Being Weird: Lomcevak's long MFW journey

Lomcevak

Debt is normal. Be weird.

I'm not a Dave Ramsey fan, but i've always liked that quote. Over the last few years Mrs. L and I have been climbing the mountain of sorting out our finances, and a year or two ago reached the point where non-mortgage debts were all paid off, emergency funds were being built up, and the next great target started to become the mortgage. As a MFW since then it's finally time for a diary

Unfortunately, it's a rather large mortgage to deal with. With two growing children our tiny two-up, two-down - purchased just pre-boom in 1997 for £59k! - was becoming far too tiny, and we all moved to a modest house in a stunningly beautiful village by the sea in 2006, gathering together every mortgaged penny we could get to do it, and ending up with a £229k, 25-year repayment mortgage at 4.99% fixed for ten years. Hindsight showed that to be a poor choice of fixed rate, especially given the huge early-repayment fees attached to it, but at the time interest rates looked to be going up, not down (our first mortgage in 1997 was at 7.79% and that seemed reasonable at the time) and I console myself with the fact that given what I knew then, i'd make the same decision. Mortgaged to the hilt, we just couldn't cope with serious rate rises back then...

Fast forward seven years. Two kids became three, and by the summer of 2013 the mortgage was down to £181k, helped a little by £8k of OPs we'd intermittently scraped together from time to time when funds allowed. The 4.99% rate still grated, so with three years to go I did the sums, factored in early repayment, and moved the mortgage to a 5-year fixed at 2.6%, chopping three years off the term to 15 years in the process. MFW success number one

Sadly those horrible early repayment fees bumped the mortgage from £181k to £188k, although at least I paid all the arrangement fees up front. We'd still end up significantly ahead after three years though, and with unlimited repayments, low interest rates, and a MFW dream ... here we go :A

Since the remortgage a few months ago i've OP'd just over £3k, bringing us to £182k, almost back where we started before the remortgage. The target is now to get down to zero within ten years rather than the scheduled fifteen; eight years earlier than our original 25-year term and just before we both turn 50. Wish us luck

muddywhitechicken

Good luck!

Lomcevak

Thanks

My plan is to OP by at least £565.21 a month for the remaining 56 months of the current deal - a rather specific number to pick, but the amount needed to reduce the current mortgage to £99,999.99 at the end of its scheduled five years. By strange coincidence this also means that our monthly mortgage repayments and overpayments are exactly the same total amount each month as they were for our old 4.99% mortgage

We'll continue to fully fund our Cash ISAs along the way, so when the current deal ends we'll be in a position to switch to an offset with the mortgage balance (almost) fully matched. Any extra savings or OPs along the way will just be a bit of a bonus to bring it all closer

That's the plan, anyway. Wonder how it will all turn out?

Tilly_MFW_in_6_YRS

Good luck with your plans. Having a diary is a real help and it sounds like you've got yourselves organised financially.

It's such a boost to see the mortgage drop

Best wishes Tilly

EchoDelta

Good luck!

I love that Dave Ramsey quotation

Lomcevak

A modest overpayment of £315 to start off the month, might manage a small 'TT' too once I close out October's budget in the next few days.

One of the things I struggle with is the feeling that the mortgage is so big that overpayments make no real difference at all. To counteract this i'm looking out for shorter-term milestones; this November the monthly interest drops below £400 for the first time and we drop below 60% LTV, and then there are two more for December:

- the mortgage dips down under £180k for the first time
- we pass £50k paid off since moving house

Struggling to come up with anything more exciting than the £175k mark in March/April time to follow that, but will think of something



edit: ah, and just noticed that the mortgage is just below the level we were at when we remortgaged earlier this year. It's a bit depressing in a way to think that the last five months have really just been paying off early redemption fees, but that's now done and dusted and onwards and downwards with half the monthly interest we were paying at the start of the year

Alchemilla

Not a fan of Mr Ramseys politics but like his attitudes to "most else".
Good luck. Be weird. Normal is broke.

Lomcevak

Lovely couple of weeks off work, the first time i've really managed to escape the place since last Christmas; it's all really been a bit of a tempest this year trying to drag a struggling project to fruition. Very good from a financial point of view, less so from any sort of work/life balance. Mrs. L also managed to escape for a couple of days, so time for some long walks through the downland around here, which looks stunning at the moment - lovely mix of golden beech leaves and ancient yew trees in the autumn sunshine. Sadly she's back to work today and i've still got a week to go, so will try and find something to keep me busy round the house

Not much to report on the MF front. Standard OPs this month, and the interest has ticked down under £400 a month for a minor milestone. Counting down to the 1st December and a final OP to complete this years '2013 MFW' target of £6k and hit the £180k mark.

Not remotely ready to think Christmas, let alone 2014

Lomcevak

Well the 2013MFW is complete, with £6250 OP'd during the year, and MFiT-T3 results are in. I'm now past that £180k barrier; it feels like a good step forward, as i've bumped against it twice this year, hitting £181k in June before remortgaging took me back to £188k in July (feels like a strange game of snakes'n'ladders ). Still a long way to go, but doesn't feel that long since I was despairing about ever getting under £200k.

Oddly FD reckon i'm about £900 further ahead with my mortgage than my spreadsheet does. About £250 of that will be due to the difference in how i'm adding interest (a month at a time, whereas FD will have only added a third of December's interest as they're more accurate than I am) but no idea what the other £650 or so difference is. Not complaining but will have to wait on the first statement to get my spreadsheet to balance.

My other spreadsheet obsession has also started, with 16 weeks to go until the Brighton marathon. Had a great time doing it last year, so thought i'd do it again in support of Macmillan in 2014. Mrs. L tells me taking up marathon running is my mid-life crisis as i'm 40 next year - just a few days after the marathon - but, hey, at least it's a cheap crisis, doesn't cost much more than shoes and pasta.

Lomcevak

Oddly FD reckon i'm about £900 further ahead with my mortgage than my spreadsheet does. About £250 of that will be due to the difference in how i'm adding interest (a month at a time, whereas FD will have only added a third of December's interest as they're more accurate than I am) but no idea what the other £650 or so difference is. Not complaining but will have to wait on the first statement to get my spreadsheet to balance.

Well the statement has turned up, and sadly the £900 is something of an illusion - our payment goes out on the 10th but it seems to be a few days before they add interest (about £400) and then it is for the previous month, so when I called up the number they quoted was effectively missing two months interest. So my spreadsheet is right

On the plus side, after my mother demanded we do Boxing day lunch for 18 (as it was 'unreasonable' for her to do it - we're doing Christmas eve and Christmas day too :mad: ) but feeling smug as thanks to a well-timed shop at RFQS-time we've managed to cover three courses and wine for £1.40

- loads of red peppers and tomatoes (8 bags reduced to 5p each!) plus herbs from garden. Will make roasted red pepper soup and make some croutons with leftovers from the breadmaker

- large, large gammon (50p!) plus three bags of spuds and two bags of sprouts (10p each!). Slow roast gammon with honey and mustard, yum

- we have lots of apples put aside from a month or two ago, nice neighbours had too many and let us pick loads, so can do a crumble and/or apple tart.

There's also lots of wine hidden under the stairs from when it was glitching at Tsco for under £2 a bottle and paid for by doubling-up clubcard points. 'Only' their own-brand finest which the wine-snob family won't like, but we'll put it in decanters and say it is something else, nobody will notice

Father then came round and tried to give me £50 as a contribution which was nice, I was tempted to just OP it but will slip it back to him at some point.