My Mortgage Free Baby Steps

almost

I've had a tricky time over the past decade, and although I know I am very lucky to have got on the property ladder with my little flat and on my own, I find it a bit scary and also frustrating because I would really like to move somewhere bigger in a quieter place. I'd really like to have a house where I can make a home and settle down with my boyfriend... so, I'd like to reduce my mortgage so I can be in a better place when I come to sell.

Money is so easy to spend, I want to overpay what I can as often as possible so I don't waste it. I'm taking baby steps, but I want to find ways to save money, make money and invest more into my mortgage and savings to make my future easier. With the sad Brexit news today, I feel I must stop wasting time and get on with it. So, today I have checked with my mortgage provider Leeds Building Soc. and have upped my monthly payments by £100 - which will pay off the capitol balance. Using the MSE overpayments calculator this will reduce my mortgage term by just over 8 years!!! I took out a 35 year mortgage after getting some financial advice and I do worry it was too long... but I know it was the right decision when I made it. When I can I will overpay with lump sums too.

I'm still doing some working out of how I can make more savings, and perhaps overpay by £200 a month (or put more into savings). I will post here when I have my first set of figures, but I wanted to start my diary now that I have taken the first baby step!! :beer:

EatingTheElephant

A shiny new diary! Welcome and good luck with your plans

almost

Been working on my figures, and here is the current overview:

Current mortgage balance: £143,000 (Leeds Building Society - rounded to nearest £500 this morning).
Interest rate: 2.890%
Term: 35 years (34 years left)
Current monthly payment: £545.21
New monthly overpayment £645.21

According the the MSE calculator: "Overpaying would save you £22,227 in interest alone,
and mean you pay the debt off in full 8 years & 4 months earlier."

I'm a bit torn about how much to overpay in a lump sum, or if I should keep my savings pot easily accessible as that is my emergency fund. I have to get some work done to the flat too - am going to try and sell things and make extra money to avoid just spending savings on it as that pot is getting smaller and smaller recently.

beanielou

Happy shiny new dairy.
Baby steps are just great.

User1489

Hello Almost - "Man vs Mortgage" here I'm called that because it's me - 1 man - versus the mortgage, which started at £185k...!

I think we're in a fairly similar situ. Only my name on the mortgage and first flat etc. For the first few years it's bipolar extremes - YES I own my own place and WHAT HAPPENS IF SOMETHING GOES WRONG!?

Personally, I have £2k in a 5% savings account and £600 in Premium Bonds. My mortgage is about £800, so if i lost my job on Monday I can independently keep a roof over my head before grovelling to the parents or bank.

I choose (and it is a choice - I battled with spending cash on living versus spending cash on financial security) to overpay £1k per month and live off as little as possible while keeping a certain level of quality of life. This has meant for me:
1) If I stick to that plan, mortgage paid in 7 years 10 months (and counting)
2) If I fall on hardship, I have reduced as much as I could whilst I could and that will make life later on easier

Why did I tell you those two things? Because I'm risk averse and my aim is to make later life easier.

I feel like i've rambled now, but the spirit of my message is you're not alone, you can do it, and I wish you great LUCK!

MvM

cookie9

Nothing wrong with taking baby steps to be MF. Check you have the best deals for energy, phone etc. If you can get a better deal than your current one put the money saved towards OP or your emergency funds. As you are used to not having this money you won't miss it.

Lots of people have different views on how much emergency funds you should have. Three months salary is useful to cover things going wrong.

Good luck on your MFW journey.

TallGirl

Hi Almost nice to have a new diary to read emergency funds are useful but so are credit cards as long as you can pay them off or get cheap balance transfer. I did have an offset mortgage so it wasn't really an issue doe me.

I paid my mortgage off 9 years early mainly through getting a better job a small bit of inheritance but mainly from MFi3 on here which was just so motivating. Everything suddenly became shall I buy it or should or put it on the mortgage.

It becomes a mindset to save and getting the best deal is just part of loving :money: and MSE.

You've taken a great first step and you'll see how it goes even if it is just small steps it doesn't matter.

almost

Thank you for all your encouraging messages! It really makes a difference!

I am in a good position as I have about £7k in savings at the moment which is my emergency fund. Aside from my mortgage and student loan I don't owe any money. I've realised I have wasted a lot of money though over the past few years and I havent really noticed I was doing it. I'm stopping while I am still in an OK position but I need to re-train myself!

I could probably afford to overpay more, and this month I am going to monitor my spending much more closely. I'm in the process of opening a new bank account (yes I did one with cashback!) that I can put a 'spending allowance' in so I stop using my main bank account. The new account will have no overdraft so If I spend my allowance I cant keep going!

This week I am going to dedicate time to listing lots of things on eBay to both clear space, and make some more overpayment money! For once I am quite enjoying sorting out my finances - now I have decided on a goal (overpaying and saving) I have something to work towards :j

ZoPig2016

Hi Almost,

Good luck. Like you, I feel most of my issue is wasting money on random stuff. I find the website and diaries v encouraging to help me break this habit, hope you do too!

May help to put your budget up here as often a fresh pair of eyes can spot expensive items and steer you to find a cheaper way.

Best of luck x

almost

How much do you budget for going out? Just spent nearly £11 going for two drinks after work... seems so much more expensive now I'm thinking of making overpayments!

ZoPig2016

I don't tend to be one for nights out but we do like lunch out on Saturday so I budget 100 quid. It depends on what you do I suppose and how regularly? I tried having a treat account fir a bit to give myself spends.