I've Done It!! I'm Finally Mortgage-free

barnishroader

Martinslovechild wrote: »

Insert By Martin

First of all let me state for the record. Martinslovechild is no relation of mine; and I suspect he's older than me anyway! . Yet his story below is inspirational and worth all MoneySavers having a read of.
_____________________________________________


Hiya,

I've written this same explanation on the new 'MFW Roll Of Honour' thread (thanks Dithering Dad!).

For sake of ease, I've copied my response here also...

I decided to become a MFW in May 2001, at which point my mortgage was £129,000.

I remember thinking how much of an achievement it would be to become mortgage-free before I hit the big '40'. In 2001, my mortgage had been running for 8 years and would have 17 further years left to run.

I telephoned the bank and asked for the monthly cost of reducing the outstanding mortgage term by 1 year, 2 years, 3 years, 5 years, 7 years & 10 years respectively. I can't remember the actual figures quoted but I do remember that reducing the mortgage by 10 years cost an extra £435 per month; this was the option we decided to go for based on a budget I'd done, which determined that we could afford regular overpayments of about £500. This immediately reduced the term to 7 years, which was very good news!!

I was tied into a mortgage deal at the time which didn't allow overpayments (but bizarrely allowed me to reduce the term thereby having the same effect). There were of course penalties for making any overpayments during the discount term which would last until February 2003.

In February 2003, I immediately applied for a more flexible mortgage with a different lender which would allow overpayments, underpayments & drawdowns. Again, during the initial period (through to October 2004), I was restricted to making overpayments which were no more than 10% of the outstanding mortgage per annum.

Around mid-2003, I discovered 'stoozing'; as I would discover, this was to play a very big part in my clearing the mortgage. In 2003, I applied for my first 0% card and discovered just how easy it was to move the borrowed money into my current account, from where I used it to first clear my wife's car loan (remember, I couldn't overpay the mortgage by more than 10% at this time). Once my wife's car loan was fully on 0% (this took 3 credit cards in both mine & my wife's names), I applied for further 0% cards to clear my own car loan. I then ensured that I paid the full 10% mortgage overpayment by borrowing even more cash, all of it at 0%.

In fact, once the cars were on 0% and I'd repaid the 10% on the mortgage, I decided to keep going - I maxed out on an increasing number of 0% cards. During 2004, I continued to borrow on 0% cards. In fact, when the 10% overpayment restriction eventually expired on the 1st November 2004, I immediately overpaid an amount totalling £51,500 into my mortgage overpayment fund!! At this point, my outstanding mortgage balance fell to just £6,500 - in other words, I was paying just £58 per month in mortgage interest, compared to the £326 that I should have been paying!! I was saving £268 a month in interest and an extra £3216 was being paid off my mortgage each year as a result of 0% cards!!

I eventually accrued a stoozing pot of over £100,000. This was in addition to my wife's pot of £37,000. This was quite staggering as my earnings are nothing like this amount. Since the stooz pot hit this amount, it got progressively more difficult to maintain this level, so it was fortunate that as time went on and I was unable to replace some credit cards with fee-free 0% cards, I was in the lucky position of not having to do so, as I was clearing the mortgage pretty quickly and the outstanding balance was reducing at a fair rate of knots meaning that I didn't need access to so much 0% credit. Today, the level of my stoozing pot is less than half of its maximum - mainly because fee-free 0% cards are a thing of the past, but also because the mortgage is gone - I suppose that I was simply a lucky benefactor of cheap credit being made available very easily to me during the time that I wanted to make the greatest impact in cleaing my mortgage.

As for perls of wisdoms, I simply set myself a target and stuck to it. I designed a realistic budget which still allows me to fund purchases of CDs and meals out. I ensured that if I overspent in any one month, I would need to underspend the following month (or apply for another 0% card ).

The most important thing of all is to stay totally focused. It doesn't matter whether your target is 1 year, 10 years or 20 years. It can be done. Just stick to your goals.

