Time to start my race to zero

OhIJustLostMyShoe

I've found myself at home, with far too much time available to stew and panic about everything, so I thought I'd tackle that subject I've shoved to the side for quite a while now - the race to get my mortgage balance down to zero.

In terms of background, I spent most of my youth from 16 onwards trying to save up and shovel money into my savings accounts, and finally ~2 years ago was able to buy and move into my 'forever house' - or at least one that will last my wife and I for the next decade!  The only problem (depending on perspective, I suppose) is that I work in London, which means that the numbers become almost comical.  And although I might look back at this post in a year's time and laugh / cry, there's a very real risk right now that one of us will lose our jobs - so being prepared might be everything.  The main thing to my mind is that we're both prepared to knuckle down and make the figures move in the right direction!

We actually owe quite a lot on our current mortgage... it's £414,000 at current count, which is one of those figures that looks so crazy that it's to forget how close it is to half a million pounds.  So, yes, quite a way to go yet!

And on top of that challenge, we have a baby due in July, so plenty to keep us busy.  I expect our frugality to get stretched quite thin, but that's part of the fun?  I think?!  

coldcazzie

Welcome! Good to "see" you here, and congrats on the imminent arrival! 🤰

OhIJustLostMyShoe

coldcazzie said:

Welcome! Good to "see" you here, and congrats on the imminent arrival! 🤰

Thank you

Just had a look at the mortgage news - of course we fixed at 1.7% and the ERC rates are hideous so we'll be stuck with that until next summer!  

Also I had a virtual catch-up with my boss and apparently they aren't planning to fire anyone, so... good news... I suppose?  I take these things with a pinch of salt.

I've gone through all of the finances, and they look to be in pretty good shape all things considered.  I don't think there's any obvious fat that we can trim - although potentially I can shave a bit off the energy bills so I'm going to do some more calculations these evening.  I only switched a few months ago!

coldcazzie

Within your fixed rate period you can usually repay up to 10% without charge. Worth checking with your mortgage company. 

OhIJustLostMyShoe

coldcazzie said:

Within your fixed rate period you can usually repay up to 10% without charge. Worth checking with your mortgage company. 

Yes, it looks like we do have that option - although I'm going to back off payments for the moment until I know a bit more about my wife's job prospects (announcement from the government helps a lot but still want to let the dust settle!).  I think having the flexibility might be useful in a month or two, and if not then we can pile in at that point.

OhIJustLostMyShoe

I've used my free time today to do a full check across all of the accounts, and at the moment the position looks roughly like this:

House value: £532,000

Mortgage outstanding: £414,000

Mortgage terms: Fixed @ 1.7% until mid-2021

Non-retirement investments: £90,000

Cash: £43,000

0% Balance Transfer cards: £27,000

Net balance: £110,000

Overall debt exc. house value: £304,000

Needless to say, the non-retirement investments took an absolute pummeling over the last couple of weeks but it has been coming for a while.  For now the plan is to carry on as normal, build up a bigger cash buffer to weather any potentially stormy seas and then re-evaluate.

I've also been looking to see if we can make any cutbacks, but I don't think there's much left to cut now.  If anything it is probably about minimising any spending increases as we come up to the birth - although staying at home is saving a fortune on the commute which is very handy.

coldcazzie

I confess I'm a tad biased* but my suggestion for preparing for the upcoming birth is to hire a doula  

*I'm biased because I'm a doula, and frankly I think doulas are great!

OhIJustLostMyShoe

coldcazzie said:

I confess I'm a tad biased* but my suggestion for preparing for the upcoming birth is to hire a doula  

*I'm biased because I'm a doula, and frankly I think doulas are great!

Oh really?  That's amazing, it must be such a rewarding thing to do!

We are starting doing some classes this week via videoconference with a former midwife that my wife liked the look of, so that will be fun.  We've had to rethink quite a few things with the impacts of COVID but it's amazing how much you can do without physically being next to people these days.  At this rate I'm not even sure if I'll be allowed in the hospital, but I fully expect to faint anyway so perhaps it's a sensible precaution so I don't take up all of their time!

Also, with the pre-birth holidays cancelled and the first refund issued, we're now up £500.  Party-time!

coldcazzie

OhIJustLostMyShoe said:

At this rate I'm not even sure if I'll be allowed in the hospital, but I fully expect to faint anyway so perhaps it's a sensible precaution so I don't take up all of their time!

Yes, there's been quite a big uptick in people asking about homebirth, given the situation, and those who have been planning homebirths for some time now making preparations in case nobody turns up to their homebirth, which is a horrible circumstance to be faced with.

And yes, it's a wonderful job much of the time  

OhIJustLostMyShoe

Strange day today. More or less comfortable now that my job is OK, but my wife has been told that with 95% probability she'll get furloughed and salary cut. Not ideal, to say the least!

On the plus side, Nationwide have given us a 3 month payment holiday, my credit card provider has allowed a money transfer of £6,500 for ~2% fee and 0% interest for next 18 months, and my wife's balance transfer card that we pre-emptively ordered should arrive in the next day or two. And all achieved without any call centres, which is very impressive for the firms involved - I didn't want to waste call centre time.  Obviously increasing our debt pile by around £20k doesn't get us any closer to mortgage free, but I'm keen to have a bit more cash on hand until the dust settles. I can't shake the thought that we don't know how long it will take to come out of the other side of this, and the government and companies can't fund furloughed staff indefinitely. If we did need to shift money around at short-notice, then being able to keep the higher rate savings accounts untouched will be useful. Of course, if everything pans out OK then the money will come back out of the savings accounts and pay the CC debt down ahead of remortgaging in mid-2021 (and of course we have the option of cancelling out the mortgage holiday through over-payments).

 In other news, I'm entertaining myself by telling my wife about all of the goings on from the front window whilst she works at the back of the house. I was surprised at how many people seemed to be out and about or socialising (although admittedly all maintained the proper 2 metre exclusion zone, including conversations projected across the front garden). I'm getting the sense though that this won't be enough to keep us going for the next 11 weeks, and may result in me getting hit with something heavy, so I might need to come up with a new game.

savingholmes

Congrats on the bambino to come. Good that you have a game plan too.