Endorphins make you happy...and so does paying off the mortgage

iamsalt

Hello

With apologies to one of my favourite films, I want to take the plunge in paying off a mortgage which I don't actually have yet.

Let me explain. We are exchanging on a house which I have watched slowly fall into disrepair, but still loved, which needs everything doing to it, and building a home for my mum on the plot which was part of the garden. With the sale of our homes and a family loan we should be able to get the house renovated and the home for mum built. I will then take out a mortgage to pay back the family.

However, I want to be able to reduce my hours at work, maybe start a family but generally enjoy the opportunity that all the stars aligning have put in place. So I want to get cracking on saving and looking for opportunities to reduce the mortgage and make overpayments once it is up and running. I estimate that the mortgage will be about £170000 at the end of the process, (25% LTV) which frightens the life out of me, as currently it will be all down to me. I know the LTV will make it easier but it's still daunting

OH is on board, not to the same degree as me but can see the benefits of trying to shrink the mortgage before we have it! He will also contribute by helping to project manage everything. We want to take on the non skilled work, and help where we can to reduce costs.

Thank you for reading this far
X

Kittenkirst

Best of luck for your fabulous plans

iamsalt

Thanks kitten kirst.

Managed to rustle up some bits and bobs to try to sell to put funds into the renovation project, so they are now online with a couple of bids.it also means less to move!

Tomorrow I should see the first payslip with my new salary. Some changes happened so I wasn't sure how much I would be getting. That will allow me to plan a bit more. I have always put money into savings on payday from my first payslip 20 odd years ago, even if it was a pound when things were really tight, as I wanted to make sure I had a bit of a backup plan!

Over the next week or so I shall work out what will go on bills etc and whether any extra can be saved now.

greent

Look forward to following your adventures
x

iamsalt

Thanks Greent.

Pay day today and the first time that a pay rise has been paid. I have allocated a separate savings account - I have many already for things like pet "insurance " and holidays, so I have named one mortgage savings, and that has already got the pay rise, and a refund from my lovely energy company in. So £210! Yay.

I want to try to keep it separate from the general moving expenses for now as I find that more motivating, and most of those are coming from savings I had already, and I think that there is a risk of spending it on stuff we don't actually need for the new house, just because it's there.

I have already built in 2 contingency pots into the work so I am hoping that these savings will be a lump sum to reduce the need to borrow, and at the moment I don't have any debts so I can prioritise in this way.

FloppyDisk

Hello Salt, all those pots... I can only assume you are also a spreadsheet geek too??

atush

Sounds great.

AS long as you dont neglect your pension.

iamsalt

Hello, yes I have a number of spreadsheets! They don't do anything fancy but as I learn more about what you can do with them I add to them.

I have been paying into pensions since I was 18. At the time I had no idea what a pension was but I said yes because it sounded sensible, so I have 21 years of contributions already, and have potentially 27 more years until the official retirement age. I inherited a little money a few years ago and made an additional lump sum payment, but it is a sensible reminder to make sure that I know what is likely to be there, and also look for opportunities to retire earlier. My OH is 10 years older so I would hate to work full time while he is retired!

Mrs_Money_Penny

Hi Iamsalt Found your diary where are you in regards to the house move ? When are you likely to exchange? Looking forward to joining you on your journey.

iamsalt

Thanks Mrs Money Penny.

So it has all taken far far longer than we had hoped.
We moved mum into temporary accommodation as planned in August, that move in its self was pretty traumatic as the full extent of her hoarding and how ruined a lot of stuff was only came to light as we were loading the van! So 2.8tons of waste to the tip, 3 storage containers and 4 van loads of garden stuff to a friend's farm left us a little shell shocked.
It was swiftly followed by the news at the person at the start of the chain for our place had left it until 4 days before we were due to move (one week after mum)
to reveal they didn't have a mortgage offer after all. Eeek!

So less than 6weeks later, much negotiating with estate agents and an amazing financial adviser, I now have a mortgage in place, we are exchanging on the place we are buying Monday, completing the following Monday. We are exchanging on our house Monday as well and that will complete at the end of the month.

We chose to take the short term hit of the stamp duty for peace of mind that the house is ours (cue even more financial juggling), oh and the mortgage will be 175000 to begin with, as the building society retained 25000 until initial works are done. My first ambition is to not need the extra £25k! We have a 2year fix at 1.19% so I will make token overpayments and cycle money through regular savers before making lump sum payments.
In 2 years, I hope OH will be working again and the building works done, so we should be able to crack through the mortgage then.

iamsalt

Well this morning I have transferred the last of my house savings to the solicitor ready for completion.
I have a little savings pot for emergencies left which I will want to grow a bit for peace of mind, and I also have a number of moving expenses on the credit card I want to clear ASAP so those will be an initial priority. I think I will use the stamp duty refund to clear them, and then save the money back up out of income.
Once we are through this initial hiatus I will sit down with the bills and work out what money can go where.

It's starting to happen....