Good Luck!!

sorry for my ignorance, but did this not mean you had loads of credit searches carried out and at times had loads of cards with debts?
did this not adversely affect your credit score?

i assume you were able to get an new card when each 0% was running out to pay off your debts on that card.

what would have happened if the card company had not offered a limit that covered what you owed on the card you were looking to get rid of?

i maybe need to look into stoozing more but your post brought up those questions to me

[Deleted User]

If your records really spotless then I guess they let you get away with it.

I suppose itll be much harder to do something like this now, for 1 we have transfer fees of 2-3% which is only 2 points off a good mortgage. Also the banks are tightening their belts given that the credit bubbles bursting, their profits will also be hit by the UK tightening up on their illegal practices (charges and PPI). So once everythings hit the banks itll prob be a good time to buy shares in them once the s**ts hit the fan and covered all the walls. The prices and dividends will then grow as they find new illegal practices.

~daisy~_2

terrierlady wrote: »

Guess what thanks to all the advise picked up on here over the last couple of years we have paid our last payment today, we gained cash from the endowment compo and by overpaying each month Thank you to all the people who gave their knowledge for free and encouraged us all .
:beer:

well done - definitely deserves a :beer: and a little :j !!!!

great acheivement

Martinslovechild

COOLTRIKERCHICK wrote: »

I was thinking of maxing out a 0% credit card and putting the money in a high interest account.....now this is the question......if i transfered money from a credit card to let say a saving account..... surely this is like taking a cash withdrawel from the credit card so you get charged ? or does trasnfering money from a credit card to a bank/savings account is like paying off another credit card..?

No - you must have what's called an SBT (Super Balance Transfer) card. There are pretty much only one or two remaining, but they are still available. One such card is Egg Money. You apply for a 0% card (let's assume this is with NatWest who offer you a limit of £5,000). You ask NatWest to transfer a balance of £5,000 from your Egg Money card. Bear in mind that the Egg Money card doesn't actually need to have £5,000 worth of debt sat on it. Now you have £5,000 on your new shiny NatWest card (at 0%) and a credit of £5,000 on your Egg Money card.

Now, to move the money from your Egg Money card, on the Egg website you simply request to transfer a balance from your current account to the Egg Money card. At this point, your Egg balance returns to zero and there's now £5,000 sitting in your current account. Once the money's in your current account, you're free to move it to wherever you like including a savings account or cash ISA. At the end of the NatWest 0% period, you'll either have to repay the amount borrowed or move the balance onwards to yet another 0% card.

This whole process is called stoozing and you can find lots more info at www.stoozing.com. Note that you'll have to pay minimum payments to NatWest for the duration of the 0% offer - this will reduce your amount outstanding at the end of 12 months to less than £5,000 but you'll need to decide how to fund those minimum payments, either withdrawing the cash from the original £5,000 borrowed or out of your own salary/savings.

COOLTRIKERCHICK wrote: »

mlc...... your mortgage free journey has inspired me to TRY and find/save money for my dream...( buying a small holding ) dont know if i can do it but hay.... if i dont try.... i will never know......

Absolutely - go for it. Anything's possible. Stay focused - that really is the key! Good Luck.

barryheffron wrote: »

sorry for my ignorance, but did this not mean you had loads of credit searches carried out and at times had loads of cards with debts?

Yes, lots of credit searches over the past 6 years, although I generally limited my number of applications to never more than about 6 per year. If I'd applied for 3 cards in a short period of time, I would tend to wait at least 4 months before applying for more.

If I needed a card pretty quickly (i.e. if one of my existing 0% offers was about to expire) and I'd applied for several immediately prior to that time, I would ask my wife to apply in her name. Generally, between us, we were always successful in our applications. I was however rejected on a couple of occasions, but wrote nice letters to the credit card companies concerned - in both case they overturned their original decision and offered me a card.

barryheffron wrote: »

did this not adversely affect your credit score?

