FinancialBliss: My mortgage free journey…

determined1_2

Sent you a PM btw

financialbliss

determined1 wrote: »

Sent you a PM btw

Finally got around to PMing you back a few days ago with an email address to use!

Cheers,
FB.

financialbliss

Oops. Aim for 2011 was to update the diary at least once per week – just nipped on computer for 5 minutes to check a QuidCo transaction had tracked, check email etc and realised I’d not done a single update this week.

Two things of interest this week – both directly related to the mortgage.

Mortgage statement. Got our annual mortgage statement and absolutely nothing in there that I didn’t know – if anything my monthly breakdown of mortgage interest gives a greater level of detail than that shown in the Nationwide statement. One other point is that there is an early repayment charge (ERC) of £82.94 should the mortgage be paid in it’s entirety before 31st March.

Nationwide meeting. Had a chat with an adviser at Nationwide during the week. Don’t fancy explaining it all right now as I’d probably not do it justice due to it being late, but it probably helped to sway me in the direction I think I’m going to take. More later in the coming week.

Phew, - just got in there with 2 minutes to spare! Cutting it fine

FB.

financialbliss

Oops. Had to sit on the naught step when I got in this evening… :eek:

Caused a bit of an issue today with Mrs Bliss. She was shopping and the Barclaycard payment was rejected.

Step back to Sunday evening and I scoured the internet for a game for the PS3, which I eventually discovered on a site that was also supported by QuidCo. Turned out that the on-line price, plus the 5% QuidCo discount gave a saving over other retailers, so the purchase was made.

However the website was a UK subsidiary of a Danish company and the game purchase plus a holiday booking last week from Bourne Leisure (Haven) warranted the automated fraud detection at Barclaycard to query the transactions and suspend the account.

Then got no less than 4 automated calls within a matter of a few minutes – two to the home number and two to my mobile alerting me of possible fraud. Quick chat to customer services and the account was re-enabled, so no real harm done there, apart from her pride.

Oh, and the shop she was in didn’t take American Express (our other credit card), so she abandoned the shopping trip and returned home! Neat little trick for saving money – will have to try that again some time… :rotfl:

FB.

financialbliss

Just to keep the diary ticking over, thought I'd publish our House Price Index stats, which I occasionally update.

The site I use recently updated their December figure, so here's January to December 2010:

House price index (HPI).
2009 year end house value: 244,917.64

Month: Change / Value / LTV

January: 2,533.79 / 242,383.85 / 19.49%
February: 678.69 / 243,062.54 / 18.91%
March: 2,669.52 / 245,732.06 / 18.19%
April: 4,343.63 / 250,075.69 / 17.37%
May: 2,307.56 / 247.768.13 / 17.14%
June: 4,117.41 / 243,650.72 / 16.80%
July: 2,850.50 / 246,501.22 / 16.08%
August: 814.43 / 247,315.65 / 15.63%
September: 7,691.86 / 239,623.79 / 15.48%
October: 2,398.04 / 242,021.83 / 14.80%
November: 2,941.01 / 239,080.82 / 14.45%
December: 2,579.04 / 236,501.78 / 14.06%

2010 year end house value: 236,501.78

Net difference was 8,415.86 - house loosing roughly £700 a month in value. Not fussed about this, as the housing market generally is slowing, plus I'm not planning on selling any time soon.

Worst month was September - over £250 a day depreciation - if you believe the stats :eek:

One things that I'm pleased about is the Loan to Value drops month on month, even with big chunks of house depreciation.

I'll continue to post these occasionally throughout 2011 - not every month though.

FB.

RosieTiger

I suppose that the house price movement is all relative at the end of the day. I also have some sympathy with the need for it to find it's correct level as first time buyers have absolutely no chance, which certainly causes me concern for my kids.
At the same time it must be he'll for anyone who has bought with a large mortgage and watching the value fall away.

JonnyBravo

financialbliss wrote: »

Net difference was 8,415.86 - house loosing roughly £700 a month in value. Not fussed about this, as the housing market generally is slowing, plus I'm not planning on selling any time soon.

If, when you do move, you upsize, the lower the house price index and therefore house prices in general the better. (The price gaps between the houses might be proportionately the same but are smaller in cash terms).

