Famof3's 10 year Challenge

Famof3

Hi everyone,


I've been a long long long time reader of this forum and also the Debt free forum. I have to admit it makes me feel uncomfortable to talk about finances, but i'm hoping that writing this thread and keeping track of my journey will help me open up a bit and help me keep on track of my journey as well as getting some fabulous advice :j


So some background about me and my family, as my name implies we are a family of three (although a family of four if you include the cat - poor thing gets ignored a bit since our baby was born). We (husband and me) have a beautiful little boy who is 1 years old. We are both in full time work (so exhausting!) and our baby is in nursery.


We are very fortunate to live in our dream home which we bought 3 years ago - it was completely run down and needed everything doing to it. We have done some basic DIY to have it liveable and then have spent the last 3 years saving for a two storey extension - the extension is currently underway!! :eek:


So now I want to look forward and try and be as financially independent as possible in 10 years, which means paying off as much of the mortgage and other things as possible.


As well as our main house we have 3 BTL properties, I have lived in all of them and we keep them in a nice standard for our tenants (we aren't rip off landlords). I was lucky enough (although unlucky to lose them) to inherit some money from my grandparents so invested it and always lived in my means. I think this is what makes me feel uncomfortable as I'm in such a privileged position - however I have decided to be proud of looking after the money and turning £50k into what it is today.


So those are the basics!!! Now onto the journey!! :j

Aim 1: Save £10k for Contingency for House Reno -> Update £6.3K saved
Aim 2: Pay £10k off BTL 1 mortgage (remaining £100k)
Aim 3: Emergency fund (£7.5k)
Aim 4: New car (mine is about to die) (£5)
Aim 5: BTL 2 - pay off £6,000 (remaining £200k)
Aim 6: BTL 3 - pay off £2,000 (remaining £290k)
Aim 7: Holiday fund (£5k)
Aim 8 : Overpay £10k from home mortgage
Aim 9: BTL 1 - pay off £25k (remaining £75k)
Aim 10 : BTL 2 - pay off £25k (remaining £175k)
Aim 11: Concentrate everything on the home mortgage to pay if off as quickly as possible!!

Famof3

My bite sized chunks as its a long long journey, this includes some rewards along the way!! I know its a crazy list and I hope we can do it with your encouragement along the way!! I'm starting with BTL loans (they are all self funding) as I would like to the LTV ratio down a bit - then I will concentrate on the house mortgage. We are hoping to save up to £2k per month - its going to be tough but I think doable!


Aim 1: Save £10k for Contingency for House Reno
Aim 2: Pay £10k off BTL 1 mortgage (remaining £100k)
Aim 3: Emergency fund (£7.5k)
Aim 4: New car (mine is about to die) (£5)
Aim 5: BTL 2 - pay off £6,000 (remaining £200k)
Aim 6: BTL 3 - pay off £2,000 (remaining £290k)
Aim 7: Holiday fund (£5k)
Aim 8 : Overpay £10k from home mortgage
Aim 9: BTL 1 - pay off £25k (remaining £75k)
Aim 10 : BTL 2 - pay off £25k (remaining £175k)
Aim 11: Concentrate everything on the home mortgage to pay if off as quickly as possible!!

beanielou

Hope that your journey goes well for you

Kittenkirst

Sounds like some great aims there Famof3 looking forward to seeing your posts and cheering you on.

3 BTL sound fantastic- well done with your investing so far! I’m sure with determination you can get these BTL mortgages gone and fulfil your family’s master plans!

Famof3

Thank you Beanielou

Famof3

Thanks KittenKirst - seems a bit scary and overwhelming at the moment but I guess at least I have it written down now and can start achieving something!!

Famof3

Right I've just gone through my mortgages:
BTL 1 (owe £110k) - Interest rate 2.72% (Variable)
BTL 2 (owe £206k) - Interest rate 3.9% (Fixed, 4 years remaining)
BTL 3 (owe £292k) - Interest rate 2.57% (Fixed, 2 months remaining currently re-mortgaging)
Home mortgage (owe £305k) - Interest rate 1.89% (Fixed, 4 years remaining)


So in my initial plan I was planning to pay BTL 1 down first as its the smallest mortgage and on a variable... but looking at those figures maybe I should just concentrate on BTL2 - although it feels really overwhelming as its so big. What would people do? Concentrate on highest interest first or smallest debt?

greent

Hello and welcome!

I'd concentrate on BTL2 - am guessing you are limited to 10% OPs p.a as it's on a fix? Although I guess it would also depend on LTVs on the properties. Assuming all are similar and/ or reasonable Then I'd still concentrate on BTL2.

Are you planning on sticking with a variable on BTL1?

Famof3

Thanks greent!
Yes limited to 10% OP. LTVs are all ok less than 75% mortgaged and none of them have stopped me getting a mortgage so far.... Although times are changing :-(. If I manage to pay off £20,000 a year that 1% => £200 after a year so actually it really makes a big big difference. Sometimes its nice to do the maths - that's almost one month of BTL 1 payment covered!

lulabelle1

Hi, I'd leave all of the B2L mortgages as they are and concentrate on paying down the mortgage on your own property.

For a few reasons:
-I'd prefer to have the roof over my head paid for as appose to the roof over my tenants head
-Despite the tax changes in recent years, it's still a benefit (when calculating self assessment) to offset mortgage interest against your tax bill.

Famof3

Also on the variable on the BTL 1 - I've had a look into changing it to fixed - however its currently on a very good deal and with charges etc it doesn't seem to make sense to move at the moment.. definitely going to keep an eye on it though!