I'm still able to get more credit cards and my bank has recently offered me a very large mortgage (I haven't accepted), so 'No', there's no issue with my credit score. I would always suggest keeping credit applications to less than 10 per year (or 20 if you & your partner are both in it together) to prevent long-term damage to your credit score though.

barryheffron wrote: »

i assume you were able to get an new card when each 0% was running out to pay off your debts on that card.

Yes, that's what continually surprised me. I never started out thinking that I'd ramp up over £100,000 worth of 'debt' - I never expected to get past £20,000 at 0% !!

barryheffron wrote: »

what would have happened if the card company had not offered a limit that covered what you owed on the card you were looking to get rid of?

Then I would simply have made a withdrawal for the necessary amount from the mortgage overpayment fund to clear the card before the expiry of the 0% deal.

barnishroader

Martinslovechild wrote: »

No - you must have what's called an SBT (Super Balance Transfer) card. There are pretty much only one or two remaining, but they are still available. One such card is Egg Money. You apply for a 0% card (let's assume this is with NatWest who offer you a limit of £5,000). You ask NatWest to transfer a balance of £5,000 from your Egg Money card. Bear in mind that the Egg Money card doesn't actually need to have £5,000 worth of debt sat on it. Now you have £5,000 on your new shiny NatWest card (at 0%) and a credit of £5,000 on your Egg Money card.

Now, to move the money from your Egg Money card, on the Egg website you simply request to transfer a balance from your current account to the Egg Money card. At this point, your Egg balance returns to zero and there's now £5,000 sitting in your current account. Once the money's in your current account, you're free to move it to wherever you like including a savings account or cash ISA. At the end of the NatWest 0% period, you'll either have to repay the amount borrowed or move the balance onwards to yet another 0% card.

This whole process is called stoozing and you can find lots more info at www.stoozing.com. Note that you'll have to pay minimum payments to NatWest for the duration of the 0% offer - this will reduce your amount outstanding at the end of 12 months to less than £5,000 but you'll need to decide how to fund those minimum payments, either withdrawing the cash from the original £5,000 borrowed or out of your own salary/savings.


Absolutely - go for it. Anything's possible. Stay focused - that really is the key! Good Luck.



Yes, lots of credit searches over the past 6 years, although I generally limited my number of applications to never more than about 6 per year. If I'd applied for 3 cards in a short period of time, I would tend to wait at least 4 months before applying for more.

If I needed a card pretty quickly (i.e. if one of my existing 0% offers was about to expire) and I'd applied for several immediately prior to that time, I would ask my wife to apply in her name. Generally, between us, we were always successful in our applications. I was however rejected on a couple of occasions, but wrote nice letters to the credit card companies concerned - in both case they overturned their original decision and offered me a card.


I'm still able to get more credit cards and my bank has recently offered me a very large mortgage (I haven't accepted), so 'No', there's no issue with my credit score. I would always suggest keeping credit applications to less than 10 per year (or 20 if you & your partner are both in it together) to prevent long-term damage to your credit score though.


Yes, that's what continually surprised me. I never started out thinking that I'd ramp up over £100,000 worth of 'debt' - I never expected to get past £20,000 at 0% !!


Then I would simply have made a withdrawal for the necessary amount from the mortgage overpayment fund to clear the card before the expiry of the 0% deal.

thanks for that very comprehensive answer.

one more question though!!

i have a halifax card and had been paying it back with a standing order each month.
when the card was paid off, i hadn't cancelled the SO and my account went into credit.
i rang halifax to say i didn't want the account in credit and they moved it back to my halifax current account and there was no charge.

would i be able to stooze in the same way?

i only ask as i have this card had a £2000 limit on it and now i don't use it due to interest charges and my other card is maxed with balance transfers although it is still 0% to transfer to it.
I was thinking of getting a new card and using the halifax card as you had used the egg card but not sure whether Halifax allow me to transfer money again.

miss_saveapenny

:beer: not sure if i am doing this right ....oh well here goes, firstly i love this site. I have got some great ideas and enjoyed reading all the threads but, i have never dared join in. This is a great story and it has spurred me on,I rang my mortgage lender thinking they wouldn't let it me overpay as i have a 5 year fixed rate but to my surprise i can pay an extra £500 per month with no penalties, so thanks for making me look into it:T . I'm not sure how much it will reduce the term but it has to be good. I also looked into stoozing,not sure on that yet though.thanks

