Free at last….now to be Mortgage free!

keza

hi everyone,

I have attempted a diary on this board about a year ago when we were trying to sell our house next to a nightmare neighbour.

Well we finally sold the house with a £20k loss which we hope to recoup in our ongoing legal battle with the previous owners….for now, i am pleased to say, we are away from that nightmare and now in a lovely little house we weren't even up for considering!

So far we have done a lot of renovation. we managed to get it for £195k with a £175 mortgage. we have put in a new kitchen and bathroom, put in gas and central heating amongst other things like redecoration and the front. we have spent just over £25k so far but the house is now worth £240k so at least we have made out £20k loss from our previous property back!

So onto the here and now. We are about to stick the house renovations onto the mortgage, which isn't a necessity but after having to save up a new £20k deposit having done it once on our previous home, we would like to have some sort of life rather than watching every penny.

that said, we have a 2 yr old son and plan on having another baby soon, and i will give up work to finish my degree and become a teacher so putting the renovations cost on the mortgage seems like a sensible thing to do.

We have no other debt between us and I hope to start making small overpayments shortly.

So thats a long introductory post! I will post a soa in a while and take it from there! thanks for reading

keza

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 2
Number of children in household......... 1
Number of cars owned.................... 1

Monthly Income Details
Monthly income after tax................ 1548
Partners monthly income after tax....... 2354
Benefits................................ 80
Other income............................ 0
Total monthly income.................... 3982

Monthly Expense Details
Mortgage................................ 820
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 149
Electricity............................. 34
Gas..................................... 85
Oil..................................... 0
Water rates............................. 6.35
Telephone (land line)................... 10.5
Mobile phone............................ 45
TV Licence.............................. 12
Satellite/Cable TV...................... 24
Internet Services....................... 15
Groceries etc. ......................... 250
Clothing................................ 200
Petrol/diesel........................... 50
Road tax................................ 2.5
Car Insurance........................... 29
Car maintenance (including MOT)......... 20
Car parking............................. 0
Other travel............................ 170
Childcare/nursery....................... 300
Other child related expenses............ 50
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 14
Contents insurance...................... 0
Life assurance ......................... 12
Other insurance......................... 0
Presents (birthday, christmas etc)...... 50
Haircuts................................ 30
Entertainment........................... 200
Holiday................................. 0
Emergency fund.......................... 500
Total monthly expenses.................. 3078.35


Assets
Cash.................................... 1000
House value (Gross)..................... 245000
Shares and bonds........................ 1000
Car(s).................................. 5000
Other assets............................ 0
Total Assets............................ 252000


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 196000...(820)......2.5
Total secured & HP debts...... 196000....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Total unsecured debts..........0.........0.........-


Monthly Budget Summary
Total monthly income.................... 3,982
Expenses (including HP & secured debts). 3,078.35
Available for debt repayments........... 903.65
Monthly UNsecured debt repayments....... 0
Amount left after debt repayments....... 903.65

Personal Balance Sheet Summary
Total assets (things you own)........... 252,000
Total HP & Secured debt................. -196,000
Total Unsecured debt.................... -0
Net Assets.............................. 56,000

Created using the SOA calculator at https://www.stoozing.com.
Reproduced on Moneysavingexpert with permission, using other browser.

keza

so here we go, first step completed, accessing the mortgage account online

gallygirl

Good luck

keza

quick update from me a few weeks on from the start of my diary.

We went to the mortgage advisor asking to borrow the £22k outstanding for home improvements to run alongside out mortgage of 30 years and the rules have changed….we can only have it over 10 which is not going to be worth our while or money. min pyt will be £247 a month for 10 years and the interest will be over 7k.

so we have revised out plan and made a decision to keep ploughing away at clearing the debt while its at 0% interest and what we don't clear by the time we have baby no 2, we will put on an affordable loan with a much lower % rate. we are hoping to clear at least 10k in the next year with a lot of work. this in effect is like clearing £10k off our mortgage as we have made the money in equity.

I'm quite happy with this plan and happy it is at 0%, i hate the banks getting anymore of my money than necessary!!

Emthemist

Subscribing!

Good luck on your journey x

keza

Just realised, its probably a good time for me to introduce said 'debt' caused by the renovations.

