Get a grip woman!

Karmacat

So you're doing really, really well! Interesting factors below:

Suffolk_lass wrote: »

The factors I must consider in deciding this are:

We are still trying to sell our house
Is there anything else you can do to give it an edge in the market when it comes back to life next month?
We are still trying to buy a derelict that will need lots of ready cash
Which is the answer, sort of, to your question second down from here, about holding cash where it can be accessed? Some of it, anyway.
What shall we do with our second house that we own with our Son?
Thats a big question Your preferences? Is it an easy house to rent out? Or does Son live in it?
Should I pay down the mortgage as originally planned, or hold it in an account where I can draw down if needed, and if the latter, what sort?
See "derelict house" above

I still plan to retire within two years and I don't want to change plans after that too much

Plans sometimes *have* to change, but I can absolutely understand wanting to get a bit of forward planning certainty. You're certainly doing really well in setting yourselves up for a good future.

Suffolk_lass

boxofpaws wrote: »

Welcome back!


I want to give you some really good and insightful advice like you did to me but I just dont have a clue. No one would EVER want to take financial advice from me besides.


I feel like i dont even know your overall plan. Why have savings and debt? Are you already making the maximum overpayments on your mortgage?


I think spring is the best time to sell houses - so people can be in in time for the new school year.

Thanks Paws, I'm not sure my advice is really good but I try to focus on the logical things that minimise giving my money away. That is at least a bit of why we have savings and debts. I am earning more in broad interest and value, than I am spending on the debts.

Way back when, before the 2007 crisis, we each had an MBNA card that offered a fee-free interest free cash advance. We had £27k limit on the two cards and maxed them out for the 12 months, making only the minimum payments, and placed the lump sum in an interest-bearing account that paid household bills. My husband was in precarious contracts and this really helped us out - I guess that is where the idea came from. At the end of the interest free period, we paid them off and I closed my card, expecting another offer. Then sub-prime mortgages happened.

We only pay 0.74% on the mortgage and I am paying it down by overpaying - we don't actually have a limit on this because we've had the mortgage for 14 years, but with the derelict in the background, I'm reluctant to concentrate on maximising this while I still have a need for ready-cash. If we lose the derelict I will probably push on with paying down the mortgage, and just let the 0% finance run its course for the double-glazing.

You are absolutely right about not being clear on what my plans are. That is because neither are we! When my Mum had a couple of health episodes last year, and then was diagnosed with cancer, it kind of tore out my certainty with life, the universe and everything. I have been to stay several times since then and need to keep doing so (she is almost 450 miles away). She has just had the all-clear with the cancer and is recovering well from the major surgery but I guess the fact that she isn't indestructible or immortal is a penny that has dropped with all of us.

I do like to have a few "plan B" options available in life and financially. We did go through a desperate phase where I thought we might lose our house but I think we are past that. It kind of leaves you always wanting a cushion.

And you are absolutely right about selling in Spring. Unfortunately when I contacted the selling agent in March, he put me off as he had so many people supposedly interested. So it was the end of May by the time we got to see the house and everyone else had fallen by the wayside. It was another three weeks before our house went live to sell.

Suffolk_lass

Thanks Karmacat - all the right questions.

I will have a ponder. At the moment our garden looks a bit like a war-zone after three weeks away so getting that under control is one priority (otherwise it would put lots of people off).

We had a chat with our Son after we posted and I think we might consider selling that house whatever else happens. Our experience with tenants has been pretty awful, being ripped off several times, so probably would not look to rent it out. Our Son does live in it currently, but after sleeping here while we were away he has decided town-central is not where he wants to be. So we will sell it at some point. The timing depends on several things:

Whether we get the derelict - that is the big one
He needs to live somewhere - it could be there (the derelict) or we could build an annexe here, or we could still move to somewhere that has annexe potential
If he needs to move in to his new place from that house, there is a timing thing that places a different financial pressure on us (all) to have capital to develop at whatever location. His house isn't worth enough to buy the place he needs on his own. So we have agreed he will live at our property but in his own space. As a musician it is studio/practice space that makes a rural location ideal. He is really good and we have agreed we will try to give him a boost to see if his musical career takes off a bit.

enthusiasticsaver

Is the prime reason for selling your property because you want an annexe for your son to live in on his own rather than renting out a second property? I am trying to understand why you are buying a derelict property unless it is the position you like, ie rural? Where are you going to live while you are doing that up or do you not need to sell your current home to buy the derelict?

