regularsaver MFW journey - Achieving a dream.

regularsaver

Good afternoon all,

I am a long time lurker on these forums and since purchasing my first house in January 2019, I have been a regular reader of diaries in the MFW section of the forums. A big congrats to all those working towards being mortgage free and also thanks so much for the inspiration. I had wanted to make a few overpayments in my first year of house ownership but, people aren't kidding when they say the first 6/12 months are super expensive.

However, I feel now like I can start to concentrate on making some overpayments and really work towards getting the mortgage figure down as best I can.

I am not sure if there is a standard way of starting these threads but it seems like a little summary is a good place to begin -

- My house cost £138,000
- Deposit was £22,100
- Mortgage when taken out in Jan 2019 was £115,900
- Balance as of Jan 2020 - £113,643
- My mortgage type is repayment (think thats the correct term) paying capital and interest
- My current LTV is 18.57%
- I currently accrue interest at a rate of £7.32 a day / £227.24 a month
- My monthly mortgage payment is £429.75
- I am on a 5 year fix mortgage at a rate of 2.35%
- Mortgage term is 32 years.
- I am 37 and single.

Having spoken with my mortgage provider I have a 10% per year limit on overpayments and they can be as big or small as I like.

I have since before I moved into my home, been using Martins budget planner which has been really helpful and I have just updated it actually to reflect any changes to this years bills etc.

Not sure if I have missed any information, I think that's the usual stuff covered but absolutely please let me know if I have missed anything, and if you have any tips then please share, I love learning new things.

I shall be looking closely at all areas of my budget, and any unspent money at the end of each month I will be looking to overpay. Currently I am also working a fair amount of overtime too, so rather than saving it all, I am thinking about splitting it 50/50 savings/OP.

I do have just one question at this point, I have seen abbreviations such as DD, DH listed in peoples threads etc, I havent fathomed what these mean, I know this will be a silly question and I shall laugh at myself when/if someone tells me what they mean but had to ask

Thanks for reading so far and I hope you will join me on my journey to keep me motivated!!

newgirly

Hi and welcome, sounds like you are off to a fantastic start already, good luck with the new diary

Oh and they stand for dearest husband/daughter/son etc.

WannabeSavy

Wow very informative. You watch it start to come down. First year is the worst. Then I promise you actually start eating into the mortgage. I like the calculation of daily interest. Really makes you think!

regularsaver

newgirly said:

Hi and welcome, sounds like you are off to a fantastic start already, good luck with the new diary

Oh and they stand for dearest husband/daughter/son etc.

Hi thanks for your encouragement and thanks for commenting on my thread. 
I feel a little silly now for not realising what they stood for! Thankyou

regularsaver

WannabeSavy said:

Wow very informative. You watch it start to come down. First year is the worst. Then I promise you actually start eating into the mortgage. I like the calculation of daily interest. Really makes you think!

I hope it does come down quickly!  
The first year absolutely was the worst, not only in terms of the mortgage not feeling like it was coming down quickly (yes I know, only the first year and all but you know ) But also in terms of expenditure on house related things, only to be expected of course. Appliances, furniture and bits add up so quickly! Plus a few unexpected items such as needing a new front door, to replace the fascias and soffits and I needed a new tv aerial due to living in a bad reception area. On wards and upwards though I think, now those things are all done I shouldn't have to worry about them again for some time. 

Daily interest sure does make you think doesn't it! I feel its definitely motivating me to work hard and try to overpay what I can to help. 

regularsaver

I am sorry its been a little while since I have updated this thread. I hadnt forgotton about it, but I have had a few issues. Mainly my computer dying on me, and me having to replace it! But thats now done and I am sat here at my shiny new computer updating this thread to keep myself honest and perhaps offer a little encouragement to others thinking about joining in this addictive venture of overpaying and to join in with the many of you that already are. I am loving reading through the threads on here to get inspiration from other peoples stories and journeys. 

I made my first over payment of £100.85 at the end of February which I am really proud of myself for doing. Firstly because its the proper start of my MFW journey, and secondly, because I hit my target I set myself when I first got my house, to make my first over payment at the beginning of my second year. It was also pleasing to see the amount of interest I got charged this month had come down a bit too!

Is there a good time in the month to make the over payments, if doing it as a set amount rather than small amounts throughout the month, out of interest? I was sat here wondering about this to myself earlier today, you know, like an optimum time to make the over payment. 

I promise now I have my computer problems resolved I will be updating this thread more often. I have seen SOA mentioned, which I believe is a statement of affairs. Do you think its beneficial to do one and if so where do I find the template for it? 

