Can we be DMP & mortgage free in less than 10 years? 22 April 2014 at 7:33PM edited 22 April 2014 at 8:51PM in Mortgage-free wannabe 7 replies 1K views

Murphy2011

So, here's the thing.

Had a rather enforced LBM Oct 2012 when having managed to career our way past redundancy (his), crappy ex spouses (mine & his) and general life being a pain in the backside (don't we all have this at one stage or another??) well we pretty much hit rock bottom.

Won't bore you with the details but £50k we were advised to expect from the estate of a loved one turned out to be considerably less and the rug was well and truly yanked out from under us. Hence the LBM which frankly was a godsend and I wish had happened a long time ago.

Having suffered from on and off depression for many years I had a major meltdown & ended up in hospital for a while which did at least enable me to take that metaphorical step back and think " To hell with this, I'm not living my life like this anymore sunshine!!":mad:

Anyway, DMP started in Nov 2012 & we have paid back a hefty chunk. All creditors have defaulted so no interest and charges and current debt free date would be Dec 2020.:T

Both work full time, hubby away from home to maximise earnings and no chance of extra jobs due to hours, particularly hubby as bless him, he averages a 70 hour week

OH gets a small pension which is due to go up in May and we can afford to increase the DMP as well which will reduce DFD to April 2020. (Increase the payment to £800pm)

Also I am now potentially able to earn quarterly bonuses of anything up to a few thousand which we would look to pay directly into the DMP to reduce this further.

Mort is due to end in 17 years when I will be 65 & OH 72, £150k outstanding @ 2.25% over BR lifetime tracker, no penalties for overpayments, capital & repayment basis. Got to be honest, really badly don't want to be in debt that long!!!

Here's my plan, feel free to pass judgement/witticisms etc, all helpful comments gratefully appreciated!

1) Increase the DMP payment and pay off lump sums with a view to reducing the term to 4 years or preferably sooner
2) Overpay the mortgage by £300pm until the DMP is paid and then pay all of the DMP amount as additional overpayments on the mortgage, should be able to clear definitely within 10 years and hopefully sooner!
3) I'm going to check whether I can also make ad hoc payments with some sort of paying in book, give them a call tomorrow and start saving all the odd change!
4) if 3) is possible then also have an Ebay/car boot clear out and get the balance down even more!!!

I hope people will understand and be ok that we are making this mortgage free plan when we have the DMP? We very much felt that DMP was the route we wanted to go when we got into the mire as although we couldn't keep on top of the minimum payments we genuinely wanted to pay back our debts even if it took us a long time.

I am starting this diary as well as keeping up my grade A lurking on the Debtfree Wannabe and DMP forums, thanks for reading and apologies for getting so much off my chest all at once!!

muddywhitechicken

Welcome to MFW :wave:

I've no knowledge of DMPs so I can't comment on your plans; however, I just wanted to wish you the best of luck!

kirstypark

hello and welcome - your plan sounds good. we started paying small bits off our mortgage whilst we still had debt - once we got rid of that, then it was easy to continue paying the mortgage too. Like you, we were a bit daft in the past with money, and wish we had learned this lesson earlier - but i love being in control of every penny now!

Murphy2011

Thanks for checking in Muddy White Chicken and Kirsty park, lovely to know people are thinking of us kindly.
Not quite sure that today has been utterly successful in terms of funds raising or saving as I forgot to take the mortgage details to work with me and it was too late to phone when I got home. (Why DO places like mortgage lenders, Inland Revenue etc not have longer opening hours...?)
Did get the car and home insurance renewals through and they have actually gone down so I will have a look on the comparison websites to see if I can get her ammo to get them down further, yay!
Have a good evening all and I hope to have more successful savings news tomorrow!

Alchemilla

Babysteps!
Welcome and Good Luck!

Murphy2011

I know Alchemilla but isn't it in the nature of us debt free wannabes & over spenders to be just a little bit impatient? Patience is a virtue that I need to learn in all things! Thanks for the welcome and good wishes.

Murphy2011

Well a good and effective Thursday has been had although the bank balance has unfortunately gone the wrong way again due to youngest stepchild needing extra petrol money AGAIN! Luckily tomorrow is payday for OH (gets paid weekly which can cause fun when budgeting...particularly as his earnings can fluctuate by £200 per week!)

I did however remember to take the mortgage paperwork to work with me today and made that call during what passes for my lunch break...I won't stretch the boundaries of truth by calling it a lunch hour and it is pretty much always spent at my desk unfortunately!

Anyway, the comeuppance of this was to get an up to date balance of £150357 (yay!), to confirm targeted mortgage free date with no overpayments will be 17 years and 6 months (boo!) but also that I can make combinations of overpayments without penalty (double yay!!)

I think I'm going to try and switch over any pennies that are left in the account at the end of the week straight over by bank transfer and that way we won't miss it and as a well known supermarket (which I don't use as I prefer to get a cheaper shop in A**i or L**l !!) says, "Every little helps!"

So as the weather has been better today as well I'm thinking we might try a car boot this weekend and possibly a bit of Ebaying, I managed to pick up a lovely 2nd hand bike for my daughter a few days ago..was priced at £75 so I obviously haggled and got that down to £65 but also her old one hadn't been used that much so hopefully we can sel that on as well....yay!!! She is on a bit of a fitness kick and as she is 14 frankly I'm going to try and help anything that gets her out into the fresh air!

I'm also going to do the shopping online tonight as well...I know I have to pay a delivery charge but if I get it delivered late tomorrow night I can keep that quite low and I always find it easier to stick to a budget when I don't have extra things to draw my attention and find their way into the trolley.....hmmm, lots of money saving plans afoot.

Anyway, must stop gassing, hope everybody else has had an excellent day and looking forward to having a profitable weekend!

Murphy2011

Mellow weekend, relatively child free which always means we spend less TBH, treated ourselves to watching Walter Mitty on Sky, all of £4.49 for a happy snuggle night in with hubby rather than probably £25 if we had gone to the cinema. I've almost got £25 on Quidco opinions which means I can get it paid out and £45 due from RAC through Quidco as well, sweet! I'm trying to get together odds and sods which I can then use for food & petrol for the week so that will mean I can leave what was planned into the budget into the account for next week. Every little helps as they say. Weather not good enough for a car boot but hopefully next weekend, also I'm going to put a few things on Gumtree as well so maybe a few more £ there. I'm also looking into the free insulation offer from British Gas to see if we qualify and then hopefully that will save on the heating bill. All in not a bad MFW weekend!