MF by 30!

StrawberryJam132

Luckyinlife wrote: »

Ah right kinda in the same situation really i ow 65kish now at 27 :]

my aim is 35 Mf :]

Hi Luckyinlife, I just had a read through your diary, you're so good at saving and juggling funds!! When I'm feeling lazy I'm going to read it to keep me on track :T I like your to-do list idea, so I'm going to steal that, I hope you don't mind?

To-Do List
- Cancel pet insurance for all three animals (save £240 p.a.)
- Decide if I should cancel TV license (save £145 p.a.).
- Renew home insurance/life insurance (cheaper deals).
- Research cheaper cars (mine costs £600 tax a year!!).
- Get on top of work to achieve pay rise (nearly there).
- Finish essay (due tomorrow :eek: nearly two thirds of the way through this course! One step closer, woop!

Hope you're all well!

SJ x

Luckyinlife

Thanks SJ :] no worry's its a good idea just to keep track of whats going on :]

StrawberryJam132

Day 207 of following my dreams:

My brain is fried through writing this essay that's due tomorrow. Procrastination was in order, and I came across the famous Tilly Tidies! I love this idea!

So here's my first TT! :money:

OP UPDATE:
£25 transferred (Tilly Tidies)!
Total '15 OP: £525/£4,000 (13%)

bexster1975

Ooh that's quite a big Tillies tidy SJ!

Hope that essayis done!!

Bexster

StrawberryJam132

Hi bexster1975 :hello: I think the large TT was a by-product of rebelling against this essay And no, the essay is not done About 70% through I think. I'm going to crack on after this post.

I have a few questions for all the more experienced MFW's out there

My fixed rate of 3.44% is up at the end of November, and I'm trying to understand all the processes and lingo to go with that.

I can't decide what's best to do. I've come up with three options...
(please let me know if you can see a better one :beer:)

1. Is it better to stay with my current lender on the SVR? Bare in mind I'm a rookie with this, but I read somewhere that the SVR for Lloyds is 3.99% at the moment. Does this go up and down a lot? I'm weary of the huge fees for switching...

2. Try and get a fixed rate with my current lender (Lloyds). If you stay with your current lender, and get another fixed rate, do they charge you fees? Also, I'm worried about only being able to OP 10% annually. That's going to put a spanner in the works as I get lower. I'm on 51k at the moment. Although, if I shorten the term, that will free up some space for OPs? Will I just have to save and then OP in bulk?

3. Change lenders and pay the fees. However I done a preliminary search and I don't think I'm going to get better than 3.5%, and that's if I hit my target of reaching 25% deposit by the time I need to remortgage, which is slim if I have to pay remortgage fees.

If anyone can give me some advice/tips or are able to point me in the right direction I'd really appreciate it.

Thank you for your time!

SJ x

bexster1975

Wow! I wish my rebellion was always so responsible!

Re your mortgage questions

SVR is generally related to the Bank of England base rate that has been 0.5% for ever ( that's a slight exaggeration, but several years now). Depending on who you are listening to, there are noises that suggest this may increase in the next 12 months but the truth is, no one knows. There is nothing to say SVR have to increase then but they may.

I think your question about fees is very sensible. I can't comment for lloyds, but I remortgaged for SVR with Halifax ( so same banking group) last summer for no fee. If the product you are interested in has a fee its a bit of work to see if it's worth the fee based on the difference in interest rates and the term of the deal.
I think the 10% per year capis an issue. As it is that's only £5000 for you, and as you say as it goes down it will make an impact. Both ways you suggest mitigate much of this however. You could decrease the term so increasing your monthly repayments or save the difference and pay it off as a deal ends before you get another.

I'm doing the latter, as it also gives me some flexibility and I am almost fully offset. I'm also not fanatical about being mortgage free literally ( but that's different for different people). The fact I have the savings to pay it off next autumn when my fixed ends is enough for now. If I pay if off then, great - if I decide I need to keep some fine too. Lots to think about.

I know you won't be reading this though as you are finishing that essay!!

Bexster

StrawberryJam132

bexster1975 wrote: »

Wow! I wish my rebellion was always so responsible!

