The Edcawber Principle

Suffolk_lass

Either to pay mortgage down to £29 and change the payment to IO or to pay of £5292.90 and put £10k into an RCI account fixed for 2 years at £1.65. I can't decide which - what do you think? the £5k bit is because This is the 5th 29th Feb this century. Nerd, moi?

By the way, on palindromes, my DH wants to run a campaign for Tuesday 22.2.22 to be renamed Twosday, as a one-off - now that really does appeal to my inbuilt nerd

edinburgher

I'd support Twosday!

Would either option save you much money? Have been reading about IO mortgages lately, along the lines of doodling how to afford a hefty extension...

CathT

You're really attacking those credit cards Ed. Where are you planning to divert the money once those are cleared? 

Another one surprised your little one is almost school ready as in my head she is 2 years old! 

edinburgher

That's a good question CathT...

Basically have two financial goals left, get a house that works for us and retire early. The two don't play nicely together!

edinburgher

£50.84 paid off CC.

Mrs E and I have a rare date today, steaks and wine thanks to a Christmas voucher

We are going to be grown up and talk plans! The only plan I have is to take a few months of planning once the CC is gone...

beanielou

Enjoy your date 

edinburgher

Thanks beanie - we had a good time (although the sirloin steaks were tough as old boots)!

We discussed plans and have decided to stay put and extend. From there, we had discussions about four different ways to possbly fund significant amounts of work, does anyone have any thoughts? At this point, we'll be debt free soon and have decent monthly salary, but no savings.

1. Borrow as much as we can from the bank via remortgage. I believe you're only allowed to go up to 85% typically? So that would only free up perhaps £44k
2. Save as much as we can over perhaps 18 months and then remortgage, perhaps £62k in total
   
3. Borrow as much as we can from the bank via remortgage, open as many money transfer cards as we can and save enough to make the minimum repayments for 2 years and then remortgage with new and improved property to settle CCs. Perhaps £79k
4. Combination of 1, 2 and 3, possibly with an interest only mortgage for 2 years to turbo charge #2? Perhaps £85k+
   

Am not sure how best to maximise available monies without saving for a prolonged period.

I know that some of this probably sounds batshit and some people will just say "why not just save until you can afford it"? But we've been in our pokey house for 5 years and could theoretically move to somewhere costing £350k. This is meant to be the sensible choice, I just don't want to wait forever...

We have renovated most of a house that was left in the 70s (new bathroom, boiler, radiators, solar panels, gardening etc.), have paid off our car and almost all of our credit card debts and are now at the stage where we want something that works for us. We have decent jobs with good pensions, work stability and aren't daft - any bright ideas how to maximise funds available?

edinburgher

Back to work, but bumper CC pay off day of £137.71 (nearly 3% of balance) - sold a CD; child benefit payment, £5 odds back from a defunct P2P site and daily payment of 1%.

Daily payment required to pay off CC by 13th wage on 1st of June down to £29.09

Suffolk_lass

edinburgher said:

I'd support Twosday!

Would either option save you much money? Have been reading about IO mortgages lately, along the lines of doodling how to afford a hefty extension...

I have been expecting the letter from the BS to update out interest - it is down to £15.50 a month now (or 50p a day) - so, 29 more payments is £449.50 so I need the same money to be generated  if I continue IO. I think it is the constant payments out thing that is getting me. Now I have stopped work and am almost coming to terms with the R word (although I am really not that grown up yet), I am trying to simplify things so they sort of run themselves. I have identified prevarication as a key skill over here.

Seriously on IO - You do need to be quite disciplined about how to eventually deal with it and also conscious of the silk purse out of a sows ear thing (ROI). We knew we wanted to stay here for a number of years after we stopped work so paying it off works for us - not paying it off and relying on some capital growth, and a move to somewhere smaller might work, because it gives you the "now" satisfaction of making life more enjoyable after the utter misery of having an extension built (pink dust, as previously described).

If you move instead, do it in the sure and certain knowledge that it won't be perfect and after you get there, the list of stuff to spend gets bigger (I refer my honourable friend to his previous diary and all the jobs he had to do after first buying the current house). However perfect it might appear, you will change things - better to buy a wreck and get all the stuff done together or stay with the one you know IMHO. Or there is this?

edinburgher

I also like the idea of simplification, but just when I thought I was out, they pull me back in! (wee Godfather quote there). That was why I've switched our DC pensions to Target Retirement funds.

I get paying things off, I've spent my whole adult life doing that Going IO would allow us to free up money in the short term. After 2 years, we could either continue IO (would allow Mrs E to add £14,000 a year to her workplace pension avoiding £4,000 a year of tax and NI), or remortgage onto a standard product.

Part of me thinks that the problem is that we're just reaching peak mid-30s earnings and that neither of us is used to having any money... Maybe the desire for a big project is just a fear of being bored? Then again, the thought of a big kitchen, a gabion fence around the newly levelled garden filled with Scottish cobbles and sedum and a perimeter of wildflower beds sounds like heaven 

Regardless of any of the more novel plans, our income is going to go up this year (my personal allowance will be restored as of April, I'll get a 3% pay rise in April, then 6% in October, DD childcare costs will be nearly non-existent as of August, my Cycle To Work loan will be repaid and the remortgage should knock £200-300/month off. I feel that we could probably leverage this to complete some of our plans relatively quickly... Might speak to IFA relative when I see them next month.