Pay Off Before Lay Off!

Habibiboo

:wave:
I love these boards but after a significant time spent lurking and thanking on here, I've decided I need to be a little bit pro-active in my MF dream!

The thing is, my OH suspects that his days at work may be numbered in the medium term, as he's one of the oldest kids on the block in an establishment which appears to actively seek to cut loose the over 50s! We don't think he's in any immediate danger, but he's now the wrong side of 55 so we think that within the next 5 years, someone will be calling him into an office!

So, I'm thinking that we really need to put everything into paying off the mortgage ASAP, so that if he is given his "freedom" at least that's one area not to panic about (because there are bound to be others when the time comes) and I thought that signing up on the MFW boards will help me to focus on the job in hand.

A few facts about us:
* It's a second marriage for both of us (we're just under 4 years into it), so the mortgage still has 11 years to run (it was a 15 year one).
* OH still pays a significant sum towards his youngest daughter's maintenance etc, and then some, so of course that does limit what he can contribute to this household so I'm mainly trying to think of how we can make savings and bring extra in to help get MF more quickly.
* All our other children (between us) are adults now :eek: so no littl'uns to worry about.
* Mortgage currently costs £1,100 per month and is due to end October 2024.
* We do live within our means and prefer the simple things in life (like each other) :rotfl:

I'm trying to overpay a little each month, but don't know whether to target a specific extra amount to pay monthly and see what this does to bring that pay off date closer or whether I should work out a roughly when I think we should try to pay it off by and throw as much money as we can at it between now and then!

I do have plans for bringing a bit more money in to help out (all posts for the future, I think) but for the time being I'd be glad of support and ideas (particularly with working out how much difference overpayments will make to that end date), so if anyone would like to stop by with their thoughts, I'd really appreciate it!

[Deleted User]

Your post title caught my eye because we're desperately trying to pay off our mortgage as OH and my job are not secure, for various reasons.

We're also in a late relationship and had to start again with 100% mortgage late in life. We also enjoy the simple things in life, like walking the dogs, a good film and cosy evenings in.

I don't have much advice financially, as I struggle with my head popping with our own situation. So much to tackle with little income and I get stressed about the what we're trying to achieve in the next 10 years. My biggest worry is unemployment coming before we can get ourselves on a better financial footing.

However, the best thing we ever did was take on a lodger, it has literally kept the roof over our heads! We still have my son living at home but it is looking like he will leave home next year and I've more or less made my mind up to get a second lodger in. Even though this will mean having to do a tax return and pay tax on the income, it will still be worth the sacrifice. Would renting out a room be an option for you?

sleepygirl126

there are loads of ideas on here....paid surveys, cutting back ideas etc...take a look!!

good luck:beer:

Yorkielass

Hello Habibiboo, I started my mortgage free wannabee journey in August, partly inspired by the fact my dad took redundancy last year and hasn't had to find another job as my parents have been mortgage free for 10 years and therefore building up savings in that time too (my mum does still work as she's a bit younger) but my father in law was made redundant this year and had to go and find a well paid job because they still have a mortgage etc which has meant that in his late 50s he is now commuting into London for the first time.

OH and I are in our early 30s and this inspired us that if we're ever in the position in 25/30 years time we want to be mortgage free and not have the job pressures.

What we did was do a statement of affairs and worked out how much 'spare' cash we should have after bills, food, petrol etc and then decided how much of this we could afford to use to increase our monthly direct debit, using the overpayment calculator on here was a big motivator!

I then rang up my mortgage provider and asked to change my direct debit - this means we're automatically overpaying each month and as it goes out the day after payday we don't really have the money to spend in the first place.

So if you can up your dd that ensures your repaying a bit every month. Then have a read of other diaries and see what others are doing and whether it works for you.

For example 'Tilly Tidying' rounding off the odd pence in your bank account each day - I overpay about £10 a month doing that.

Doing something like the make £10 a day challenge on debt free wannabee selling stuff/doing surveys/mystery shopping etc and then add that money to the mortgage

etc etc.

We can overpay 10% so I've set myself a target for next year of just under 10% if we can keep going with our regular overpayments it'll be about £6000 to find - that's a lot and I don't know if we can do it but I decided I work better with a challenge.

Good luck I look forward to following your progress.

