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Putting my big girl pants on.
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Flyingpig
Posts: 55 Forumite
I will start at the beginning...
5 years ago my Husband's Mum died, followed by his Gran 3 months later. At the time we were heavily in debt with bailiffs chasing us for all sorts, had rent arrears in excess of £1500 for our housing association flat, and were struggling massively. My husband had been wrongfully dismissed from his job (proven at tribunal but a story for another time!). We couldn't sleep through stress, couldn't afford to eat, had sold as many of our possessions as we could live with out. We were up s**t street without a paddle.
As devastating as it was losing my mother & grandmother in law, we found out that we had been left the most incredible gift. The grandmother had left her house to her only daughter, my husband's Mum and in the event that she outlived her daughter it would be sold and split between her 3 children. After paying all of the bills due to the estate and selling the house we ended up with £63,000 each, but the house took a year to sell and go through.
We decided to try our absolute best to 'set ourselves up for life', and buy a house. In order to do that we had to do some serious work on our finances.
1. We needed an income
2. We needed an income big enough to get a mortgage on.
3. We needed to clear as much of our debt as possible.
Our 2 children were too young for me to return to work so my husband took a badly paid zero hour job and worked his backside off. He was made permanent after 3 months. We could finally breath! First box ticked.
We meal planned, we didnt do anything 'fun' in a year. We didnt buy anything we didnt need. If the kids needed clothes or shoes we brought them 2nd hand. We sold our car and walked EVERYWHERE. Despite my husband only earning 12k a year, and our minimal tax credits etc we managed to pay off £9,500 in a year. Second box ticked. An unexpected side effect of myself walking everywhere was that I lost a lot of weight and unexpectedly fell pregnant with baby number 3 :eek: :eek:
We checked our credit reports and they were at around 600 each, not great but hopefully something we could work with. So we booked to see a countrywide mortgage advisor, who laughed at us. Very disheartened we booked to see an independant on the advise of a friend and walked out with an AIP which meant we could buy a house up to 111,000 if we put the full £63,000 down.
We viewed 50+ houses putting the odd cheeky offer in here and there but nothing. Then a 3 bed repo appeared up for 120k in a bad way. We viewed it and put an offer in of 100k. There was some tooing a froing and they accepted an offer of 108,500. WE WERE GOING TO BUY A HOUSE!
The next hurdle. Our mortgage with our obscure lender was declined because it was concrete construction. :mad: :mad:
We reapplied with Halifax only for it to be accepted in less than a week.
We completed 2 weeks before I had our 3rd baby.
We gutted the house, spent around 10k doing it up ourselves and fast forward 3 years, a wage increase for my husband and some careful saving. We put the house on the market to move to our dream 4 bed (also a do-er-upper).The house has sold for 158,500 and the new one is 167,500. Its all plodding through and we are hoping to finally complete at the send of July.
Now getting to the point. And this is where Im putting my big girl pants on. In the grand scheme of things we have a small mortgage with Natwest of 83,750 (1.43% fixed for 2 yrs) but due to affordability it is over 35yrs. The repayments at £256 a month.
In a nutshell we want to be mortgage free by the time we are 40. That is 12 years time.
If interest rates stay the same (we know they wont but will cross that bridge when we come to it I guess!) we will need to over pay our mortgage by £400 a month or 4,800 a year. Natwest will only let us over pay 10%.
So, is it better to over pay by 10% and add in the rest of the savings or save all of it and take the saving off at each remortgage. Or is there a better way?
If you got to the end of that *cheers* :beer:
5 years ago my Husband's Mum died, followed by his Gran 3 months later. At the time we were heavily in debt with bailiffs chasing us for all sorts, had rent arrears in excess of £1500 for our housing association flat, and were struggling massively. My husband had been wrongfully dismissed from his job (proven at tribunal but a story for another time!). We couldn't sleep through stress, couldn't afford to eat, had sold as many of our possessions as we could live with out. We were up s**t street without a paddle.
As devastating as it was losing my mother & grandmother in law, we found out that we had been left the most incredible gift. The grandmother had left her house to her only daughter, my husband's Mum and in the event that she outlived her daughter it would be sold and split between her 3 children. After paying all of the bills due to the estate and selling the house we ended up with £63,000 each, but the house took a year to sell and go through.
We decided to try our absolute best to 'set ourselves up for life', and buy a house. In order to do that we had to do some serious work on our finances.
1. We needed an income
2. We needed an income big enough to get a mortgage on.
3. We needed to clear as much of our debt as possible.
Our 2 children were too young for me to return to work so my husband took a badly paid zero hour job and worked his backside off. He was made permanent after 3 months. We could finally breath! First box ticked.
