My Dream of Being Mortgage Free

hillside777 · 12 June 2016 at 9:59PM

This is my first post on the MFW board but have been following some threads. I posted under a different name on the DFW board a few years ago. I apologise for this very long post.

I will inform you about my situation. I took out my first mortgage in late 1989 for £39,000 which was an endowment mortgage. A couple of years into this we changed it to a repayment mortgage. We had paid off about £15,000 when we moved after about 11 years Our mortgage increased with our second home because we went from being semi-detached to detached.

Our third house increased the mortgage again and was bigger than our previous house. This house move was because I changed jobs and had to commute by bus every day and it made sense to move closer to where I worked. We stayed at the property for just over three years.

We then had to move into temporary accommodation because we moved to another part of the country and could not find a property at the time. After a few months we moved a bungalow which was smaller than our previous property and also more expensive than we sold our previous property for.

At some stage around the moving period we watched Pay off your mortgage in two years with Rene Carayol. We decided we would try to pay off our mortgage in three years and decided to start an online business selling items from home along with working full time. Unfortunately this didn't go to plan and we found ourselves in debt. I tried to pay off extra and tried to snowball but to no avail. When you can only pay the minimum amount and have nothing left to pay extra it seems hopeless. I read on the MFW board about someone consolidating their debts. DW and myself discussed about trying to remortgage and consolidate the debts into the mortgage. I know this is not a wise thing to do because you are changing the debt from unsecured to secured and also potentially paying a lot more interest over the period.

Our previous mortgage had been fixed for 5.29% for five years and we lost out in 2008 when the interest rates went down. However when the fixed term came to an end we were pleased. The rate on that mortgage was the Barclays base rate which almost mirrors the Bank of England base rate plus 1.89%, so we were paying 2.39% interest for many years. That mortgage was due to finish in 2029.

Last July I went to a whole of market mortgage broker and we looked at all my figures. They ran the figures through their system and the first two companies would not touch us, and I don't blame them. I was doubtful whether we should try a third. They tried Skipton and we were accepted. The rate is fixed for five years at 2.59% and after that we can ask to move onto another rate. Also if we do move house we can take the same mortgage with us. This mortgage is due to finish in 2027 so will finish three years earlier than the previous mortgage.

When we remortgaged the amount increased by £31,000 to include the debt and fees. We had a little left over and needed to replace some kitchen appliances which were on their last legs. We did not take any holidays with the money or waste it.

The mortgage currently stands at just under £82,900. We are paying just under £711 each month. Our of that figure approximately £180 is interest and the rest comes off the capital. So since last August we have reduced the mortgage by just over £5,000 just making normal monthly payments.

We have been running some figures on the overpayment calculator. If we could overpay by £500 each month the mortgage term would be reduced from the 11 years to 5 years and 2 months. At present we do not have any extra money.

We have two beds to pay for which are on 20 month interest free loans. We will continue to pay these until they end. There is no point overpaying when they are 0% interest. We need to replace my daughters bed at some point also.

There are some courses to pay for which are home study courses to allow us to move into a new career and work for ourselves. The outstanding ones are for DW and she hopes to make her career change early next year when she has finished training.

I paid for a course for myself and then found better courses and free courses on the internet. I am trying to get on with these courses because I dislike my job and would like to work for myself.

I have been looking into what I would need to earn to match my current salary and the amount the company puts into a pension fund for me. I have not really been ill for the last few years but would need to take that into account as well because there would be no sick pay working for myself.

I have a few ideas of what I would like to do when I work for myself. I would like to finish with the company I work for on June 30th next year and be working for myself fully. I have a countdown on my phone home screen showing how many days, hours, etc are left. I started it at 442 days and is now at 382 days. I have not studied for the last four weeks because of doing jobs around the house. I need days with 40 hours in to get everything done. :rotfl:

If our mortgage runs to the full term it will mean that we would have been paying a mortgage for 38 years. :eek: :eek: :eek:

We are currently clearing out at home and selling items on ebay and have made some money which will I will pay off DW's courses leaving just one to pay. I hope to do this tomorrow but the money has now appeared in my bank account from PayPal yet. Sky has been cancelled although we were paying £8.60 a month for one year and his has now finished

I am sorry for the long post. This is the beginning of my journey on the MFW board but has been ongoing on my blog site for a while, although I don't have much time to update it.

Thanks for reading. :T
The lights are on green and away we go. :j

try_harder · 13 June 2016 at 8:45AM

Welcome hillside777 ,you have come to the right place to help you on your journey,so much support and motivation you will soon be addicted.Good luck .

enjoyyourshoes · 13 June 2016 at 8:58AM

Have you looked into claiming any monies back on potential mis selling of the endowment mortgage.

Ensure you have enough money accruing and ring fenced to pay off the 0% deals once they come to an end.

Why overpay when your paying 2.39% (% is that what you are on now) when you can earn more in regular savings accounts and some current accounts ? Try to use these to generate pots of money that at a later date can be used to pay off chunks when mortgage rates change.