The big dream: mortgage free by 40 29 May 2020 at 5:28PM edited 29 May 2020 at 7:20PM in Mortgage-free wannabe 4 replies 191 views

x_clare_bear_x

I recently turned 34 and my husband and I are in a very lucky position to have two properties.

• A two-bed house that we live in (value £200,000, mortgage £160,000, monthly repayment of £565)
• A one-bed flat that we're trying to sell (value £120,000, mortgage £49,000, monthly repayment of £235)

Last year we got planning permission for a big extension on our house and we extended our mortgage by £60,000 (taking it up to the current £160,000). The plan was to sell the flat and use the money from the mortgage, the sale of the flat sale, and some savings to fund the building work.

Unfortunately, Covid-19 happened and it put everything on hold. Even if we could sell the flat, it would be a long time before we could get the extension done, so we've made the decision to use the money that's sat in the bank to pay off the mortgage on the flat and reduce our other mortgage. 

(If you've kept up with me until now, well done!)

The thing is, I really thought I wanted a bigger house but now I'm more excited about paying off the mortgage as fast as possible.

The new plan 

• Pay off the £49,000 on the flat
• Use the £20,000 that we have remaining to reduce our mortgage to £140,000
• Get an offset mortgage for the £140,000
• Save as much of our salaries as we can. We think we can do between £1,500-£1,750 per month if we really tighten our belts. That would give us a target MF date of about 6 years from now.
• If we're able to sell the flat, we'll be able to pay it off even faster and save up for the extension or a move to that bigger house that we're after.

It feels so achievable and I'm unbelievably excited about it!

 

longway2go

Welcome and good luck with your plans, you sound like you could make dome really good progress. Diaries on here are fantastic for tips and inspiration. 

LeighofMar

So exciting. I hope your flat sells soon so you can move forward with your plans. 

x_clare_bear_x

Thanks for the positivity everyone 

I managed to get our mortgage redemption statement today. We have some early repayment charges to pay but I've done the sums and the fees still come out less than the interest for the next 12 months, by £310, so it's still worth doing it now.

It wasn't easy getting the redemption statement from our mortgage provider (Halifax) as you can only get it over the phone. Unfortunately, their phone line cuts you off when you select most of the options.

In the end, after some advice from social media, I followed the phone instructions as though I was applying for a new mortgage or extra borrowing and got through to a person. This allowed me to request the redemption statement.

I've got to pull money in from a few different savings accounts and bonds, so we've given ourselves a target date of Friday 12 June to pay off the flat's mortgage.

Grogged

Welcome, sounds like an exciting time for you.
Do you currently rent the flat?
I've just inherited a house, but realise it isn't sellable in the current climate.
Good luck.