Mortgage day one - Diary to MF

NelliePie

Hi All,

Like many in the past I've been a 'reader' - reading all of your useful tips and advice and other people stories as inspiration. But now feel like I have my own small story to tell and hopefully get a bit more advice and encouragement from you wonderful bunch! Even if no one reads this or comments I'll be filling t in to monitor our progress.

This month my fiance and I complete on our first house with a 90% LTV mortgage at 2.53% 2yr fixed from the post office owing £144000. I cannot sing the praises of L&C enough, through every step of the way they were brilliant - professional and personable (even with my million FTB questions!) It's taken us about a year and a half to save £20000 - which is now mostly gone on deposit, legal fees etc

It has taken my partner and I a while to save the deposit and we've made the most of the HTB ISA scheme both with over £4500 when we closed them earlier this month. So that's almost £2k free cash We each saved the maximum £200 per month into the ISA's and put whatever we had left into a savings account. Our plan is to continue to save in this way but use what was the £200 each ISA money as OP on the mortgage each month. The other savings account will go towards our wedding fund.

If we didn't overpay we'd drop to just over 85% LTV when it comes to remortgaging in 2 years but overpaying by £310 per month should get us down to 80% LTV. This should hopefully get us a better deal.

If any of you have any tips or advice for mortgage/OP newbies they'd be greatly appreciated! Thanks in advance!

June 2017 £144k

Dogbooks

Congratulations to you! Hope all goes well, please keep us posted of how you get on

Westminster

Well done!

erin_transport

Great plan
Best wishes with it

NelliePie

Has anyone else had ideas of what to do with the money they were putting saving towards help to buy ISA's? I cant find a savings account that'd we'd be better off saving in.

Guna

I don't think there is anything available at the moment that would match an interest rate of HTB ISA. Perhaps a regular ISA? I found that just putting money away into a different account helps me to mentally distance myself from it so that it is never really touched except in an absolute emergency. If your mortgage terms allow overpayment without penalties, you may as well just pay it off without worrying about savings. The amount of interest saved would exceed any interest you may have earned elsewhere.
I realise you are trying to save up for a wedding, but if it is a distant event, it still feels like a better option to reduce your mortgage capital.

NelliePie

Thanks Guna. I thought so too but it's nice to ghet it confirmed by other more savvy members. We're lucky we're both earning and in decently paid jobs so we can afford to save a little more than that a month so can put the extra towards the wedding (May 2018!)

NelliePie

As a FTB its a strange feeling knowing all our savings that we scrimped together have gone and we now owe almost ten times as much! Kind of feels like we're back to square one but with lots more out goings as we tidy up the house. There's nothing major that needs doing just a bit of tarting up really. I'm trying to convince myself that now we've completed level 1 - the deposit stage; the mortgage stage is juts the next challenge/level in the game etc. It's a bit daunting though!

NelliePie

SOA
Household Information
Number of adults in household........... 2
Number of children in household......... 0
Number of cars owned.................... 2

Monthly Income Details
Monthly income after tax................ 1400
Partners monthly income after tax....... 1350
Total monthly income.................... 2750

Monthly Expense Details
Mortgage................................ 648.1
Council tax............................. 115
Electricity............................. 30
Gas..................................... 30
Water rates............................. 5.69
Telephone, broadband and TV................... 42
Mobile phones............................ 23.5
TV Licence.............................. 12.13
Groceries etc. ......................... 100
Petrol/diesel........................... 40
Road tax................................ 16.67
Car Insurance........................... 110
Medical (prescriptions, dentist etc).... 13
Buildings & contents insurance..................... 12
Life assurance ......................... 9.53
Total monthly expenses.................. 1215.62

Created using the SOA calculator at stoozing. Reproduced on Moneysavingexpert with permission, using other browser.

We're both fairly frugal so don't spend much on clothes, fancy cars, etc so but we do treat ourselves to dinners out every now and then. We're not hardcore savers it just comes naturally for us to not spend much - we both like the simple things in life. However after reading everyone else's diary's it's huge inspiration to start overpaying when we can.

NelliePie

Our mortgage came with £500 cashback on completion, that's just cleared so has gone in as the first over-payment! I know its only a one off but it feels good to be making a start

shangaijimmy

The fact you have this mindsight is your biggest asset. I have monthly goals on my first post which helps for motivation and is great to look back on. Its hsrd now but try to imagine your potential scenarios for remortgage and i guarantee that with this diary youll surpass them! In our first few months a picture on the fridge with 136 bricks was a great motivator and it felt good to colour one in and reward ourselves with a takeaway and wine!