Mowie's attempt at being mortgage free

Hi

I've been trying to grab 5 mins here and there to read some of the diaries, you really are an inspirational lot!

A little about me: I'm married with one child. My husband and I both work full time and we pay for child care 4 days a week. I don't currently have my name on a mortgage although my husband does. My husband purchased our home in 2005, we got together in 2006 and decided when we got married in 2008 that I'd be added to the mortgage. We never did add me as we decided to save money on doing it and just wait until we moved to a larger property. Time flew by and life changed dramatically in many ways including the birth of our son, and the unexpected sad loss of both my in laws.

This brings me to the last couple of years. The sale of my in laws property has left us in a comfortable position financially and we have planned to put much of the money into purchasing a larger property. We are currently in a two bed end terrace and in the midst of buying a 4 bed detached. There are things that we would like to do to the new house before moving in and have decided to keep our current home whilst we do the work and then move in. It's slightly daunting as it means we are going to have two mortgages for a time.

We are taking out a £90,000 mortgage over 17 years which is pretty much identical to the current remaining mortgage and term. We have never over paid on the current mortgage, why I don't know! I think we have been the type of people who just take it as read that you pay this much on your mortgage and it ends when the bank says.

I'm a bit loathed to start over paying on the current mortgage due to the sale in the coming months and would much rather make the payments on the new mortgage. Any opinions on that?

My plans to make regular overpayments will include rounding up the mortgage payment on the new mortgage to the nearest £100 once we've sold our 2 bed. I'm going to try saving £2 coins although I rarely get them. Clearing out the change in my purse frequently. Raiding husbands change pot. Any windfalls along the way or eBay sales could also be used. I'm thinking that even a little goes a long way. We are going to need to be a little cautious in the early days whilst getting used to the new costs associated with a larger property but all this means is that I should be able to step it up once we know where we are with bills etc.

A saving I should be able to make from Sept 2014 (a while away yet) is when my son starts school, I can put the childcare cost towards over paying.

Mowie
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Replies

  • sweetdaisysweetdaisy Forumite
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    Hi Mowie. Just wanted to pop in and wish you well on your MFW journey.

    I am counting down to the days (September 2014!) that we no longer have to pay nursery fees for DS2 as he will be starting school full-time, however will then have to pay for school dinners and after school club for him as well as DS1. It's like having another mortgage :eek:.
  • MowieMowie Forumite
    28 Posts
    Thank you sweetdaisy. I've raided my purse, husband's money pot and sitting at over £20 to put onto new mortgage when it starts. I've set up a standing order to put extra away for once it starts. I know I've not got the mortgage yet but figured I could put it aside instead.
  • newgirlynewgirly Forumite
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    Hi mowie, best of luck with the new diary :)
    2022 MFW 67 - 33 month challenge to clear mortgage, month 3 completed and on track 🙂MFI3 No.12
  • MowieMowie Forumite
    28 Posts
    We might be a step closer to moving, tomorrow we are off to the solicitor to sign documents! No mention that this is actually our exchange but I'm thinking it probably will be. Exciting stuff! We're just past week 9 of our buying journey. We are the end of the chain (will sell this place soon) and there are only 2 properties involved, one of them a probate and I believe this was granted before it went to sale.
  • sweetdaisysweetdaisy Forumite
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    Mowie wrote: »
    We might be a step closer to moving, tomorrow we are off to the solicitor to sign documents! No mention that this is actually our exchange but I'm thinking it probably will be. Exciting stuff! We're just past week 9 of our buying journey. We are the end of the chain (will sell this place soon) and there are only 2 properties involved, one of them a probate and I believe this was granted before it went to sale.

