FinancialBliss: My mortgage free journey…

financialbliss

Two recent letters perhaps worth a mention.

Age concern. I got a letter at the start of the week from age concern energy, touting I switch to them to save energy. There was no specific age criteria in the letter, and as I type this, I’ve just checked their web site and there appears to be no minimum joining age, but as they’re an 0800 number, I may telephone them to ask them to kindly remove me from their mailing list.

Nationwide. I normally get an annual mortgage statement about this time of year from Nationwide. As you may expect, I’ve got my finger on the pulse here, so no great surprises. Three comments however.

• redemption admin fee – this is 90 quid if you clear mortgage, however the fee is waived if you’ve got 10 years or less left. As I’ve just upped my monthly payment, effectively reducing term to less than 10 years, I should get around this.

• Overpayment reserve. The overpayments I’ve made stand at a very respectable 16,227.34 – didn’t think it was quite that much. While I could take up to 12 months payment holiday using this reserve, I’m happy for this to stay in place, reducing interest charged, a kind of offset I guess – just a little harder to get back.

• Interest. The interest for the year is simply shown as a single figure of 3,427.29. As I’m hoping to make big inroads into the mortgage this year, I’m interested (sorry) to see how the interest charged alters, so I’m going to have an attempt at tracking this monthly. I’ll try and report at the end of each month when I do an update.

FB.

financialbliss

Very quick post this evening! My last car loan payment was taken today :j

This means we’re 515.28 a month better off. No prizes to where this cash is going to be diverted then?

So, from February, that’s 1,250 a month to the mortgage. Fingers crossed I’ve got my sums right.

FB.

taxi73

Firstly what a great thread...very interesting ..thankyou...
secondly well done for paying your last car payment and now you can really crack on ..what great news.you must be so pleased.

financialbliss

taxi73 wrote: »

Firstly what a great thread...very interesting ..thankyou...
secondly well done for paying your last car payment and now you can really crack on ..what great news.you must be so pleased.

Hi taxi73 - thanks very much for your comments.

Yes, I'm quite pleased about the car loan. That said, the car will be 3 years old later this year - 05 plate - first MOT, but I'm hoping that if we can look after it, it can see us until the end of the challenge. It's a diesel with about 21,000 miles on it, so quite low for it's age and not that much for a diesel.

As for debts, since we pay our credit cards off in full each month, the only debt we now have is the mortgage.

Thanks,
FB.

LouiseJ

We have two cars at the moment (an unfortunate necessity). Our oldest car is 7 years old and has some type of electrical problem as the radio keeps coming on when there is no key in the ignition (a bit like Stephen King's Christine) and drains the battery so OH has to disconnect it every night.

He was wondering if we should just bite the bullet and buy a new car but my argument is that even if it costs £500 to fix it is still cheaper than replacing it! It only does 10 x 7 miles journeys a week (to get OH to work & back).

He has toyed with the idea of a motorbike but they are awful in the winter and I think they are dangerous.

taxi73

I will soon be joining you in your becoming mortgage free in 3 years challenge.I have just been accepted for the Abbey flexi plus mortgage that allows overpayments and offsetting.My currrent ERC of £1900 stands until 31st march. I have had the offer and sent the mortgage deed back to the solicitors who is holding off until 1st April so not a lot I can do at the moment.
I worry about coming on here and gettting slated by people for not waiting until I'm debt free but there are reasons such as:
My CCs are 0% but I will have paid Egg off by that time.My 3 loans are all about 6% interest and run until 2011...so doesn't seem to be any point in paying the loans off early or consolidating them.I could if I push it pay the halifax one off before the mortgage starts but would be better just paying the minimum on DD and putting the rest in the offset bit.
I am S/E so put £100 p/w away for my tax bill and £65 p/w for our holidays just into our websaver plus theres also other money left over in the account.
I would like your advice please if possible am I looking at it the right way..
My new mortgage £525 p/m and I only owe £47,400 ...I have reduced the term this time from 18 years to 10 years if I overpay £1k per month I can get rid in under 3 years so the loans and mortgage will all be finished by 2011.One of the loans is y taxi loan so I claim the interest back on that.I thought I could pay the card off before or just pay min through my bank and put the £1k I would.ve overpaid on the CC into the mortgage offset settling it in november and obviously my tax savings will be sat there ...I can possibly pay 2k into the overpayments some months..
Quite confused by this the only money I would then ever have to take out is my tax bill...holiday money if needed and that one CC...the everything else will stay there..have I got the right idea...with Abbey it's not linked to your current account ...when you overpay as much as you like it goes direct into your offset unless you ask otherwise but I get the idea if you ask otherwise all that does is make your monthly repayment smaller not your term shorter..so don't know if I've totally understood this.
I would appreciate your advice as you seem to know what you are doing...thanks

financialbliss

Hi taxi73,

My strategy towards savings are as follows. We have two Lloyds TSB monthly savers @ 8% which pans out to 8% for mrs bliss and 6.4% for me as I get taxed. These are fed from our icesave account @ 6.3% held by mrs bliss (no tax) and when I get paid this is fed into the nationwide e-savings @ 5.55% again held by mrs bliss so no tax and emptied as spending required / bills need paying.