Of course, if you would be downsizing it's bad news.

financialbliss

Well, the mortgage interest broke through the £100 barrier on Monday at £101.89.

Normally, I have a little fun and attempt to estimate what date the mortgage interest will hit £1k mark and in the previous few years the actual £1k dates were:

2008 – 24th April
2009 – 15th May
2010 – 22nd June

The projection being pretty simple due to being on a fixed rate and I tended to only be out by 1 day due to the compounded difference of a penny or so in daily interest.

But, 2011 is proving harder to pin down in terms of if/when I could hit the £1k mark. The good news in that should I decide to drop onto the Nationwide SVR, I’d see total 2011 interest of less that £900, ie I’d not hit the £1k mark.

Should I drop onto the Nationwide SRV and the base rate goes up by 0.25% every month starting in April until December 2011, I’d see the mortgage interest hit £1k in December 2011. Nine base rate rises before the end of the year - not very likely, but if could theoretically happen :eek:

Should I take out another fixed rate product, anything over 3.14% fixed from April onwards will see the mortgage interest hit £1k in December 2011.


So, as far as the mortgage route goes, I’m now pretty confident of the route I’m taking after the fix expires in March, but I’ll leave that to another post…

FB

financialbliss

Evening...

I've just posted this in the Mortgages and Endowments board:
https://forums.moneysavingexpert.com/discussion/3009344

-=oOo=-

Hi,
Appreciate there’s a fair few queries at present along the lines of should I fix, should I drop onto SVR etc.

I’ve actually made a decision on my own situation! Background is as follows:

• Coming to end of a 5 year fix with Nationwide at 4.79% on March 31st
• Estimate I should owe £30,675 at March 31st
• Property worth around £235,000 so LTV very low at ~14%
• Have an overpayment reserve of £27,000 which I could draw down from Mortgage should I need to
• Nationwide confirmed that I will drop onto their BMR at 2.5% from 1st April
• Remaining mortgage term is 3 years

Have a number of options, eg take another 2 year fix with Nationwide, re-mortgage to another lender or drop onto the Nationwide BMR.

Currently paying £1,000 to the mortgage – requirement of £929.33 and OP of £70.67. From April 2011, monthly payment requirement will be £888.71 providing the BMR is still 2.5%

The tipping point was that if I decided to take another fix with Nationwide, they would draw a line under the existing overpayment reserve which I would no longer have access to, plus I would then revert to their Standard Mortgage Rate after the fix – currently 3.99% with no ceiling.

As I’m already overpaying, the £1k per month payment is equivalent of a mortgage rate of over 10%, plus each 0.25% increase in the base rate increases the monthly mortgage payment by just £3.37.

I’m taking a risk, but I’ve decided to allow the mortgage to drop onto the Nationwide BMR.

I’ve also calculated various BoE base rate scenarios including an increase every second month (probably unlikely) from now until the end of the mortgage, which puts the base rate at 5% in December 2013 and the BMR at 7% at which point the mortgage would end.

Due to the mortgage being small, especially so in the last year the potential ramp up in the BoE rate has very little effect, only increasing the term by one month compared to a 2.5% BMR (unlikely too) for the remaining loan term - a 2.5% rate throughout would cause the mortgage to end in November 2013.

Seems like a no brainer?

Curious more than anything as to the route others would follow if they were in the above situation?

-=oOo=-

I've altered the important bit to be in red!

Despite ramping up the BoE base rate, this makes very little effect on the eventual completion of the mortgage, and while it's a risk, it's not that big a risk.

After the recent economic news, it looks like July 2011 may be the earliest we see a rate rise and there are noises from some quarters that rate rises could be kicked into 2012.

Nationwide have also confirmed that they will advise in writing 28 days before I drop onto their BMR of the monthly amount I will be paying. Was £888.71 at the time, but could reduce slightly due to overpayments made in February and March.

Watch this space - is going to be very tight to hit December 2012, but the low base rates should help us out...

FB.

golfiematt

i agree with the route your taking, its about risk to reward, you have a low balance so the risk of a higher interest rate massively affecting your finances is fairly minimal in context.Also keeping the reserve gives you peace of mind if you need money quickly in a worst case scenario.
fingers crossed on the base rate for everyone!