Mortgage free ASAP

bubblycrazy

Hi everyone :wave:

I've decided that starting a diary will help keep me on the straight and narrow and give me a place to think out loud and to remind me of my plans.

I've lived in my home since August 2014 with my DS. My current mortgage balance is approx £48270. I OP £100pm which brings my MFD to 2033 (from 2049 :eek:). Ideally I would like to be MF by the time I'm 40 (2025). My rate is 4.79% fixed for 5 years (wish I hadn't been so cautious!) so just over 2 years left.

These plans will have to wait for the moment as my income has taken a nosedive and I need to sort out my month to month spending first.
My main issue at the moment (apart from losing WTC) is that my job is term time only but with guaranteed hours out of term which are classed as overtime. My pay is annualised so the months when I have no overtime my income doesn't cover my outgoings. The months when I work out of term, I have excess income. For example this month's pay will be bigger than normal due to the hours I worked in Easter. I plan to pay off 2 months worth of council tax to cover next month too.
Fortunately I don't have any debts apart from my mortgage.

I will post a SOA when I can work out the best way to do it. Should I only put in my minimum wage and everything will show as a negative, or put in the average monthly income based on my pay last year?

I am going to start using YNAB. I used to keep a spreadsheet but my laptop broke last year and I miss my spreadsheet! I also want to track my exact spending on non essentials.

I've rambled enough for now, all advice and encouragement welcome!

DeterminedSingleMummy

Hello

My mortgage is currently 50177 and in aiming to be mortgage free 2023. Having my diary has helped me focus loads.

I would calculate your income as a monthly average (unless you think you will go into negative cash flow)

I work more hours during term time too and less hours in the holidays so am in a similar situation to you but I use an average weekly wage to calculate what I can afford.

Xxx

bubblycrazy

Hi DSM, we have very similar circumstances! My DS is 4 and will be starting school in September. I have read your diary and you're doing really well.

I have played around with the numbers today and have worked out an average monthly wage which I will use for the SOA.

bubblycrazy

Statement of Affairs and Personal Balance Sheet

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

Monthly Income Details
Monthly income after tax................ 795.8
Partners monthly income after tax....... 0
Benefits................................ 159.45
Other income............................ 0
Total monthly income.................... 955.25

Monthly Expense Details
Mortgage................................ 359.7
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 71.2
Electricity............................. 30
Gas..................................... 31
Oil..................................... 0
Water rates............................. 14.8
Telephone (land line)................... 11.5
Mobile phone............................ 15
TV Licence.............................. 0
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 65
Clothing................................ 5
Petrol/diesel........................... 117
Road tax................................ 11
Car Insurance........................... 25
Car maintenance (including MOT)......... 25
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..................... 15
Contents insurance...................... 0
Life assurance ......................... 7.89
Other insurance......................... 0
Presents (birthday, christmas etc)...... 12
Haircuts................................ 0
Entertainment........................... 86.66
Holiday................................. 20
Emergency fund.......................... 20
Shares fees............................. 6.66
Total monthly expenses.................. 949.41


Assets
Cash.................................... 3200
House value (Gross)..................... 65000
Shares and bonds........................ 0
Car(s).................................. 2500
Other assets............................ 0
Total Assets............................ 70700


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 48270....(359.7)....4.79
Total secured & HP debts...... 48270.....-.........-

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


Monthly Budget Summary
Total monthly income.................... 955.25
Expenses (including HP & secured debts). 949.41
Available for debt repayments........... 5.84
Monthly UNsecured debt repayments....... 0
Amount left after debt repayments....... 5.84

Personal Balance Sheet Summary
Total assets (things you own)........... 70,700
Total HP & Secured debt................. -48,270
Total Unsecured debt.................... -0
Net Assets.............................. 22,430

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

This is my SOA assuming my income for the year is the same as last year. My minimum monthly wage is £567.12 and I will receive this pay 6 months out of the year. The 6 months my wages are more are January (Xmas pay), April/May (depending on when Easter falls), and July, August, September and October (summer hols pay).

Until recently the variable income wasn't an issue as I always had money in my bank and was also getting some WTC. However since February the WTC has stopped and I am now noticing the difference. I am really hoping I can start to claim it again soon, and if I do the money can go straight to OP's or savings.

getmore4less

have you looked at switching, small mortgage will make it a bit harder as it needs low/no fees but is the LTV is OK and the ERC not too big there might be options(* see below).

