Wanting to be a MFW

Didn't think I'd ever be posting on this board!

However, I've now paid off the debt and I've just been sent an offer to change my mortgage and have had it fixed for three years.

My credit rating wasn't great, but I've got 5.44% for 3 years. The only downside is that there are no overpayments accepted as part of the mortgage.

So, I guess my first question is - where do I start?

I'm already doing all the MSE stuff, but now need to focus my attentions on my mortgage to see if I can chop a few years off.

What would be the advise for me as Ican't make overpayments? Just save bits and pieces here and there wherever I can and put it away in a mortgage pig?
:D"Stay Wonky":D

:j:jBecome Mrs Pepe 9 October 2012 :j:j

Replies

  • Hi Keren,

    Congrats on being debt free. I think you are right that you just need to be squirreling away money until such time as you can overpay - perhaps when your fixed rate is up. Make sure you are getting the best return on your money in the meantime - probably by using a cash ISA, e.g. Egg are offering 6.05%.

    Best wishes
    Sparkly
  • waterbabywaterbaby Forumite
    500 Posts
    Part of the Furniture Combo Breaker
    I'm in a similar position to you - although I can make overpayments, I've overpaid the max til September so can't pay any more in right now.

    I agree with sparkly, whatever you could be putting into the mortgage, put it aside until you can whack it all in in one big lump sum at the end of the three years.

    Are you quite disciplined, or might you dip into it? It's good to have access in an emergency but not on impulse while out shopping!
  • David_B_2David_B_2 Forumite
    718 Posts
    I'd agree with the above. Many congrats on first dealing with and beating your debts and secondly for now tackling the biggest debt of all.

    If you have not done so already I'd start using your ISA (tax free) allowance first and then any other high interest accounts. Danger of this is that if your not used to having built up savings then it can be hard to leave it untouched or spend it all on a lump sum when your ready to over pay. Saying that having a duffer for emergency savings is always a good idea before you start.

    Use some of the calculations to see what can happen if you make a lump sum over payment and interest/years saved, hopefully this should keep you going on the right track. Plus take interest in your savings and monitor how much interest you have made and what effect this will have on your mortgage when your ready to make a lump sum.

    I try and think of a nice item or treat that I could buy with all the interest I will save once finished.

    I wish you well and well come aboard.
    Regards,
    Dave

    If only I had a pound for every time I used the thanks button :D
  • Burlesque_BabeBurlesque_Babe Forumite
    17.5K Posts
    Part of the Furniture Combo Breaker
    Cheers for the advice. I've filled an ISA for this year with NS+I (did that yesterday) and I have quite a bit I can squirrel away. i'm going to put it in a high interest savings account and then move it month by month into a high earning regular savings account each month.

    I had a look at the calculator and £100 a month overpayment will knock nearly 6 years off.

    I'm just about to change mortgage and although it says they don't accept overpayments, I did see somewhere else that they sometimes to (without penalty) on an individual case, so I might give them a ring when it is all done and dusted. If not i'll wait until I can change in three years and use what I have to knock off.

    I've never been a saver - I've always been a spender, but those days are well and truly behind me now and I'd love to pay off the mortgage early.
    :D"Stay Wonky":D

    :j:jBecome Mrs Pepe 9 October 2012 :j:j
  • keren29 wrote: »
    Cheers for the advice. I've filled an ISA for this year with NS+I (did that yesterday) and I have quite a bit I can squirrel away.

    D'oh - I actually meant NS & I ....andthat's who I went with myself!

    Well done!
    Sparkly
  • Kaz2904Kaz2904 Forumite
    5.8K Posts
    Mortgage-free Glee!
    How about you give yourself a three year target and join us on the MFIT challenge? We won't all be MFIT but we're all aiming at a goal and logging in monthly is keeping us on track. Just pm DD if you decide to join with your current mortgage and your 3 year goal.
    GOOD LUCK!
    Debt: 16/04/2007:TOTAL DEBT [strike]£92727.75[/strike] £49395.47:eek: :eek: :eek: £43332.28 repaid 100.77% of £43000 target.
    MFiT T2: Debt [STRIKE]£52856.59[/STRIKE] £6316.14 £46540.45 repaid 101.17% of £46000 target.
    2013 Target: completely clear my [STRIKE]£6316.14[/STRIKE] £0 mortgage debt. £6316.14 100% repaid.
  • jamesdjamesd Forumite
    25.8K Posts
    Part of the Furniture 10,000 Posts Name Dropper
    That's a good start. Remember the stocks and shares ISA as well, since over the long term that's expected to do better than either saving or overpaying.
  • ailuro2ailuro2 Forumite
    7.5K Posts
    Part of the Furniture Combo Breaker
    If you are sure you can afford it get the mortgage over less years- it has the same effect as overpaying and costs the same overall, but no overpayments required. You are tied to the overpayment though, so perhaps go somewhere in the middle of the two and save some, reduce the term by a couple of years?
    Member of the first Mortgage Free in 3 challenge, no.19
    Balance 19th April '07 = minus £27,640
    Balance 1st November '09 = mortgage paid off with £1903 left over. Title deeds are now ours.
  • Burlesque_BabeBurlesque_Babe Forumite
    17.5K Posts
    Part of the Furniture Combo Breaker
    Cheers all. I change mortgage in a couple of days.

    My savings will be at a higher rate than my mortgage interest rate so I'm going to use that at the end of the 3 years.

    i've reduced the term this time by 3 years. I could probably have chopped another year or so off but I don't want to over stretch myself.

    i'm going to have a look at the MFIT.
    :D"Stay Wonky":D

    :j:jBecome Mrs Pepe 9 October 2012 :j:j
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