Re your mortgage questions

SVR is generally related to the Bank of England base rate that has been 0.5% for ever ( that's a slight exaggeration, but several years now). Depending on who you are listening to, there are noises that suggest this may increase in the next 12 months but the truth is, no one knows. There is nothing to say SVR have to increase then but they may.

I think your question about fees is very sensible. I can't comment for lloyds, but I remortgaged for SVR with Halifax ( so same banking group) last summer for no fee. If the product you are interested in has a fee its a bit of work to see if it's worth the fee based on the difference in interest rates and the term of the deal.
I think the 10% per year capis an issue. As it is that's only £5000 for you, and as you say as it goes down it will make an impact. Both ways you suggest mitigate much of this however. You could decrease the term so increasing your monthly repayments or save the difference and pay it off as a deal ends before you get another.

I'm doing the latter, as it also gives me some flexibility and I am almost fully offset. I'm also not fanatical about being mortgage free literally ( but that's different for different people). The fact I have the savings to pay it off next autumn when my fixed ends is enough for now. If I pay if off then, great - if I decide I need to keep some fine too. Lots to think about.

I know you won't be reading this though as you are finishing that essay!!

Bexster

Hi Bexster, thank you so much for your reply! It was really helpful in understanding things :jI wish I could do offset like you, sounds like a dream! Need to research this more.

I've done some research after reading your comment, and this is my current plan:

Current remortgage plan:
- Staying with current provider to cancel fees (plus they're really decent rates).
- 1.69% fixed for 2 years. (this could obviously change between now and November).
- Reducing term to 7 years, so my monthly mortgage payment will be roughly £600-£675 (different sites tell me different things). This gets me somewhat out of the trap of 10% OPs, as I don't think I'll be able to make more than £100 OP pm if my monthly payment is that high. (My current monthly payment is £270).
- Only worry is what if my job situation changes... But OPs allow me to underpay my mortgage in future with no penalties if I get into trouble. Also, I've budgeted paying £150-£200 into my ISA during 2016, in order to build that back up as an emergency fund, so that could count as my fall back...

Thoughts anyone? I'm still a pup in the MSE world and constantly learning from my mistakes/misjudgments.

Hope you're all well and enjoying this beautiful summer weather. Time for me to stop procrastinating and return to work

SJ x
p.s. I did finish my essay in the end :beer:!

StrawberryJam132

On second thoughts...
- What if I decrease my term to 9 years so my regular payment will be £500-ish? Instead of 7 years at £650ish?
- It's exactly the same fixed rate (1.69%) and I'd be getting a new deal in two years anyway..
- This gives me opportunity to OP a bit more, but I have the security of a job change, which is quite likely as I need more career experience... The pay wouldn't be too great either...
- But then will I pay more in interest over the two years... Hmm

bexster1975

Hurrah on essay finishing!! :beer:

The quandary you describe is a common one. Honestly, whilst interest rates are so low, if you fix at a low rate I would go for 9 years. You can save the difference whilst you don't need it and if you get a regular saver account you could get 6% interest on some of your savings ( first direct). I think emergency money is important, and you don't want to be stuck in a job because you need all the money.

We are all learning all the time- or should be. You are way ahead of the curve generally, and especially as you are very young. You are setting great foundations for the future

I think that calls for another beer :beer:

Bexster

juststuff123

Hi StrawberryJam

I agree with Bexster - don't over stretch yourself, if you are only able to OP by £100 or so and something happens you won't have built enough extra into your mortgage pot to cover you for long if you need to take a payment holiday. And that extra cash can go in to a savings account instead used to OP at a later date or for any such emergency that comes your way. I like to keep my options open! I'm happy to build up savings to match my mortgage and leave the decision of paying it off until a later date when it may or may not be my best option. Rule of thumb - put you money where the interest is higher. You should be able to find current accounts and regular savers offering a better deal than 1.69% - putting your money there will make it work harder for you.

Well done on paying off £6000 of debt in 6 months that sound very MSE to me. And if you can keep that up for the next 6 months you'll be well on your way to hitting your target!

I'm sure I change the name of my Diary when I first Joined, for the life of me I can't remember how I did it! If I remember I'll let you know.