We meal planned, we didnt do anything 'fun' in a year. We didnt buy anything we didnt need. If the kids needed clothes or shoes we brought them 2nd hand. We sold our car and walked EVERYWHERE. Despite my husband only earning 12k a year, and our minimal tax credits etc we managed to pay off £9,500 in a year. Second box ticked. An unexpected side effect of myself walking everywhere was that I lost a lot of weight and unexpectedly fell pregnant with baby number 3 :eek: :eek:
We checked our credit reports and they were at around 600 each, not great but hopefully something we could work with. So we booked to see a countrywide mortgage advisor, who laughed at us. Very disheartened we booked to see an independant on the advise of a friend and walked out with an AIP which meant we could buy a house up to 111,000 if we put the full £63,000 down.
We viewed 50+ houses putting the odd cheeky offer in here and there but nothing. Then a 3 bed repo appeared up for 120k in a bad way. We viewed it and put an offer in of 100k. There was some tooing a froing and they accepted an offer of 108,500. WE WERE GOING TO BUY A HOUSE!
The next hurdle. Our mortgage with our obscure lender was declined because it was concrete construction. :mad: :mad:
We reapplied with Halifax only for it to be accepted in less than a week.
We completed 2 weeks before I had our 3rd baby.
We gutted the house, spent around 10k doing it up ourselves and fast forward 3 years, a wage increase for my husband and some careful saving. We put the house on the market to move to our dream 4 bed (also a do-er-upper).The house has sold for 158,500 and the new one is 167,500. Its all plodding through and we are hoping to finally complete at the send of July.
Now getting to the point. And this is where Im putting my big girl pants on. In the grand scheme of things we have a small mortgage with Natwest of 83,750 (1.43% fixed for 2 yrs) but due to affordability it is over 35yrs. The repayments at £256 a month.
In a nutshell we want to be mortgage free by the time we are 40. That is 12 years time.
If interest rates stay the same (we know they wont but will cross that bridge when we come to it I guess!) we will need to over pay our mortgage by £400 a month or 4,800 a year. Natwest will only let us over pay 10%.
So, is it better to over pay by 10% and add in the rest of the savings or save all of it and take the saving off at each remortgage. Or is there a better way?
If you got to the end of that *cheers* :beer:
0
Comments
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Wowsers - thats an inspirational tale, am quite exhausted reading it!
Good luck and look forward to reading your future diary entries.0 -
Wowsers - thats an inspirational tale, am quite exhausted reading it!
Good luck and look forward to reading your future diary entries.
Well done for getting through my waffle! I was quite surprised at how much it upset me actually writing it all out. Really brought it home to me how far we have actually come. 5 yrs ago no way would I have ever thought we would be in this position!:T0 -
Amazing story. I bet your GMIL would have been delighted that you put her legacy to such good use. You've really turned your lives around.MortgageStart Nov 2012 £310,000
Oct 2022 £143,277.74
Reduction £166,722.26
OriginalEnd Sept 2034 / Current official end Apr 2032 (but I have a cunning plan...)
2022 MFW #78 £10200/£12000
MFiT-6 #28 £21,772 /£750000 -
Hello Flyingpig!
Wow - what a few years you have had! :T
The others are right: your story really *is* an inspiration!
It just goes to show what can be done with vision and determination!
About your mortgage: what if you opened a high interest savings account (5% is easy to get at the minute) and saved up as much as you can then dump it off your mortgage just before the end of the year so you get the maximum amount of interest on the savings and still pay towards the annual 10% OP?
That might not be the best way to approach it in the future if your mortgage interest rate increases or you can't get a savings account with that high interest but for now it looks like an efficient option for you.
Best of luck! :TDebt: £11,640.02 paid in full! DFD: 30/06/20
Starter Emergency Fund (#187): £1000/£1000
3 month Emergency Fund (#45): £3300/£33000 -
That's an inspirational story - well done to both of you!
The 10% overpayment is probably a percentage of capital per year isn't it? So you'll be able to meet your overpayment targets for quite a while without going over.0 -
Wow that is amazing ,well done and welcome to the group.0
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Welcome flying pig!
Regarding overpaying the economists will say put the money wherever the higher interest is, if your mortgage is higher than your savings pay off that.
However I like the feeling of paying off the mortgage and the security of knowing I can't spend that money once I have handed it over (Unlike if it was in a savings account) so personally if its similar figures I would pay the mortgage off.
Good luck with your progress!
Mortgage free - 01/05/2019, mortgage high £200k 20110 -
I would tend to agree with Positive Balance. You are likely to be able to get more interest on your saving in high interest accounts than you are paying on your mortgage. So I would save up the OP in high interest accounts and do an annual payment of the mortgage.
If you and your DH are basic rate tax payers you can each earn £1000 pa of interest income tax free without having to use an ISA.MortgageStart Nov 2012 £310,000
Oct 2022 £143,277.74
Reduction £166,722.26
OriginalEnd Sept 2034 / Current official end Apr 2032 (but I have a cunning plan...)
2022 MFW #78 £10200/£12000
MFiT-6 #28 £21,772 /£750000
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