FinancialBliss: My mortgage free journey…

setmefree2

Little_Mama wrote: »

Never as much pain as when I was paying 15.8% on an interest only mortgage with negative equity of 40% of the original (1989 bubble) purchase price back in 1992. Having survived through that I will never pay anyone another penny interest more than I have to.

LM

Wow that must have been scary....:eek:

setmefree2

Fiddling Flower Petals,

with mortgage journey - look forward to hearing about your progress:D

Floxxie

StuartGMC wrote: »

SmileyG
I think those hit by that recession, whether on or kept of the housing ladder, have primarily been the ones being "cautious" since and to wish to clear the mortgages quickly with overpayment etc and as you note, see it as a debt (on your home, BTL is I think different in that context, not that I have one!)

Completely agree with you Stuart. My parents had their house repo'd in the last recession and were then chased for the 'outstanding debt'. They will be paying that off well into retirement. The sad thing was is that is was £14k but by the time the fees etc were added on, it was £55k.
I have never got over the indignity of coming home from school to find that it was no longer our house and we were homeless.

By the way they appear to have learnt nothing from their experience and still spend as if there is no tomorrow. I'm known as the odd one for trying to pay off the mortgage! There are some people that cannot be helped.

Floxxie

Little_Mama

SmileyG wrote: »

God, I remember that.........

and I felt smug because my fixed rate was 12.75% (and my company was subsidising 2.75% of that!).

People were railroading me into the property market at the peak (1989) and I had negative equity for 11 years!

It certainly focusses you to treat amortgage as a debt and not a cash cow!

SmileyG

Most definitely.

In fact I sold up, used savings, the endowment and took a personal loan to pay it all off so that I could start again with a clean slate, relationship breakdown made staying there not an option.

Certainly focuses the mind and is a salutory tale to learn from.

LM

Little_Mama

StuartGMC wrote: »

SmileyG
I think those hit by that recession, whether on or kept of the housing ladder, have primarily been the ones being "cautious" since and to wish to clear the mortgages quickly with overpayment etc and as you note, see it as a debt (on your home, BTL is I think different in that context, not that I have one!)

:jThat's me!:j

LM

Little_Mama

setmefree2 wrote: »

Wow that must have been scary....:eek:

Hi SMF2,

It was surreal really, only looking back do I realise the full enormity of it. I was only in my very early 20s and whilst a lot around me were handing their keys back i always felt that approach may come back to bite me on the b*m :shocked: so I just took whatever overtime was on offer, lived within my means etc....

You should have seen my face though when they tried to offer me an interest only mortgage the next time I dipped my toe into the muddy waters of house purchasing :mad: That and some huge mortgage amount they insisted OH & my earnings would support! That's when I told them to find the mortgage that a fixed monthly sum would support based on 2.5 times single salary (as we hoped small people would come long) and then find me suitable properties within that.....:D I know it doesn't work that way for all and others have sadly been forced to overextend due to the market but I just never wanted to be in that position ever again.

LM

taka

I took out my first mortgage in 1994 (~8% fixed) when I was at Uni aged 18! It scared me to death as I had no proper regular income (My parents guaranteed part of the mortgage so it was judged on their incomes etc)! I got a couple of flatmates (which covered ~90% of the mortgage) and worked when I could. It meant being quite responsible and frugal at uni and things like money i got for my 21st Birthday was used to pay for repairs :rolleyes: but it was well worth it (and it was much nicer than the usual student flat ).

When I came to buy my current flat (2002 - in a much more expensive city) it meant I had a nice deposit and could (only just :eek: ) afford to buy a 1 bed flat where I now live on 3.5x my salary. I was really annoyed that I couldn't afford to keep the term at the then ~17 yrs I had left on the origional mortgage and had to take it out to 25 yrs again! I purosely bought a flat that could be used as a 2 bed flat at a push (it has 1 bedroom + a tiny wee boxroom - same size as a double bed) if necessary to help pay the mortgage if things got tough.

To me my mortgage has always been a bit of a burden and I've never viewed the deposit I put down on my current flat or any increases in flat/house prices as as "real" IYKWIM. I am very lucky with the way it has all worked out so far. My aim is to pay it off by the 25th anniversary of starting my 1st mortgage (2019 - it is currently due to end 2027) though I'd love to pay it off before I'm 40 in 2015!

uzubairu

Little_Mama wrote: »

Hi SMF2,

That and some huge mortgage amount they insisted OH & my earnings would support! That's when I told them to find the mortgage that a fixed monthly sum would support based on 2.5 times single salary (as we hoped small people would come long) and then find me suitable properties within that.....:D I know it doesn't work that way for all and others have sadly been forced to overextend due to the market but I just never wanted to be in that position ever again.

LM

We had the same problem when we were applying for a mortgage in 2006 at the Nationwide.

The advisor spent a lot our time trying to get us to take out a larger mortage.
They were prepared to offer us over £180,000 when we wanted to borrow a lot less.
Asked us to think about what we could do with the extra finance.
We still said no and borrowed £113,000 which was under 2.5 times our combined income, and payments could be sustained on one income (which was the limit we had set ourselves).

I too feel sorry for those who have been unable to get a mortgage with that kind of multiple (given the housing market), but I think we would have resisted and saved a bit more before taking the plunge.

I can't wait to be rid of our mortgage, but my colleagues at work just think I'm mad to want to pay it off early.

StuartGMC

It strikes me that we should have a compilation of experiences like we've posted above and have this as a sticky to point people to when asking about taking out a mortgage. Anyway, it's nice to reminisce just a little disappointing that we're doing so in the context of such an uncertain time. Best wishes to all here in weathering the storm.

financialbliss

Yikes. Busy here. I make that 16 posts since my last post. Very interesting / informative.

I guess I could have related to / picked out any of the last 16 posts and found something similar in our situation, however this one sticks out more than the rest:

uzubairu wrote: »

I can't wait to be rid of our mortgage, but my colleagues at work just think I'm mad to want to pay it off early.

I don't actually know anyone (apart from you lot on these forums) that is actively and purposefully attempting to pay their mortgage off sooner than the schedule laid down by their mortgage provider.

Yes, there's been bad times in the past, and it looks like we're now officially in a recession:

http://news.bbc.co.uk/1/hi/business/7846266.stm

But just pause for a moment... you've made overpayments and you're hopefully ahead of the game with regard to mortgage payments. This is a great achievement and should hopefully aid in weathering the recession storm that could last up to two years.

Give yourselves a pat on the back :T

Can't think of a better place to sound off ideas and get support. Thanks again for your input, support and continued reading, honest!

Financial Bliss.