Habibiboo

:wave: Thanks for commenting Penny Bridge - it's amazing, sounds like we have the same life (dogs included)!

[quote=[Deleted User];63971373]

We're also in a late relationship and had to start again with 100% mortgage late in life. We also enjoy the simple things in life, like walking the dogs, a good film and cosy evenings in.

Would renting out a room be an option for you?[/QUOTE]


Great idea about getting someone else in, and already part of the cunning plan (we're thinking alike too, it seems)! My youngest son moved out and into his own place this summer, so our plan is to decorate his old (smaller) room and when OHs girls / any of my boys come, they'll use that room. This will then free up the bigger front bedroom which has two single beds in it (OHs girls and other visitors usually use this one) and we'll put some students in there during 2014. This is our compromise as OH's not keen on the idea of a lodger, but as we're in a seaside town host families for visiting students are always needed.

Another option is to have a longer-term overseas student who is studying at the local college, which is literally just minutes down the road. I did phone the college in September but didn't get a call back, so will harass them a bit once we've done that spot of decorating!

:wave: Sleepygirl126 & YorkieLass ~ you're both right, there are lots of good ideas! I've done lots of browsing and settled on a few challenges to help with overpayments (all in the signature). Trouble is surveys don't work for us as most of them boot me out once I click the box to say we don't have / watch TV, so I'm trying the £10 a day challenge with a good old declutter in the direction of Ebay as the main method at the moment! Yorkie, it sounds like your parents are a great inspiration!

I do keep seeing the Tilly Tidying mentioned, so I'll have a look into that too! Trouble is, our mortgage account is with RBS and my account I use for work payments is Nat West, so success with tidying from one to the other will be dependent on whether the electronic highway between them is actually working :mad:

Thank you all so much for taking time to comment, I've got to get back to work now but will pop back later to report today's MFW actions! :wave:

elantan

You know I started reading your diary last night and thought ohhh this person is coming at this in a similar way to ourselves. ... Then as usual time took over and I didn't get to read the rest,

Hello

Looking forward to following your journey, Remember to use the tent a room scheme if your going to rent a room ... And yep those Tilly tidies all mount up

Habibiboo

:wave:

Hi Elanatan ... yes, renting some space does seem to be the way to go, although short-term students are slightly different, these were never classes as taxable income previously when I used to have them (although of course anything's possible with this government now)!

So, a few figures and today's MFW action:

* Mortgage is with RBS. It was originally a Virgin One account, so it's a current account where the mortgage acts as a huge overdraft :eek:
* Current mortgage facility of £117,750 with 11 years still to run at 4% interest (current rate) and MF date of October 2024.

We've been working hard at overpaying and have managed to bring it down to under £113,000 since the summer (little windfall from insurance policy went straight in there to help things along).

Today's action:
Phoned RBS and asked for our facility to be reduced to £112,500 - this effectively caps that overdraft limit. It was due to reduce to £109,250 in Oct 2014, so effectively we're already £3,250 and 10 months ahead of that little milestone. I double-checked that there's no cost involved in overpaying like this: you only have to pay if you want to increase it ... hmm, that's OK then!
Re-organised my personal current account which my pay goes into and sent extra payment of another £200 for December across ~ an act of "extreme" Tilly Tidying, I think (largely this was some savings towards Christmas that I've decided to put to better use)!

So, now off to play with the mortgage calculator for a bit to see if I can work out how much earlier today's efforts bring our pay-off date forwards to as I'm not sure how to do this! Will then sort out MF info in signature!

Today's grey cloud: ASDA completely messed up my home delivery slot today and expected me to wait in all day tomorrow as well, because the driver only delivered part of my order and didn't come back with the rest even though he told me and the store that he would (have to say I feel sorry for him though because he seemed a nice man and was clearly overstretched even though it's not official "Christmas delivery" time yet.)
Today's silver lining: ASDA refunded the missing items (which were mostly their substitutions anyway) and gave me a £6.50 voucher towards my next shop!
Today's happy thought: My youngest son popped by to tell me he's coming home for his Christmas dinner!