A friend of mine bought a property to do up from scratch almost three years ago and she is still living with her mum while they find the time and money to do it up. I think they lived in it for six months while waiting for planning permission but apart from that it has been uninhabitable. I cannot imagine coping with such disruption but some people thrive on this. Perhaps you do?

Maybe it would help to consider your priorities.

Is it to move to a house in a different area (with or without an annexe). Do you not like living where you are at the moment?

Is it to find somewhere for your son to live also, that does not give you the headache of a rental property?

Do you want to realise some capital to help finance your retirement?

Do you know how much you will receive from your pensions and will this be enough to cover your normal expenses.

if you do buy the derelict and sell your current house and rental will you have enough to do the building work and cover your mortgage from the capital?

Lots of questions and some depend on your son. Does he work at the moment?

What about the possibility of you moving nearer your mum or her moving nearer you?

I know the pulls of family myself and of course when you are retired you could live anywhere. Are there any other ties to your area other than your work at the moment (London?).

Suffolk_lass

enthusiasticsaver wrote: »

Is the prime reason for selling your property because you want an annexe for your son to live in on his own rather than renting out a second property? I am trying to understand why you are buying a derelict property unless it is the position you like, ie rural? Where are you going to live while you are doing that up or do you not need to sell your current home to buy the derelict?

A friend of mine bought a property to do up from scratch almost three years ago and she is still living with her mum while they find the time and money to do it up. I think they lived in it for six months while waiting for planning permission but apart from that it has been uninhabitable. I cannot imagine coping with such disruption but some people thrive on this. Perhaps you do?

Maybe it would help to consider your priorities.

Is it to move to a house in a different area (with or without an annexe). Do you not like living where you are at the moment?

Is it to find somewhere for your son to live also, that does not give you the headache of a rental property?

Do you want to realise some capital to help finance your retirement?

Do you know how much you will receive from your pensions and will this be enough to cover your normal expenses.

if you do buy the derelict and sell your current house and rental will you have enough to do the building work and cover your mortgage from the capital?

Lots of questions and some depend on your son. Does he work at the moment?

What about the possibility of you moving nearer your mum or her moving nearer you?

I know the pulls of family myself and of course when you are retired you could live anywhere. Are there any other ties to your area other than your work at the moment (London?).

Thanks for these questions enthusiasticsaver. They do really help to sort out things in my head.

The prime reason for trying to sell our current home is to be able to buy the derelict Farmhouse, which I have been watching for a number of years. It is less than five miles from our current house but it is in a fabulous location, not on or near a main road - we are near a main trunk road that is perfect for commuting, and on a B road that has got busier and busier over the almost 13 years we have lived here. Prior to this house (which we do like very much) we had done up two previous houses (work which we do enjoy). This would be our big project. It is something we have always wanted to do. We have the energy some skills and we think that if we sell both houses, we have the capital to do the work and build an annexe with the proceeds of this house and the one our Son lives in, with other savings and capital as our contingency.

In terms of retirement planning, we have three private pensions; two DB and one DC, and both expect full state pensions. We plan to draw down the DC over four years (to minimise tax) and both DB pensions have lump sums that could be used in part to either refurbish the derelict or pay off the mortgage. My husband is a teacher and plans to do a bit of supply teaching after he finishes full-time in two academic years time.

Our Son works. He is in a shift role (earlies and lates, not overnight, for which there is no premium payment). He is paid NMW. It’s not a job he wants to do but it pays the bills and there are plenty of shifts as it is in the care sector. In addition he is a sound engineer and attended two festivals in August where he did stage sound. - more lucrative but not regular. It's not enough to live on but he is good at it - both live and studio sound engineering and producing. He also plays in bands. He is currently putting together quite a big band, including percussion, horn/sax players, and keyboards in addition to the usual drum, guitar and bass. Music is his thing and his ambition (being good isn't enough). We are in a position to help.

We invited him to come in with us for the derelict farmhouse. The annexe would give him independent space to live and a practice space that won't interfere with neighbours. It was our idea.

While we were away on holiday the derelict vendors decided to re-market the house (ie they had accepted our offer that was conditional on removing it from the market, now it shows as for sale again). If we lose it to someone else, we shall probably take this one off the market. It was never going to be the most straightforward house to sell as it is thatched.

