Financial Freedom through Mortgage Freedom!

financialfreedomxo

LadyGnome said:

As a general rule it is better to pay off smaller amounts more often. If you save for 10 months then pay off £1000 you have paid 10 months interest on that £1000. If you pay off £100 per month for 10 months you will be reducing your interest bill month on month as the balance drops. 

Saving up lump sums can be the right option when your financial situation is precarious/ variable; if savings rates are higher than mortgage rates (if you can save the money at 4% and have a mortgage at 2%) or where OPing is in anyway restricted. 

I never thought of it this way, but it makes a lot of sense. Thank you so much! 

South_coast

financialfreedomxo said:

South_coast you are a Godsend!

Ooh, I'm blushing now 😳!

financialfreedomxo

South_coast said:

financialfreedomxo said:

South_coast you are a Godsend!

Ooh, I'm blushing now 😳!

LOL. you really are though! Based of your advice and speaking to Natwest. I just made my first over payment of the year of £999.99! *happy dance* YAY to mortgage freedom.

financialfreedomxo

Updates:
1. I just made my first over payment of £999.99 today! 
2. I have calculated that I need an emergency fund of roughly £7200 for 6 months. Tonight I am going to discuss this with my husband and make a formal plan as to how we can start putting into this. 
3. We will also be discussing our pension plan. 
4. After paying off this house, I'd love to rent it out and move into a homestead that as self-sufficient as possible. I really don't want to take out a mortgage ever again. Although it's a bit of a stretch I have vowed to buy it debt-free. So maybe starting a small fund to just have it as a goal I can see and putting in the odd fiver because it helps me a lot with achieving the goal. 

financialfreedomxo

I've been thinking a lot about freeing up as much money as I can. 
I have also been thinking about paying my council tax in a lump sum next month. I think we owe about £900ish on it. Why pay in a lump sum? Well,  it means every month we will have £140 more to put towards the over payment and the only bills we will have remaining will amount to less than £630 a month incl. the mortgage. Is paying the council tax in a lump sum a wise decision? Hmmmm. Or should I just use the money to over pay on the mortgage? 

bethjames5681

financialfreedomxo said:

I've been thinking a lot about freeing up as much money as I can. 
I have also been thinking about paying my council tax in a lump sum next month. I think we owe about £900ish on it. Why pay in a lump sum? Well,  it means every month we will have £140 more to put towards the over payment and the only bills we will have remaining will amount to less than £630 a month incl. the mortgage. Is paying the council tax in a lump sum a wise decision? Hmmmm. Or should I just use the money to over pay on the mortgage? 

There's really no benefit to pay your CT off in full. There's no interest applied to it. Just put that money aside in your emergency fund, or overpay your mortgage.

South_coast

You could get it re-calculated to pay over 12 months instead of 10, as this would lower the monthly payments and free up cash each month. Depends whether you like the bonus of not paying it in Feb and March though

financialfreedomxo

bethjames5681 said:

financialfreedomxo said:

I've been thinking a lot about freeing up as much money as I can. 
I have also been thinking about paying my council tax in a lump sum next month. I think we owe about £900ish on it. Why pay in a lump sum? Well,  it means every month we will have £140 more to put towards the over payment and the only bills we will have remaining will amount to less than £630 a month incl. the mortgage. Is paying the council tax in a lump sum a wise decision? Hmmmm. Or should I just use the money to over pay on the mortgage? 

There's really no benefit to pay your CT off in full. There's no interest applied to it. Just put that money aside in your emergency fund, or overpay your mortgage.

Hi bethjames5681, you're right. The payments won't change as there's no interest so really there's no benefit apart from the mental thought of "one less bill". I'll see how I feel at the end of the month though. 

financialfreedomxo

South_coast said:

You could get it re-calculated to pay over 12 months instead of 10, as this would lower the monthly payments and free up cash each month. Depends whether you like the bonus of not paying it in Feb and March though

I love the months when I don't pay it lol

financialfreedomxo

Quick Update:
On 31 July I set up a regular over payment of £150. It's not a huge sum but over time it will garnish over 3 years off our mortgage. On top of this, we are making a regular income from selling on Facebook Marketplace. All income from there goes straight to the mortgage, so that's between £100-£400 pcm (hopefully this will grow). We usually put it in a jar and at the end of the month put it in the bank and pay on the mortgage. 

Also, we have now started an Emergency Fund. As mentioned before, the goal is £7200. We plan on putting in a minimum of £300 pcm into the emergency fund. I have also decided to buckle down on my budgeting because I'll have a budget when I go out shopping and not stick to it. As such, I'm hoping to but a wallet with the envelope system inside it on Amazon. Hopeful this will help because I'll general only walk around with the cash I need for what I need to buy.

On another note, although I am making a small income on eBay, I am still looking for a job. Hopefully I get one soon where I can work part time or work from home so I can still look after my little ones. It's not easy on one income. So here's hoping it will all work out soon.