With SOA/budgets you need to have at least a years worth of planning so average income(aim a bit low if very variable) is the way to go, you do have to watch the cash flow on the low paid periods.

As your income is predictable to manage the cashflow one option is to work on the base pay as the baseline for day to day and use the good months to cover the more discretionary stuff like holidays or just do what you are doing prepay things like the council tax to get ahead.

You also have the £100pm overpayment to manage the cashflow, you could just over pay on the good months

but then with 3200 in cash savings you have the cashflow covered as along as the budget ballances for the year.

---

* ditch the fix calc.
erc debt payment rate in 2 years

0% £48000 £360pm 4.79% £43,767
2% £48960 £360pm 3.70% £43,761
4% £49920 £360pm 2.64% £43,762

with a 75% LTV there are rates under 2% 2y fix even with a 4% ERC there should be options.

Kittenkirst

Shiny new diary! Good luck with your overpayments- I've found them massively addictive and love seeing that balance reduce

bubblycrazy

Hello readers, thanks for the welcome

getmore4less, thanks for the advice. I'm glad you mentioned switching as I had wondered if it worked out cheaper paying the ERC (which is 4%)
It is really confusing me working it out though and knowing what the best thing to do is. When you switch do they do a mortgage affordability check the same as when you first get a mortgage? Not sure if it would come back affordable. I only just scraped through by stretching the mortgage to 35 years.

I have included the £100 OP in my SOA as I like to think of it as part of the monthly bill so it always gets paid.
Yes currently I use my savings to cover shortfalls but would like to stop this and increase the savings again.

I have worked out that the bills which need to be monthly come to £651.88, then I'll just need to start putting something away each month to cover the rest. Trying to work out how much I need to put away is hurting my head though!

I've registered 2 months free for YNAB. Think it's going to take me a while to get used to it, and annoyingly I don't have enough storage on my phone to install the app. I have plenty of space on an SD card but it will only save to the phone storage :mad:

NSD yesterday and today as I went to my friends and the kids played in the paddling pool in the back garden. Far too hot for me this week!
It will also be a NSD tomorrow as I'm working 8am-midnight :eek: That's if I can stay away from the cheap staff tuck shop. Being accountable to it on here will help!

bubblycrazy

So, I've decided YNAB isn't going to work for me as it can only be used on a PC and I only use my android phone and Kindle Fire. My phone hasn't got enough memory to install the app, and my tablet says it's already installed but isn't! Reading reviews it looks like the app doesn't support all the functions anyway, so it'll be good old pen and paper.
Starting from today I'm tracking my spends in a notebook.
It's payday tomorrow :j and it will be a larger pay due to Easter hours, so I can start putting extra aside for next month.

Today wasn't a NSD as we met up with my friend and her kids and had a day out.
£2 50 for parking and £1.50 for a bottle of water :eek:
Fortunately my friend was well prepared and packed lunch for everyone so that's all I ended up spending.
Dad's this evening for tea with my brother so no cooking.

Maximum_Saving

Hello Bubblycrazy. I notice that your mortgage rate is quite high. My one is 4.09%. I looked into getting changing my mortgage two years ago however it wasn't worth it My early repayment fee would be 5% so it is similar to your 4%. I think overpaying a mortgage is addictive. It is so wonderful to see the amount going down each month. Good luck paying off your mortgage.

bubblycrazy

Thanks maximum, yes I love looking at my mortgage balance online just after a payment!
I definitely feel that 4.79% is too high, I envy all the 2%ers! It was a 5 year fix so I paid slightly more to lessen risk. :mad:

However I'm really excited as I've just dug out my original mortgage paperwork and as of 31/10/2017 my ERC goes down to 3% :j
If I can get the LTV down to 75% then switching (which would be the same as remortgaging yes?) would definitely be worth it! Let's hope the interest rates stay low until then (it could all change in June!)

I would be about £600 off 75% LTV at my current OP rate, but would just use some of my savings to get it under.
My only concern is the affordability checks. When I took out the mortgage I had an income of £1124pm and just scraped by on a 35 year mortgage. My current income is £995pm. Thoughts?

armchairexpert

Hi Bubbly! Welcome aboard. Is your monthly grocery budget really only 65 quid? That's amazing.