I know everyone says use your ISA allowances, but as mrs bliss isn’t currently earning, all her savings allowance is tax free – we’re trying to make best use of the rates and we can get better than ISA rates by using mrs bliss. Exactly if this is allowed, I’m not 100% sure, but I can't be the only person who does this? Should my savings go into my accounts and be taxed? Anyone?

As paying off the mortgage is my primary goal, once I’ve done this we’ll be able to build up our ISA allowances again.


As for your scenario, it’s pretty much the same as mine, except you’re looking to minimise the rates instead of maximise them. Instead of me trying to minimise what I’ve got in the lower rate savings, you’d want to clear the higher rate debt first.

Can’t see your mortgage rate, but looking on another thread, I think this may be 5.99 + 0.49, ie 6.48%. So, it your loans are about the 6% mark and your mortgage is 6.48%, then yes, it probably would make sense to clear mortgage first.

I’m sure if you posted details in a new thread, you’d get plenty of replies, as there is many knowledgeable people here.

Thanks,
FB.

taxi73

Thanks for answering that..a good accountant would tell you to use Mrs Bliss as a saving vehicle first as she doesn't pay tax.My mortgage rate is 5.99% total. It was mainly how to use the account that was bothering me..There are loads of people on here with the one account and doesn't seem to be many that are on Abbey.
Mortgage and loans are near enough the same rate and I'm sure that nothing is gained by paying them off in full.One is for my taxi so I actually claim the interest back on tax for that one.
Both CCs 0%....Think I will start my own thread on here as soon as I get up and running ..thanks for your input..but will still follow yours as well as its very interesting.

financialbliss

Quick round up this evening…

Text spam. Some financial institution somewhere must have my mobile number and they’ve passed / sold it on to yes loans uk. At the weekend I got a text message from yes loans suggesting I contact them for a loan. After a check of their web site, I’ve e-mailed them to ask for my details to be removed, but I couldn’t help notice their typical APR of 48%. :eek:

Monthly savers. Took the decision today not to force the finances, but to “slow” the feeding into the monthly savers. I need to put in between 25.00 and 250.00 per month into each monthly saver. Basically, I could continue to feed both monthly savers at a rate of 250.00 per month from other savings until May or June, but that would leave all our other savings accounts empty and no savings at all to draw on bar the monthly savers, which I'd have to close.

Last year saw some high unexpected spending, eg fridge freezer packed in, plus we were pretty much forced to “swap” the car for another after we discovered it was in a shunt, with a 1,250.00 payment to make up the difference. I’m keen to have a little remaining buffer until October when these monthly savers close.

So, as I’m taxed on my savings, I’ve just logged into Lloyds-TSB to drop my standing order to the minimum permitted – 25.00. Savings are transferred on the 1st of each month.

Will update aims for 2008 – post #110 on page 6 to show a failure for monthly savers.:(

JonnyBravo

financialbliss wrote: »

My strategy towards savings are as follows. We have two Lloyds TSB monthly savers @ 8% which pans out to 8% for mrs bliss and 6.4% for me as I get taxed. These are fed from our icesave account @ 6.3% held by mrs bliss (no tax) and when I get paid this is fed into the nationwide e-savings @ 5.55% again held by mrs bliss so no tax and emptied as spending required / bills need paying.

I know everyone says use your ISA allowances, but as mrs bliss isn’t currently earning, all her savings allowance is tax free – we’re trying to make best use of the rates and we can get better than ISA rates by using mrs bliss. Exactly if this is allowed, I’m not 100% sure, but I can't be the only person who does this? Should my savings go into my accounts and be taxed? Anyone?

No of course your savings shouldn't be in your account and be taxed.... well except at least in one scenario. I'll try and explain what I mean....

I'm not clear on when mrs bliss is going back to work and how much youve got saved etc but do think about it. You dont want her to go back to work when you still have more savings than you can put into two cash ISA's in one year cos then youll be landed paying interest.
ie what I'm saying is that it is possible that it would be better in an ISA cos you lose the allowance if you dont use it each year. Only you can answer this with more info, just making sure you've thought about it.....

but you seem to be nearly as intelligent as myself so I s'pect you have