Thanks to everyone also that has commented and offered support so far its very much appreciated!

regularsaver

To give myself even more motivation I have just asked to see if I can be part of the 2020 Mortgage Free Wannabe thread too. Going for 1% of my mortgage so £1159. Secretly I am hoping to be able to do twice that, meaning I will have paid off 1% for each of the two years I will have lived here by the end of 2020

I am feeling very motivated right now by all of this and by you all. 

coldcazzie

regularsaver said:

Is there a good time in the month to make the over payments, if doing it as a set amount rather than small amounts throughout the month, out of interest? I was sat here wondering about this to myself earlier today, you know, like an optimum time to make the over payment. 

I have seen SOA mentioned, which I believe is a statement of affairs. Do you think its beneficial to do one and if so where do I find the template for it? 

1, my personal understanding is that any amount you pay off you are then immediately no longer paying interest on; therefore asap is better than waiting! (Exceptions would be if there is a minimum payment amount, in which case you might need to save up for a while, etc.)

2, SOA is indeed a statement of affairs. It's everything you have going in and out - so I actually have an SOA spreadsheet! Incomings, absolutely essential bills that are based on the house (CT, insurance, mortgage), other bills, savings, groceries, petrol. You can use a template but going through a few bank/cc statements and just listing everything is a good start.

Good to see you here - I will bookmark your diary  

savingholmes

There is a template for SOA - but I can't remember where to find it. The best one formats so you can post it easily on here. If you go on the Debt free wannabee board and post it a a question - I'm sure someone will provide a link. I just wanted to wish you good luck on you journey. It's great that you are paying off your mortgage - have you also made adequate provision for your pension? 

regularsaver

coldcazzie said:

regularsaver said:

Is there a good time in the month to make the over payments, if doing it as a set amount rather than small amounts throughout the month, out of interest? I was sat here wondering about this to myself earlier today, you know, like an optimum time to make the over payment. 

I have seen SOA mentioned, which I believe is a statement of affairs. Do you think its beneficial to do one and if so where do I find the template for it? 

1, my personal understanding is that any amount you pay off you are then immediately no longer paying interest on; therefore asap is better than waiting! (Exceptions would be if there is a minimum payment amount, in which case you might need to save up for a while, etc.)

2, SOA is indeed a statement of affairs. It's everything you have going in and out - so I actually have an SOA spreadsheet! Incomings, absolutely essential bills that are based on the house (CT, insurance, mortgage), other bills, savings, groceries, petrol. You can use a template but going through a few bank/cc statements and just listing everything is a good start.

Good to see you here - I will bookmark your diary  

Hi coldcazzie, 

Thanks for your message. Regarding point 1 that was also my understanding, even if only paying off 1p, its 1p that will never have interest charged against it So paying extra ASAP makes perfect sense to me. I have no minimum payment amounts, just a set limit of 10% each year which to be honest I do not think I will get close to. 

Ok great glad I understood what SOA stood for! I use Martins budget planner already to list and detail every expense and found this extremely useful so I guess in effect that is an SOA too. I will find the template that I have seen knocking around somewhere on these forums as I know if will help with formatting for posting up the detail on here. It will be interesting to then see if I can make any extra cuts in said budgets to assist with paying off some more on my mortgage. I do need to ensure I live at the same time though, I find when I start these things, a bit like when I saved for my deposit, I go full bore one way rather than keeping a good balance between saving and living you know, but I guess it becomes addictive and when you start to see it mounting up you just keep going don't you. 

regularsaver

savingholmes said:

There is a template for SOA - but I can't remember where to find it. The best one formats so you can post it easily on here. If you go on the Debt free wannabee board and post it a a question - I'm sure someone will provide a link. I just wanted to wish you good luck on you journey. It's great that you are paying off your mortgage - have you also made adequate provision for your pension? 

Hi savingholmes, 

Thanks for your message! I thought I had seen an SOA template somewhere I will have a hunt and thanks for the tip of going to the DFW section and asking

Thanks for your wishes, they are much appreciated. 

A great point regarding pensions and its something I need to spend some time trying to understand because I really do not. I am 37 and have had a pension since 18. At my current employer I pay in 5% and they match that so 10% a month. What I have been trying to work out is if its invested in the best funds etc for where I am at in life etc and it seems massively complicated to understand at present, to me anyway. I had also wondered if setting up a personal SIPP might be an idea although I wouldn't be able to put loads into it. I believe I started a thread on my pension on here to get some help and advice, I probably haven't responded to it in a little while and need to resurrect my research into it. Perhaps I need to speak to an IFA or something.  

Edit - I found the thread on the pension - https://forums.moneysavingexpert.com/discussion/6036979/advice-and-help-with-my-pension-pension-newbie#latest