SalsaDanca's steps towards mortgage freedom

SalsaDanca

I exchanged contracts on my new home a few days before Christmas last year (2015). We're due to complete at the end of January, so at the time of writing I'm yet to move in.

In 2004 I moved out of my parents' house, and the small flat that I bought seemed like all I'd ever be able to afford. I took part in some mortgage-free wannabe challenges several years ago, and eventually paid off the mortgage, but that didn't seem like much of an achievement at the time because I found being in a leasehold flat so restrictive. No modifications without the freeholder's permission, no pets without the freeholder's permission, ground rent and service charges, arguments about the allocated parking spaces, etc.. However, a few more years of saving have finally made it possible to move into a detached house in the village where I grew up.

The mortgage I've just taken on will run until 2037, when I'll be 59. I'm planning to overpay the mortgage to reduce the monthly payments for the first few years, and then switch to reducing the term. The new mortgage allows me to overpay 10% of the original loan value per year, which is more than I'm likely to be able to overpay for the first few years.

I have other targets as well as overpaying the mortgage. I've been sticking to a strict budget, using YNAB and fiddling with spreadsheets while I saved as much as possible. The few bits of furniture I'm bringing from my flat are going to look lost in the new house, and I'm still driving the car I bought when I was living with my parents in 2004, so now that I've finally got the house I'm hoping to relax the budget and live a little while still overpaying the mortgage.

Thanks for reading. I'll post my SOA next.

SalsaDanca

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 1
Number of children in household......... 0
Number of cars owned.................... 1

Monthly Income Details
Monthly income after tax................ 2350
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 2350

Monthly Expense Details
Mortgage................................ 752
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 120
Electricity............................. 40
Gas..................................... 0
Oil..................................... 40
Water rates............................. 40
Telephone (land line)................... 25
Mobile phone............................ 5
TV Licence.............................. 12.5
Satellite/Cable TV...................... 0
Internet Services....................... 15
Groceries etc. ......................... 100
Clothing................................ 30
Petrol/diesel........................... 170
Road tax................................ 20
Car Insurance........................... 30
Car maintenance (including MOT)......... 50
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 35
Contents insurance...................... 0
Life assurance ......................... 40
Other insurance......................... 0
Presents (birthday, christmas etc)...... 35
Haircuts................................ 15
Entertainment........................... 50
Holiday................................. 0
Emergency fund.......................... 50
Total monthly expenses.................. 1674.5


Assets
Cash.................................... 0
House value (Gross)..................... 375000
Shares and bonds........................ 0
Car(s).................................. 500
Other assets............................ 0
Total Assets............................ 375500


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 140000...(752)......3.04
Total secured & HP debts...... 140000....-.........-

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


Monthly Budget Summary
Total monthly income.................... 2,350
Expenses (including HP & secured debts). 1,674.5
Available for debt repayments........... 675.5
Monthly UNsecured debt repayments....... 0
Amount left after debt repayments....... 675.5

Personal Balance Sheet Summary
Total assets (things you own)........... 375,500
Total HP & Secured debt................. -140,000
Total Unsecured debt.................... -0
Net Assets.............................. 235,500

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

This is a draft budget, so the values are nice round numbers because I'm still estimating at the moment. I've been using YNAB (YouNeedABudget.com) since January 2011, and the figures in the budget are fairly stable from month to month. I have several savings categories (new car, redecoration, furniture, replacement bathroom, etc) in YNAB that I haven't included in this SOA. I'm so used to YNAB's point of view, seeing my finances as a number of underfunded goals, that it's a bit of a shock of see my disposable income as one largish number. Maybe I'll forget about the home improvements and buy the impractical sports car I've always wanted. At least now I have a garage to keep it in.

A_Frayed_Knot

Hi, :wave: welcome and Good Luck.

you seemed to have a good plan of action. This being your second round I do believe you have skimmed back your costs to the core, so not a lot to be saved but you will know what suits you best.

You must be looking forward to moving in:) and then can get settled into o/p.:D

SalsaDanca

Yes, very excited to move in now. My offer was accepted in August, and then we had four months of bickering about buildings regulations for some modifications that had been made to the property. It was a probate sale, and the vendor kept providing misleading and incomplete information. I'm expecting the solicitor's final bill any day now, so I'll finally find out how much all their extra work has cost me.

I was extremely relieved that we exchanged contracts before Christmas - I was convinced that if it had dragged on until after Christmas, the vendor would have put the property back on the market in the new year. Similar properties that have been put on the market in the last few days are up for £400k, and I wouldn't have been comfortable borrowing that much more.

lulabelle1

Welcome!

I think you've done amazingly well, congrats. You've achieved so much already, especially with a single income. I'm actually in awe.

Clarey008

Well done, sounds like you are buying a lovely house for that value and you have a fair bit of equity.