The start of my journey to staircasing and becoming mortgage free

j_s_m

Hi all,

I'm a long time lurker on the forums and decided that I'd like to join all of the journeys posted here into becoming mortgage free! It's my first post - please let me know if I've done anything wrong!

However, all is not as it seems, as my situation is a bit different from the posts I've seen in here... here's the bits you need to know:

• I have a London mortgage, with 34 years remaining
• My property is shared ownership
• I'd like to staircase up, and then become mortgage free (told you it was a bit different!)

My mortgage:
3.99% FTB SO 2-year fixed mortgage from a Building Society who are actually great with customer service. However, they don't provide an online account system for mortgage-holders, and only send statements once a year, which makes it harder to keep track of... all I currently know is that the mortgage amount was just shy of £85k when I took it out

My property:
Backstory: I lived with my family up until I had just turned 22 and was lucky to be accepted for a mortgage and for the property. It's a flat in North London that is shared ownership - I currently have a mortgage on the first rung of the ladder - 25%. It took 7 months to go from deposit to actually getting the keys. A year later, I'm still fighting for the builders to finish off works and rectify snags here, but to no avail thus far

Staircasing situation:
Whilst this isn't my forever home, the HA who own the other 75% are useless at customer service, and charge a £45 management fee/year, but do nothing for the residents whatsoever. I'd like to staircase to (pettily) spite them, but also, to garner a bigger deposit when me and my SO decide to move... who knows, it might even become our "city" flat and we'll have a country manor elsewhere :rotfl:

Let the fun begin! :j

j_s_m

My statement of affairs:

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 2
Number of children in household......... 0
Number of cars owned.................... 1

Monthly Income Details
Monthly income after tax................ 2575.7
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 2575.7

Monthly Expense Details
Mortgage................................ 372.5
Secured/HP loan repayments.............. 0
Rent.................................... 683.2
Management charge (leasehold property).. 103.51
Council tax............................. 124
Electricity............................. 130
Gas..................................... 0
Oil..................................... 0
Water rates............................. 32
Telephone (land line)................... 0
Mobile phone............................ 19.63
TV Licence.............................. 12.85
Satellite/Cable TV...................... 0
Internet Services....................... 27
Groceries etc. ......................... 200
Clothing................................ 10
Petrol/diesel........................... 50
Road tax................................ 2.5
Car Insurance........................... 61.66
Car maintenance (including MOT)......... 30
Car parking............................. 0
Other travel............................ 183
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 25
Haircuts................................ 13
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 100
Total monthly expenses.................. 2179.85


Assets
Cash.................................... 0
House value (Gross)..................... 400000
Shares and bonds........................ 0
Car(s).................................. 3500
Other assets............................ 0
Total Assets............................ 403500


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 84459....(372.5)....3.99
Total secured & HP debts...... 84459.....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Loan...........................3749.89...310.1.....7.5
Total unsecured debts..........3749.89...310.1.....-


Monthly Budget Summary
Total monthly income.................... 2,575.7
Expenses (including HP & secured debts). 2,179.85
Available for debt repayments........... 395.85
Monthly UNsecured debt repayments....... 310.1
Amount left after debt repayments....... 85.75

Personal Balance Sheet Summary
Total assets (things you own)........... 403,500
Total HP & Secured debt................. -84,459
Total Unsecured debt.................... -3,749.89
Net Assets.............................. 315,291.11


As you can see above, I'm cutting it very fine to being in a negative balance each month... here's hoping I can save some £££ somewhere and start overpaying!

daisy_1571

Hellos0 :wave:

I'm sure others will have better advice but just from a quick look, electric seems quite high? I'm not sure I would put down the full value of the flat as asset since you only are buying a quarter (sorry) and the biggie - I don't see any savings there at all? Maybe you just didn't list them but if you are serious about wanting to pay down your mortgage and buy more of the shares (which I understand can be quite expensive) then I would advise:

1) get some savings. You need to be able to access a bit of money in an emergency (a real relative taken ill in a foreign country type emergency not a forseen expense like car repairs or I want a takeaway and to go to the cinema type emergency lol)

2) get that loan paid off 1) it's smaller than the mortgage so doable quicker 2) it's a higher rate of interest so costing you more and 3) once it's paid off it frees up money each month that can immediately be turned into more savings for either paying off more mortgage or going towards cost of buying another share or going towards deposit of buying a 100%flat somewhere.

It's great you are thinking about this.

If you are seriously serious, then 2 things are looked on as sage advice generally:
1) cut costs but you can only do this up to a certain amount, nobody can live on £0 each month so
2) up that income. Second job (and there 2 of you so second job for you both could well be doable), turn hobby into something that pays, sell some Stuff etc etc. It's not forever, just till you get into a better position - as you say you are close to a negative. A bad month could be serious, 2 bad months could be disaster and sometimes things come in threes...

Loads of advice on here so use it, check out the kon mari thread (great for keeping clutter at bay (stops you feeling like buying things plus maybe gets you selling things so double win)), old style threads great for keeping food costs down, Xmas present advice, other people's journeys and support for the middle of the month when it seems like you will never get there etc etc etc.

Main thing is you have started - you are already ahead of a large percentage of people who spend up to and beyond their pay with no thought about an overall plan.

Good luck, I will follow with interest, remember - you can do this


daisy xx

beanielou

Do you really only spend 50 quid a month on petrol?
Yet 60 odd quid on car insurance?

j_s_m

Hi Daisy! Thanks for popping by! :j

My electric is quite high because it’s the first year the properties have been built, £30 is actually Energy and £100 is the Hot Water and heating usage + a ridiculously high heating charge based on an estimate... we’ve heard from the provider - in writing - that we’re due to get at least 1/3 of it back in September and then it’ll settle down!

Regarding the total value of the house - in hindsight you’re right - I did think I had filled it out wrong!

I’ve got some savings but I completely forget about them as it helps me not to spend it - it’s a sizeable emergency fund ~ that would keep me ticking for 3 months I hope!

The loan - it’s a tetchy point but that’s what I’m working toward! I figured if I free it up, I can lump the £310 into a casual savings account to build up and pay off some of mortgage whilst having some more savings!

Your advice is sage! I’m currently on the market for a new job which I should hopefully hear about in a couple of weeks - September latest. It’s been a mismatch of me on holiday and them on holiday and just not being able to find a time that suits us all - but we’ve got a date in the diary! :beer:

Probably also worth noting that my SO does pay 1/2 the bills and rent - I couldn’t figure where to put that in my SOA - should I put it in his ‘salary’? Our situation is a bit complex - he’s still got the ability to gain all the perks being a FTB as he’s not on my mortgage - so I wouldn’t expect him to pay mine!

I’ll follow on all the threads you mentioned too — thanks for the warm wishes! :j

j_s_m

beanielou - we drive about 400 miles/month - I thought £50 was good?!

beanielou

j_s_m wrote: »

beanielou - we drive about 400 miles/month - I thought £50 was good?!

Thats ok, but it seems very little when you are paying more for insurance IYSWIM.