    Wow, things are moving fast for you. Sounds very exciting, hope all goes well tomorrow :).
  • MowieMowie Forumite
    28 Posts
    Thanks sweetdaisy. It seems to have taken forever tbh. We signed everything yesterday, transferred payment, exchanged contracts today an we will complete on 11th July. Exciting times :T
  • kirstyparkkirstypark Forumite
    771 Posts
    hi, good luck, we are moving on the 29th july, very jealous you are managing quicker, just want to go now! Does your new house need much? i keep looking at websites thinking "want that" but then look at our huge balance and just want to get it down as quick as we can.
    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
  • abouttimetooabouttimetoo Forumite
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    Mowie wrote: »
    We are taking out a £90,000 mortgage over 17 years which is pretty much identical to the current remaining mortgage and term. We have never over paid on the current mortgage, why I don't know! I think we have been the type of people who just take it as read that you pay this much on your mortgage and it ends when the bank says.

    I'm a bit loathed to start over paying on the current mortgage due to the sale in the coming months and would much rather make the payments on the new mortgage. Any opinions on that?
    Mowie

    Welcome to the board Mowie :hello:

    When you say the new mortgage is pretty much like the current mortgage could you be more precise please e.g. what are the outstanding figures, the term and the interest rates

    That information will help people understand a bit more about which mortgage it may be more beneficial to overpay on


    Random other thoughts are
    • have you had it confirmed whether your new mortgage will allow overpayments and if so, are there any restrictions?
    • what do you plan to do with your current home once you've moved into the new one? if you plan to keep it and change it to BTL this could also influence your decision as it may we wiser tax wise to keep that mortgage as high as you can
    Good luck with your plans, you'll get plenty of support and advice on here and a sounding board if that is what you need

    Regards
    ATT
    MFW Start Date 1.4.08. Updated 23.1.18. MFW date 1.8.18
    Original Mortgage o/s £187,643 / £71,904 (-115,739)
    Repay o/s £92,661 / now £55,900 (-36,761)
    Int Only o/s £94,982, now £16,004 (-78,978)
    Total daily interest £1 [a) £0.77 b)£0.23
    Total OP's:2018 target £TBC YTD £1,995
  • MowieMowie Forumite
    28 Posts
    kirstypark wrote: »
    hi, good luck, we are moving on the 29th july, very jealous you are managing quicker, just want to go now! Does your new house need much? i keep looking at websites thinking "want that" but then look at our huge balance and just want to get it down as quick as we can.

    It's perfectly liveable and has been kept in very good condition but just needs updating, kitchen and bathrooms. We're going to do some basic decorating and then move in. We are looking to change the kitchen next year after living in the space and deciding what works best or us in terms of design/layout. It'll be the bathrooms to tackle after that.
  • MowieMowie Forumite
    28 Posts
    Welcome to the board Mowie :hello:

    When you say the new mortgage is pretty much like the current mortgage could you be more precise please e.g. what are the outstanding figures, the term and the interest rates

    That information will help people understand a bit more about which mortgage it may be more beneficial to overpay on


    Random other thoughts are
    • have you had it confirmed whether your new mortgage will allow overpayments and if so, are there any restrictions?
    • what do you plan to do with your current home once you've moved into the new one? if you plan to keep it and change it to BTL this could also influence your decision as it may we wiser tax wise to keep that mortgage as high as you can
    Good luck with your plans, you'll get plenty of support and advice on here and a sounding board if that is what you need

    Regards
    ATT

    We are putting our current property on the market, without dragging out the paperwork I think there was about £90,300 with 17 years 3 months remaining on Homebuyer rate (3.99%). It will now have reduced slightly. The property should sell around £130k and if we price it right it should go quickly. Our neighbours went up for sale in the last fortnight, advertised on the Friday, sold on the following Wednesday.

    Our new mortgage will be £90,000 over 17 years, 3 years fixed 3.19% and then onto Homebuyers. I was classed as a first time buyer and they paid the stamp duty too. We are able to overpay by 10% a year. What need to find out is how the interest is calculated eg daily as this will effect how I overpay.

    What I will say is that I am keen to overpay but I don't want it to be what every aspect if my life revolves around. If I can only knock 6 months off the term then so be it but if I get hooked and 6 years is knocked off then even better!
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