SO the house was purchased for £195k and we have spent quite a chunk on renovations namely:
full decoration throughout,
Installing mains gas,
Gas central heating,
gutting the kitchen and bathroom,
rewiring the kitchen and the circuit board,
plastering the kitchen and bathroom,
skimming the ceilings,
brand new kitchen and bathroom from a certain orange DIY store ,
removal of a 1960s stone clad chimney breast in the front room,
new carpets,
and some new furniture as the old stuff fell apart!

In total this has set up back in the region of £30k give or take a few thousand.

Currently we have the following oustanding debt
MBNA 0% until May 2015 - £10,816.33 (starting balance £12,480.00)
Barclaycard 0% until Oct 2014 - £5,606.41 (starting balance - growing but now stopped!)
First Direct Loan - £6,312.20 (starting balance £7,450)

The house is now valued at £245,000 so we were going to remortgage but understand this has to be over 10 years and at a cost of interest in the region of £8k. So we have decided instead of paying off the mortgage balance via overpayments, apply the overpayments to the debt as if it was on the mortgage as planned (except interest free!). Currently we have an outstanding mortgage of £172,540 meaning current equity is almost 30%.

So heres my starting efforts:

some bits sold on 3bay last night for around £10 so that will get added to our tiny pot....well i have to start somewhere!

I am going to aim to find an extra £100 to start of with each month aswell as the following minimum payments:
MBNA - £110
Barclaycard - £120
FD loan - £210

Emthemist

Wow sounds like you've done loads! You must be very pleased with yourself and your shiny house! I can't believe you've done all that with a little one around too.

We gutted our house when we moved in. Couldn't afford to get anyone in to do anything (except for gas related things) so send DH on a plastering course and he did it all! Although he did a fantastic job, there are still loads of niggly finishing off bits that just aren't going to be done and that makes me sad. I think if we did it all again (which I don't really want to but my scrimpy ways tell me is likely to happen) I would pay to get in some decent professionals.

I'm assuming your FD loan has interest applied so be sure to make your overpayments on that one first, then once paid off snowball onto your shortest 0%. Hope that makes sense.

Em xx

keza

Hi Em.
great job sending you other half on a plastering course. Mine keeps tsalking about it but hasnt done it so we paid someone. ho hum! it really is worth while having a set skill isnt it!

and thanks for the tips on snowballing. I will aim to kill to loan first on this basis, although i also need to find out how much it is going to cost us to shift the debt when the time comes. still need to play with some figures.

keza

so today I have set up a pot for collection of overpayments and added the fleabay sales money to it. hopefully I can get this up to £100 every month for an extra payment, then empty it the day before payday.

I shant be paying much off until payday at present as we are slightly overdrawn due to DS nursery photos.

we currently have a 123 credit card which we use for shopping and diesel every month to achieve the cash back. trouble is, a!di dont accept credit cards for payment and we are a month in arrears as we pay it off in full on payday. im toying with scraping together the £380 shopping and diesel bill for this month and then using cash for shopping as the groceries cost around £320 a month at present, im sure I could get this down.

keza

oh and i have set some aims for the end of the year which are:

1) FD Loan - currently £6,312.20. Minimum payments will bring this down to £4,843.20 so I think if we aim for £4,500 by end of the year that will be a good start.

2) Barclaycard 0% till Oct 14 - currently £5,553.81. minimum payments will bring this down to £4,833.81 so I think an aim of £4,500 by end to the year is reasonable

3) MBNA 0% till May 15 - currently £10,816.33. minimum payments will bring this down to £10,216.33 so an aim of £10,000 by end of the year.

4) Mortgage will fall to £170,758.63 by end of this year.


Longer term (so ideally before a 2nd baby arrives which we are planning on being after May 2015)

1) FD Loan - clear completely.

2) Barclaycard - will need shifting towards the end of 2014 but for the sake of this high level plan, we can aim for £3,000

3) MBNA - the 0% ends in May so will need shifting then, aim to get this down to £9,000

4) Mortgage will then be £168,864.94


Then I guess once May arrives, whatever is left will need to be put on a 0% card or another loan to keep the payments low whilst I am on maternity leave.

so thats the plan.