The house we and our Son own is in the centre of the neighbouring town. A great position if you want to be there. Now most of his friends drive (so does he), so being close to all the shops, clubs and bars is less crucial. There is also the noise and bustle from night-time revellers, which disturbs his sleep frequently at the weekend. So having started with a clear plan, I suspect that if we lose the derelict, we may still sell the house in town, if we can come up with alternative living accommodation and a studio option for our Son. There would be an option to remodel something here to provide living accommodation but not a practice space and studio.

Financially I know I can afford our mortgage on just my pension. It is interest only, so my monthly payments always include a capital element but don't have to. I am keeping it going so I have more options - it would let me change the end date, for instance

I don't want to move nearer my Mum. She and my Sister (and her family) are in Scotland but the rest of the family are down south. I have other family and friends I am close to down here. My Mother won't leave the house she is in, except in a box. My sister lives close to her and they are both well-established up there, with no desire to move. Our friends are important to all of us, and none want to give these up. We text every day, speak frequently and all get on well. No plans to change that.

Suffolk_lass

Sorry for the giant posts - it is helping me to get things sorted out

Suffolk_lass

We went swimming this morning - an attempt to continue the increased levels of exercise we did on holiday. It was lovely. On the way back we called in at the SM to pick up a few things (butter milk, bowl fruit, bread and crackers) - Butter - British butter. It was £1 a pack last summer. It was £1.23 today. I know this because I am sad enough to keep my receipts (!) When they calculated the CPI figures for last month did they move the decimal point one place to the left! That isn't 2.6. It's 23%

enthusiasticsaver

Thanks for the responses Suffolk lass.

My numerous questions post was not intended to be nosey. I just wondered if you had considered some of the questions I posed and obviously you have. Thinking through all scenarios always proves a useful exercise I find and as you are in a similar position to me - ie coming up to retirement, having some security is paramount.

At least your plans are flexible depending on what happens with the derelict. In view of the problems you have had with renters I definitely think selling the house in town sounds sensible.

I don't understand inflation either except it is not a flat line ie some things go up more than cpi and some go up by less. Also depends on what SM you go to. I am a big fan of LIDLs these days.

Suffolk_lass

enthusiasticsaver wrote: »

Thanks for the responses Suffolk lass.

My numerous questions post was not intended to be nosey. I just wondered if you had considered some of the questions I posed and obviously you have. Thinking through all scenarios always proves a useful exercise I find and as you are in a similar position to me - ie coming up to retirement, having some security is paramount.

At least your plans are flexible depending on what happens with the derelict. In view of the problems you have had with renters I definitely think selling the house in town sounds sensible.

I don't understand inflation either except it is not a flat line ie some things go up more than cpi and some go up by less. Also depends on what SM you go to. I am a big fan of LIDLs these days.

I didn't think you were being nosey - I thought you were checking that I had considered some of the important things for our time of life . Thank you - it is always worth being tested.

Re the butter - that was the LIDL price - we have not done a proper shop since we got back from holiday last Monday but it was £1.08 in Morries a month ago, hence my shock. Apparently not the only one; this morning's "Wake up to Money" on Radio 5Live said the price of wholesale butter has trebled in the last year. Yet milk is cheaper than some bottled water.

Suffolk_lass

Well it is just over seven months since I started this diary and lots of things have changed. Mercifully that includes my weight (although I still have an annoying couple of pounds to go until I get back to my lowest (holiday alcohol, gelato, pasta, bread and chips) - I wonder if other people feel it takes a day or three to wean yourself back to a stricter regime - I know I do. I shall just keep plodding away with that - at the moment I am seeing where it goes rather than setting some targets that from experience I know make me obsessive.

Money this month is not plentiful -

• Our small commuting car tax ran out last night so that is £115 on a Direct Debit that will go mid-month
• The insurance premium won't hit until October's direct debit for Husband's credit card (the one thing that is always a bit of a mystery for me!) - he did spend most of yesterday sorting that out and got a new policy (in his name) with Admiral for under £100 less than the LV quote (it was a multi-vehicle in my name with him named as additional driver) - still £255.36
• The first month of the holiday credit card will hit - it will be a nasty shock for my bank account but I have budgeted for it so won't need to use my agreed overdraft (and there will be more in October when the holiday spending and one of the hotels will hit)
• Repairs and service to the small commuting car were £551.66 - also on the mystery card. At least there is no balance carried forward, but I need to know if this will hit in September or October

It is our choice to travel as independent travellers rather than in any sort of all-inclusive thing. We are lucky to have that choice but it is one of the reasons we still have a mortgage less than two years from planned retirement.

More later