Martinslovechild wrote: »

Insert By Martin

First of all let me state for the record. Martinslovechild is no relation of mine; and I suspect he's older than me anyway! . Yet his story below is inspirational and worth all MoneySavers having a read of.
_____________________________________________


Hiya,

I've written this same explanation on the new 'MFW Roll Of Honour' thread (thanks Dithering Dad!).

For sake of ease, I've copied my response here also...

I decided to become a MFW in May 2001, at which point my mortgage was £129,000.

I remember thinking how much of an achievement it would be to become mortgage-free before I hit the big '40'. In 2001, my mortgage had been running for 8 years and would have 17 further years left to run.

I telephoned the bank and asked for the monthly cost of reducing the outstanding mortgage term by 1 year, 2 years, 3 years, 5 years, 7 years & 10 years respectively. I can't remember the actual figures quoted but I do remember that reducing the mortgage by 10 years cost an extra £435 per month; this was the option we decided to go for based on a budget I'd done, which determined that we could afford regular overpayments of about £500. This immediately reduced the term to 7 years, which was very good news!!

I was tied into a mortgage deal at the time which didn't allow overpayments (but bizarrely allowed me to reduce the term thereby having the same effect). There were of course penalties for making any overpayments during the discount term which would last until February 2003.

In February 2003, I immediately applied for a more flexible mortgage with a different lender which would allow overpayments, underpayments & drawdowns. Again, during the initial period (through to October 2004), I was restricted to making overpayments which were no more than 10% of the outstanding mortgage per annum.

Around mid-2003, I discovered 'stoozing'; as I would discover, this was to play a very big part in my clearing the mortgage. In 2003, I applied for my first 0% card and discovered just how easy it was to move the borrowed money into my current account, from where I used it to first clear my wife's car loan (remember, I couldn't overpay the mortgage by more than 10% at this time). Once my wife's car loan was fully on 0% (this took 3 credit cards in both mine & my wife's names), I applied for further 0% cards to clear my own car loan. I then ensured that I paid the full 10% mortgage overpayment by borrowing even more cash, all of it at 0%.

In fact, once the cars were on 0% and I'd repaid the 10% on the mortgage, I decided to keep going - I maxed out on an increasing number of 0% cards. During 2004, I continued to borrow on 0% cards. In fact, when the 10% overpayment restriction eventually expired on the 1st November 2004, I immediately overpaid an amount totalling £51,500 into my mortgage overpayment fund!! At this point, my outstanding mortgage balance fell to just £6,500 - in other words, I was paying just £58 per month in mortgage interest, compared to the £326 that I should have been paying!! I was saving £268 a month in interest and an extra £3216 was being paid off my mortgage each year as a result of 0% cards!!

I eventually accrued a stoozing pot of over £100,000. This was in addition to my wife's pot of £37,000. This was quite staggering as my earnings are nothing like this amount. Since the stooz pot hit this amount, it got progressively more difficult to maintain this level, so it was fortunate that as time went on and I was unable to replace some credit cards with fee-free 0% cards, I was in the lucky position of not having to do so, as I was clearing the mortgage pretty quickly and the outstanding balance was reducing at a fair rate of knots meaning that I didn't need access to so much 0% credit. Today, the level of my stoozing pot is less than half of its maximum - mainly because fee-free 0% cards are a thing of the past, but also because the mortgage is gone - I suppose that I was simply a lucky benefactor of cheap credit being made available very easily to me during the time that I wanted to make the greatest impact in cleaing my mortgage.

As for perls of wisdoms, I simply set myself a target and stuck to it. I designed a realistic budget which still allows me to fund purchases of CDs and meals out. I ensured that if I overspent in any one month, I would need to underspend the following month (or apply for another 0% card ).

