FinancialBliss: My mortgage free journey…

financialbliss

Hi all,

Been a busy few days. Bedroom furniture arrived and I’ve been attempting to build them for the last 3 evenings, with two small helpers! Daughter now has a full sized bed, bedside cabinet and wardrobes.

Start of the month. As it’s the 1st of March, I’ve overpaid 351.97 to the mortgage account today – this brings the monthly payment up to 1,250.

March. I’m expecting March to be a tough month, due to a monster credit card bill needing paying towards the end of the month. February wasn’t too bad, transferred money into savings as it arrived, then back out again as required. Net transfer of zero.

Mortgage interest. I’m not exactly sure what’s going on here. Total interest was 502.40 on 25th, 511.29 on 26th, 520.19 on 27th, 529.09 on 28th and also 529.09 on 29th.

Every day I’ve noted the mortgage interest and divided by days elapsed in February, it was looking around the 8.90 mark. As I appear to have had no mortgage interest on 29th, this dropped the monthly interest for February to 8.59 compared to 9.03 in January.

Don’t suppose anyone else noted anything unusual?

Update. Can’t really do a stats or graph update until the overpayment has been applied. Suspect this won’t be until Tuesday with it being a weekend - Nationwide advise on-line overpayments take two working days to clear.

FB.

Kaz2904

February 29th isn't counted as a day per se.
It is annual interest so divided by 365 days so Februarys charged and earned interest will only ever be for 28 days.

setmefree2

Which means that you don't get any interest on your savings either:p

What a lovely image of the FBs building furniture together....they should be called the domesticblisses

SwitchyChick

Hi FB -Just wanted to say love this thread and spent a huge chunk of yesterday reading all 10 pages. Yes, I am/was that sad!
Just wondered if you have a wedge put aside for the I-hope-it-never-happens-to-me-but-what-if-it-does fund? I remember you said you had savings but would they cover 3-6mths salary? I just got concerned that you were throwing all your spare cash at the mortgage...
Thanks

financialbliss

SwitchyChick wrote: »

Just wondered if you have a wedge put aside for the I-hope-it-never-happens-to-me-but-what-if-it-does fund?

Hi SwitchyChick:hello:

Nice to see someone new! Thanks for the comments / compliments.

Regarding savings, we’ve currently got around 12k put aside for emergencies. To some, I guess this is a lot, but should my income stop tomorrow, this should serve out debts for about 6 or more months. The biggest chunk being the mortgage and I should be able to go back to Nationwide and re-negotiate a longer term to drop the monthly payments.

Nearly all of this is in the Lloyds TSB monthly saver accounts. Mrs bliss is getting 8% on her savings (nice), I’m getting 6.40% ie 8% taxed. Mrs bliss also holds an icesave account, currently 6.05% tax free and also a Nationwide e-savings, currently 5.30% tax free.

We try to keep as much in the higher rate or tax free accounts as possible, feeding down to the e-savings account, which we can then quickly swap into our Nationwide current account for bill servicing.

Trouble is that with only one income and quite a tight budget (SOA coming soon – honest), it’s very easy to draw on savings and then not put them back. I guess another phrase for that is living beyond your means. Clearly, we’ve not done that in the past as we’ve been able to build up some reserve, but since purchasing house #2 in 2004, we’ve yet to have a year where we’ve added to savings!

Some years we’ve been a few hundred pounds down – others we’ve been many thousands down such as when we added a conservatory out of savings (9k) or put in a new condensing combi (2k). Having just checked, in 2004 at the time we moved in, we had 25k, so we are chipping into savings:eek: That said, the conservatory was planned.

Building equity. We’ve somewhere in the region of 200k equity in our house – this has been “calculated” by applying the house price index to our purchase price monthly, but I say calculated in quotes as I take this figure with a huge pinch of salt. It's only worth whatever someone will pay for it.

Mortgage equity. We’ve 16.5k in overpayment reserve on the mortgage, and I can borrow this back, but the monthly re-payment would increase, and I guess significantly too.

So, all in all, I don’t think we’re doing too bad. I guess the shorter answer would have been yes – I’ve got a little reserve. I’m not trying to throw everything at the mortgage… well not just yet.

I may have another answer when we come off the fix in 2011.

FB.

