk earner. Really exciting!

megela

Hi Kate,

We have exactly the same attitude towards memories and 'stuff' for the kids. Like you I think when they look back they will remember the great holidays and days out we have far more than whether they had a pile of 'plastic tat'. We even gave them a surprise trip to Eurodisney one christmas, leaving 2 days later. We bought Merlin passes with money given to us by our familes last christmas. We all discussed it and agreed we'd rather have fun and make memories, than spend it on something we didn't really need.

Good luck with your MFW journey - I think you're pretty inspirational.

Megela.

Cheapskate_Kate

Thanks Megela......I finally convinced my MIL to buy us a family pass for National Trust for xmas instead of her usual tat (oops I know that sounds rude and ungrateful). There's loads of places within an hr of us to explore. We've probably already got back the initial cost and with the weather finally (touch wood) warming up I'm hoping we'll get alot more trips.

Cheapskate_Kate

So the post brought good news and bad.

Good - application form for ISA is here. So that's done and ready to be posted.

Bad - tax credits. Am no longer entitled and so payments have stopped. Oh well, was good while it lasted if they weren't ballsing things up. With limited childcare costs and increased income I thought it may be coming. Were down to £40 every 4 weeks anyway so not a 'huge' loss in the grand scheme. Hopefully my LB plan will make up for it. And at least I dont have to worry about the dreaded overpayment screwing me over.

SalsaDanca

Hi Kate,

I see that quite a few other people have already complimented you on your attitude and your very readable posting style, so instead I'll compliment you on joining MSE in 2013 and finding a decent username. There can't be many left!

As you've just started tackling the interest-only mortgage, have you considered working out how much interest you pay every day? Some people find this a good way of breaking down a large mortgage into manageable targets.

If your mortgage is about £160,000 and the interest rate is 4.54%, you are paying just under £20 per day in interest, which might come as a shock. However, an overpayment of £80.40 will save you 1p interest per day every day for the next 16 years. £80.40 is a small enough amount that you could aim to make several £80.40 overpayments per month, which would soon have a small but noticeable effect on your monthly interest payment.