:wave: Hope everyone else has had a good day

MallyGirl

Hi there
we also have a One Account mortgage. I would say that you don't get the best out of it if you maintain other current accounts unless they are paying you 4% net interest on the balance. I do understand that some people like to keep separate accounts though - its a matter of personal choice. Keeping all your money in the OneAccount until the last possible moment by use of credit cards (either pay in full at month end or stooze on 0%) would whittle away at the balance as much as possible. The interest rate will also drop to 3.9% if you can get your facility below 50% of the house value - sadly it goes no lower than that.
Good luck on your MFW journey

Habibiboo

MallyGirl wrote: »

Hi there
The interest rate will also drop to 3.9% if you can get your facility below 50% of the house value - sadly it goes no lower than that.
Good luck on your MFW journey

:wave:
Thanks for stopping by MallyGirl and for that very interesting info!

I kind of have to keep a separate account for my own finances as I work freelance and need to keep some of those finances separate from the home one (some clients pay by electronic methods and I don't really want to share the account number / sort code in that way). However, I can see the wisdom in what you're saying and I certainly try to throw everything else I can into there!

We don't have a credit card (well, only for credit rating purposes - it's actually hidden in the depths of the house somewhere)!

I'm very grateful for your above comment particularly though because current mortgage owing is just under £112,500 and house is worth £215,000+ so that's even more incentive for me to bring the balance down as much as possible for the coming year ... thanks for the tip!

Funny though, I had a whole conversation with RBS yesterday about bringing the mortgage down and they didn't mention it ... they don't go out of their way to be helpful really do they?

Habibiboo

:wave:
So, today's action (well, late last night actually) was to organise a spreadsheet for proposed overpayments and work out what this does to the payback date.

As far as my calculations go, it seems that if we can overpay by approximately £200 per month, we'll knock 2 years off the mortgage, which takes us from November 2024 to November 2022.

So, immediate goal is to aim for OP of £200 (min) per month, then review April time. For the year, I've rounded up that minimum figure to make a nice round overall goal of OP by £3,000 in 2014 ... so let's see shall we?

Today's grey cloud: At the risk of being nauseatingly positive, it's all been good today, the only grey clouds have been those menacing ones outside!

Today's silver lining: I was given two presents from a client - early Xmas gift and a lovely scarf from her travels to India, very kind and lovely surprise (I like a nice surprise, me)!

Today's happy thought: The whole process this week of thinking / starting MF diary and organising spreadsheet so that we know where we're "going" (or at least trying to go) is being very motivating and empowering - and I appreciate all the help and good wishes I've received here to get me going properly, many thanks.

I hope everyone North of here is doing OK with these horrible storms, warm hugs to those who need them.

Habibiboo

:wave:

OH had day off today so I took half day and we tried to get some of the Xmas shopping out of the way! It was good to have the chance to talk a bit so today's action was a whole conversation with OH with what the plan is and where it leads us.

He's a bit funny when it comes to the finances and said he's grateful that I've taken on the job of getting it sorted. To tell the truth he's been a lot more worried about it all than he's been letting on. Apparently one of his colleagues, who's about the same age as him is also starting his "alternative" preparations by signing up for the lengthy process to foster children, as this is he and his wife's Plan B just in case, so it seems the vibe is pretty strong for their age group

We've agreed to try & hit a £200+ extra overpayment from Jan to April then aim for £500+ once we can start getting students in from Easter onwards - all of which should take us beyond my tentative OP goal for 2014. In theory it's all fine, but of course in practice there's no knowing what's around the corner!

Today's black cloud: Literal horrible black clouds causing problems for people around the country.

Today's silver lining: Christmas shopping well underway.

Today's happy thought: Christmas tree going up tomorrow! Need to find the Christmas CDs though, did that thing of putting them all together somewhere safe when I sorted out a big dresser that had them all in and now ... nowhere to be found!

Today's embarrassing moment (this will crop up [STRIKE]regularly [/STRIKE]periodically): Was being absent minded and distracted during a spot of Xmas shopping earlier and took the arm of someone else's husband whilst looking at and commenting on the the value of certain shop items and whether to shop around a bit more! Excellent focus on MSE - related front, but no focus whatsoever on what my hands were doing - not ideal from the perspective of the man's wife or my husband, whose hand it turned out I wasn't holding - apparently he was watching me from a few feet away and said he could just see what was going to happen! Thankfully everyone else found it amusing!

Oh well, at least it's the weekend!

Hugs to those who need them :wave: