Jumex's Mortgage Free Journey

Jumex

Hello there!

I have been meaning to join the world of mortgage free diary keeping.

Here's a little bit about me and Miss 'Mex (OH).

Last May we brought our first house together, after being together for 3 years we decided to start saving for a house, to do this we cleared any small debt we had and moved back into Miss 'Mex's parents house in order to save money as quick as possible, it was a big lifestyle from having our own place, but we saw it as an opportunity over anything else.

Our first house is a 2 bed terrace house, it has a kind of cottage feel about it. We were offered enough money to buy somewhere bigger but thought a 2 bed house was perfect for us, at least for a few years. Perhaps we should have saved for a bit longer, as we ended up with a Nationwide save to buy mortgage with a LTV of 95% and interest rate of 5.49%. All not very money supermarket, but it meant we had our own place.

Since last May we have been making the usual monthly payments, but no over payments, due to the following:

• Furnishing the house - We did have a small amount of basic furniture from a previously rented unfurnished flat, but nothing for a spare room, garden etc, we also wanted a new sofa as our cheap Ikea sofa was giving us back ache.
  
• A new car - My old car packed in around Feb-14, following this I was fed up with old cars and their constant repairs and took the plunge to get a new car.
  
• Wedding - We got engaged in Aug-13 and are getting married in Sep-14. All of which is very expensive. Both our parents are helping us with the wedding, but as some will know, weddings are expensive.

In amongst this I have moved jobs twice in the last year, and Miss Mex has moved job once. It's been a whirlwind last 12 months, but I'm looking forward to get the mortgage over payments in.

Jumex

The Plan.

For now we're very much focused on our big day in September. We're both very excited for the big day.

After the wedding is when the serious OP's will kick in. Today I did make my first over payment £3.20 just to test how long it takes until it shows on the online statement, I'm guessing overnight.

We are able to make £500 OP's each month with Nationwide. I suspect we wont be able to do this every month, but I'm hoping we'll be able to do around £300-400 each month when we have a bit more financial flexibility.

We have quite a bit of cost certainty. We don't splurge too much money for a couple in our mid/late 20's (I'm 28 and Miss Mex is 26). I plan on building up a bit more a detailed budget and affordability in the next few months. We both work full time with no dependents, other than our Cat.

We've spent a lot of time and a small amount of money decorating our place which we're hoping is mostly done now. The hope is that after our big day we'll see the benefit of less outgoings.

Miss 'Mex is currently learning to drive at the moment, she never did it when she was younger, it's a useful skill to have and there's never a cheap time to do it. All things going well, she'll be passed by the end of Summer, freeing around £200 a month.

We're planning on staying in our current property for at least another 2 years. During this time we'll have to save for the cost of moving around £5000, and additional equity as we have a relatively high LTV. The high LTV is part of the need to over pay. If we can get the LTV down to 80% in our current property this should be comfortably enough equity to take with us into our next place as our mortgage is portable at it's current rate until May 2017.

Jumex

So, first overpayment is in. Looks like it registers overnight. Also noticed that interest is re-calculated daily, not a big problem but means it's probably more efficient if I make any overpayments as soon as I have the money rather than waiting weeks at a time to make them.

Last night I stuck an old exercise bike on e-bay, we've not used it in a year and it's in pretty decent condition. Hoping to get £30-40 for it. That'll go straight in to any OP. I also have a 2 cheques on there way from musicmagpie so when they arrive they'll go in as an OP.

Also went for a few drinks with a mate, not something I do often on a Monday night, but he's not around much with him living in Manchester and me in Wilsthire. Only spent £12 though, so a pretty cheap evening.

GaLa15

Good Luck

newgirly

Best of luck

Jumex

So, looking at the overpayment policy on Nationwide

If you overpay by less than £500, the balance of your mortgage will reduce and you will be charged interest on the lower balance from the following day. At the next natural mortgage payment change, your monthly payment will be recalculated to include any overpayments you have made.

I'll get in contact with nationwide and hopefully they'll change this for me, I suspect most months I'll be under £500 but I'd still like to reduce the term, not future payments

midnight_child

Hi Jumex,

Best of luck with the mortgage and upcoming wedding.

If you need to make minimum payments of £500 then you could just save up in a savings account each month/week/day. When you hit the magic number you then pay it off as a lump sum.

MC

Jumex

midnight_child wrote: »

Hi Jumex,

Best of luck with the mortgage and upcoming wedding.

If you need to make minimum payments of £500 then you could just save up in a savings account each month/week/day. When you hit the magic number you then pay it off as a lump sum.

MC

Thanks MC. For now I think I'll continue paying off little and often, as at my current rate £500 will take a few months.

After the big day we'll probably be able to build up £500 on a more regular basis.

Paid for the home insurance today, did it as an annual payment, meaning money is a bit tighter this month but save £20 odd in interest payments.

Off to Wales this weekend to stay in a cottage for a few days, got to have little treats now and again. Is a relatively cheap get away, last one before the wedding. (Well, apart from my stag - which I don't think will be a 'holiday').