Kaz2904

What do you anticipate doing come 2011 for your mortgae in view of the outstanding (possibl) term of only a year?
I'm asking because I need to remortgage come July 2010 and hope to be mortgage free 22/11/2012 if not earlier. Now because I will be looking at around a 2 year term I think I am going to have to weigh up the price difference between paying for a 2 year offset that allows ISAs to be offset or paying my companies SVR. My outstanding amount at remortgage will be 35-36K so it will be a fine line I think for the mortgage interest. We do also have some savings from DH's inheritance and what we are saving to repay my Mum so I'm confident that we should be able to offset quite a large amount thus reducing interest costs.
So maybe with this and an interest free for purchases credit card for a year and maybe a couple of BT cards I might be able to pay no interest over the last bit.
Of course I may magically budget the extra 36k out of our earnings and clear the whole mortgage but I think Satan will be having ice dance lessons before that happens!

financialbliss

Just updated post #1. As of today, I’ve an outstanding balance of 66,817.50.MFiT percentage now at 16.75%.

Hopefully have a maximum of 57 payments remaining at a monthly amount of 1,326.06 to achieve goal. As mentioned previously, as “only” 1,250 is being put towards the mortgage, this figure will creep up. Not too bothered right now. It’s a race not a sprint.

I’ve also updated the graph. As I only catch my balance on a Sunday, I’ve estimated the balance this coming Sunday. The graph hardly moved, so this estimation isn’t an issue.

@Kaz. What am I going to do come March 2011 once I’m off my now looking very nice 4.79% 5 year fix?

If all’s going to plan, I should be down to about 30k, perhaps even 25k by then. May be that the costs involved in switching outweigh the benefit of staying put on the Nationwide standard variable rate.

The mortgage markets seem a bit a odds with the bank of england at present – read earlier today that two mortgage lenders have just put rates up despite last month’s BoE reduction.

I guess I’ll have to take stock nearer the time…

Off to update signature now!

FB.

financialbliss

It’s been a long and tiring week and I can’t believe I’ve another day to go before the weekend. So, quick-ish update this evening.

Bank of england. No change today from the BoE regarding the base rate. As I’ve mentioned before, I’m in the middle of a 5 year mortgage fix @ 4.79% - which in hindsight, I think was a good move. I remember that I was very tempted at the time to go for another 2 year fix, but had I chosen the two year fix, we’d be coming off this at the end of this month. Got another 3 years until March 2011, so while I do keep an eye on the base rates, I’m not too worried either way they move at present.

Home insurance. As it’s March, this means home insurance is due again. I don’t exactly know why, especially as I try to be on the ball with mortgages, saving rates, utility bills etc – car and home insurance are two things that don’t particularly inspire me.

Home insurance is due next week. After getting the MSE e-mail, I was just in time to do a Tesco home insurance quote. So, apart from my renewal letter and Tesco, I’ve a fair bit to do. I normally follow the MSE insurance article and I’ll do the various screen scrapers: confused.com, comparethemarket.com etc.

As I’m sitting here with a glass of wine – probably another reason why I’m tired, the insurance is going to be put off until tomorrow or the weekend.

School. Not nursery, but school. Got a letter from our local council this week informing us that #1 has been successful in his school application. Excellent, and just as well too, as we only put the one school on the application.

Just done a RAC route planner, and it informs me that the school is 0.68 of a mile away and estimates our journey to be 2 minutes. Need to leave the housing estate join a main road, bear right, right at traffic lights and double back on yourself.

I don’t think so! It’s going to be much easier and possibly quicker to walk. Cut through grassed walk way of estate. Arrive at school gates.

Hopefully some fuel savings to be made here. Thanks #1. :j

FB.

Kaz2904

My DS is starting school in September and I'm looking forward to it too. DD is already there and having them both in the same place will mean that I can walk them to/from school. It's 1/2 mile from our house but there is a huge hill! Maybe my bum will get slightly smaller come September.

financialbliss

Recently got my renewal notice from Budget Insurance @ 220.69.

I’ve this evening gone ahead with a home insurance quote from Halifax. This was @ 179.46 – ok only 41.23 less than Budget, but Halifax allow you to pay monthly at no extra cost, so I’ve done that.

But while typing this up, it’s just occurred to me that I should have checked quidco. A quick check suggests I could have earned £55 for a tracked transaction on-line to Halifax. Doh. Oops.:mad:

Again, it’s late and I’m tired. While I’m saving money, it’s perhaps not as much as I could have. You live and learn…

Need to make a mental note for car insurance. Told you I hate insurance.

FB.