The most important thing of all is to stay totally focused. It doesn't matter whether your target is 1 year, 10 years or 20 years. It can be done. Just stick to your goals.

Good Luck!!

Martinslovechild

barryheffron wrote: »

I have a halifax card and had been paying it back with a standing order each month.
when the card was paid off, i hadn't cancelled the SO and my account went into credit.
i rang halifax to say i didn't want the account in credit and they moved it back to my halifax current account and there was no charge. Would i be able to stooze in the same way?

I don't believe that Halifax will allow you to BT from another card to theirs to push it into credit. They amended their T&C's some time ago to prevent this (due I believe to stoozers who were using this facility). There were a number of examples of people who attempted to BT several thousand pounds onto their Halifax cards then phoned Halifax to explain that they'd credited their card by mistake and would Halifax refund the cash into their current accounts? Halifax initially used to allow this but now refund it back to the place where the cash has just come from (i.e. back to the new 0% card).

The moral of this one is to apply for an Egg Money card. Because the Egg Money effectively allows you to go into credit (hell, they even pay you 4% interest if you do!), there's no problem pushing it into credit by transferring a balance from another card to it.

Best of Luck.

miss_saveapenny wrote: »

:beer: not sure if i am doing this right ....oh well here goes, firstly i love this site. I have got some great ideas and enjoyed reading all the threads but, i have never dared join in. This is a great story and it has spurred me on,I rang my mortgage lender thinking they wouldn't let it me overpay as i have a 5 year fixed rate but to my surprise i can pay an extra £500 per month with no penalties, so thanks for making me look into it:T . I'm not sure how much it will reduce the term but it has to be good. I also looked into stoozing,not sure on that yet though.thanks

Welcome to MSE, Miss Save A Penny.

Brilliant news - it's amazing how the banks don't seem to publicise all the benefits of their accounts and we as consumers naturally assume that their offerings are very restrictive. I retained every bit of paperwork from my mortgage lender - it's no coincidence that of the 23 marketing letters they sent me over the course of my mortgage, just 1 related to opening a savings account - the remainder advertised loans, extending my mortgage, did I fancy a new conservatory etc...

It's certainly good news that you can repay up to £6,000 per annum. Have a quick search for an overpayment calculator on google - you'll be surprised how much this will save you over the course of your mortgage (a lot!).

~daisy~_2

Martinslovechild wrote: »

it's amazing how the banks don't seem to publicise all the benefits of their accounts and we as consumers naturally assume that their offerings are very restrictive. I retained every bit of paperwork from my mortgage lender - it's no coincidence that of the 23 marketing letters they sent me over the course of my mortgage, just 1 related to opening a savings account - the remainder advertised loans, extending my mortgage, did I fancy a new conservatory etc...

this is something that im really cross about - see HERE - we only realised when we started re organising our mortgage fairly recently - if we had started over-paying and paying our 10% a few years ago we could have been so much further down the mortgage free road instead of just coasting along and wasting so much money on nothingness

Martinslovechild

~daisy~ wrote: »

If we had started over-paying and paying our 10% a few years ago we could have been so much further down the mortgage free road instead of just coasting along and wasting so much money on nothingness

Absolutely. I took my last mortgage out on the basis that it came fully loaded with flexible features. People generally pick up on the bad points (i.e. they come with a higher rate than 'standard' mortgages) but I didn't care too much about this because I looked at the bigger picture. One month when I allowed the overpayment fund to be just £100 lower than the outstanding mortgage balance, I paid less than £5 interest for that one month!

Anyway, don't be put off by only being able to overpay 10%. Once you've overpaid the maximum 10% into your mortgage, simply pay any remaining disposable income into cash ISAs or a savings account. As soon as your savings equal the outstanding mortgage balance, simply pay the mortgage off - I certainly wouldn't wait 10 years or even 3 years for the privilege.

As they say, there's more than one way to crack a nut .

esthomizzy

I'd like to try stoozing the mortgage but I have a suspicion they'll take one look at the size of my mortgage compared to my income and say ha I don't think so.