My happy new year starts now - MFW - stuck in a rubbish mortgage

SJG123

So . . . Like everyone else keeping a diary here I have dreams of being mortgage free however with a total of £187K to clear it is looking a little unlikely that it will happen anytime soon.

OH works full time but as of this week I start a years adoption leave and so my earning potential is going to be limited.

I really want to use the next year to not only adjust to having two little people in our lives but to use the opportunity of my being a stay at home parent to adjust our way of living and to commit to all of the small changes that in total will help us become financially secure.

I have a theory that it is costing me money to go to work - After being out of the house 14 hours a day (includes a total 4 hour commute time) I am just to exhausted to cook properly and to think about pack lunches. Between the excess food expenses, travel, work clothes etc I am easily wasting up to £200 a month which if I was a stay at home mum or had a job closer to home I wouldn't need to earn.

Theory was proved today with my first NSD that I can remember ever!

Leading on from my rather boring title, the point to this diary is for me to motivate myself and to channel my efforts into spending the next year adjusting to the additional financial implications of 2 small children, only having half of my wages coming in trying to come up with a plan to deal with the mortgage.

The mortgage is going to be the tricky part as we are kind of stuck. We took out a part mortgage / part secured loan with Northern Rock just before they collapsed - OOOps - even more tricky as the plan had only been to stay on interest only for 2 years and then to remortgage into a repayment plan. Obviously this then fell through.

We are booked into see a mortgage advisor this week but it is not looking great for switching as the secured load part is £30k - even then if the nice lady manages to work some kind of magic I still really want to make OP. I really really don't want to still be paying a mortgage when I am 60 (35 now) if I can avoid it.

OH isn't entirely on board with the plan so it will be interesting to see how far I can take the frugality before he starts to object!

The New Year (for me anyway starts now), so wish me luck and inspiration!

kirstypark

good luck and congratulations on becoming parents.

Habibiboo

:wave:

Lots going on for you there, such poor luck with the mortgage, let's hope the advisor comes up with something useful for you (but remember to get a 2nd opinion if they do, because they're not always as independent as they may seem)!

We too are stuck because I'm not earning nearly as much as I was when we took out our mortgage (due to illness I've had to downshift careerwise) so I doubt we'd be lent what we still owe, hence we're stuck with a silly high interest rate, so I have every sympathy / empathy with you.

That said, you have lots of positives, not least your positive and pro-active attitude and your impending arrivals (you must be so excited)! Many congratulations and best of luck for all angles of your busy days to come!

Muser1

Very exiting times! Congratulations on the new little people in your lives. Good luck with the mortgage. X

Muser1

Ps meal planning, batch cooking and a strict shopping list/budget will save you a fortune. It's totally addictive. I find the old style board fab for advice and ideas. X

LauraJo

Wow what big changes in your life! Good luck, will follow with interest!

SJG123

Thanks everyone for your kind words of encouragement! Got up this morning feeling very enthusiastic and have been frantically searching the house for things to post on FB - posted 14 items so far but no takers yet. Have managed to fill the recycling wheelie bin though - I swear that the more rubbish I get rid of the more that appears!

Also managed to clear some clutter on freecycle so no pennies in the pot yet but a slightly emptier house.

Have also started planting all of the odds and ends of vegetable seeds that I have in my seed box - assuming any of them grow (some of them are a few years old) I will squeeze as much as I can in the garden and will try to sell any left over plants.

Thanks again!

SJG123

Woo hoo - first sale on FB (£4)! and I found 20p under the sofa!

SJG123

Today did not go well with the mortgage advisor! Apparently we can't remortgage because I used a debt management plan a few years ago and now have a rubbish credit history.

The suggestion from the advisor was that we turn our interest only mortgage into a repayment mortgage ourselves by setting up a standing order. This way we can repay some of the capitol and reduce the amount that we are paying in interest. I didn't get the maths particularly but with he figures discussed today (I need to find an extra £200 per month on top of what we already over pay) the over all outcome will be that in 18 years (when the current mortgage expires) we will have reduced it from £187K to £60K ish.

Not sure where she thought we were suddenly going to find £60k in our mid fifties?

Hopefully by then I will have a better credit history.

On the plus side I did acquire the following today:
* £4 in grocery vouchers for providing customer feedback
* £2.10 on a Debenhams voucher that I found at the back of the drawer while looking for the mortgage paperwork
* Received the envelope today ready to recycle my old mobile £3
* Dropped by the £1 shop while I was in town to get some cheepy freezer boxes so I can start batch cooking.

Off now to see how many portions of chili I can get out of one pack of 500g of mince - Not sure how much veg I can get away with before the OH complains!

SJG123

Forgot to mention that the Dog cost me £111 pounds in vet bill this morning - Not entirely sure how it cost that much for a consultation and a blood test but by the time I knew the cost it was too late!

As much I don't want the dog to really be sick it at least justifies the ridiculous cost of the top tier pet insurance that OH insists we have, so I can claim most of it back but will need to eat cheep until it arrives!

edinburgher

Hi there SJG

Am I right in thinking that your entire mortgage is currently interest only? If so, I can see why your advisor tried to steer you towards repaying capital.

The majority of posters on this board (bar the savvy BTL types) seem to be using repayment mortgages. TBH I'd consider OPs on an interest only mortgage 'payment' more than overpayment.

I'm sure that she looked at your figures and tried to offer a solution that would be workable for you. I know that £60k seems like quite a lot, but it's not at all uncommon for people to use their pension commencement lump sum (i.e. 25% of your pension pot tax free) to pay off mortgages. I know very few of us will be lucky enough to have £240k in a pension pot, but between you and OH might it be possible?

Sorry for my waffle, what I basically meant to say is that her suggestion sounded quite good in principal. Obviously you'll need to find amounts that work for you.

Sorry you can't remortgage just now, I went through a DMP back in the day as well and can remember a time when I couldn't get a debit card, never mind a mortgage :eek: