The second hurdle - Nichelette v the huge mortgage

Nichelette

Hello! 

I thought I would start a new diary as we attack the second phase of our mortgage...

In Jan 2019 we bought our first (lovely, but little) house for 320k with a 10% deposit. South east prices . With the fees we began our journey with a mortgage of £289,500 over 30 years. To be honest, whilst it was affordable to us, the thought of owing so much made me tetchy. In March 2019 we began attacking the mortgage, and after trying our best we've been able to overpay by exactly 30k. 

Yesterday we were able to move on to a new three year deal effective from the 1st. We currently owe £246,966, and with a bit of good fortune due to the recent bounce (not that I like increasing prices, but that's another issue) have reached 75% LTV. This means we have gone from paying £1161 a month to £919 which is very welcome, as come early April we should be joined by our first little person (unless bunnies count?) which will be a massive change. Having a baby during a pandemic isn't ideal, but at 34 & 35 time wasn't really on our side. The plan was to get to a point where we could reduce the mortgage by a good chunk before being affected by childcare, but best laid plans and all that. 

We are very fortunate to both work in secure jobs. As much as any job is nowadays anyway. My ancient car died recently so we replaced it in January with an ex demo one which we own outright, and should hopefully last us a long time. I'd always wanted a black Golf and finally treated myself. It's so lovely .  

We currently owe 5k on a 0% credit card. The rate changes in July so I'm building up the money to pay that off in June by stashing it in premium bonds. I'm also building up an emergency fund again as we were chucking everything at the mortgage to get to the 75% band. Any overpayments we make are a sort of emergency fund anyway as we can use them to take payment holidays if we ended up in a situation where we needed to. 

The amount we owe is still more than I would like, so this diary will track my journey to reducing it. I'll do an SOA shortly, but this is where I record my overpayments: 

https://docs.google.com/spreadsheets/d/11fXpW2AxAFC5v_8kMQtj9R_qJqgCndrM/edit#gid=912173961

I'm going to do some projections in time to factor in the new addition as I'm not sure exactly how much we'll be able to overpay now. The plan is to move in the next 3-5 years as we'll definitely run out of space in the longer term. It's a shame because I really do love it here and there is lots I will miss.

Anyway, please feel free to follow my journey

Nichelette

SOA at 22.10.2

Statement of Affairs and Personal Balance Sheet

Household Information

Number of adults in household........... 2

Number of children in household......... 0

Number of cars owned.................... 2

Monthly Income Details

Monthly income after tax................ 2028

Partners monthly income after tax....... 2217

Benefits................................ 0

Other income............................ 0

Total monthly income.................... 4245

Monthly Expense Details

Mortgage................................ 919

Secured/HP loan repayments.............. 0

Rent.................................... 0

Management charge (leasehold property).. 20

Council tax............................. 170

Electricity............................. 36

Gas..................................... 36

Oil..................................... 0

Water rates............................. 30

Telephone (land line)................... 0

Mobile phone............................ 22

TV Licence.............................. 13

Satellite/Cable TV...................... 0

Internet Services....................... 25

Groceries etc. ......................... 150

Clothing................................ 40

Petrol/diesel........................... 70

Road tax................................ 15

Car Insurance........................... 40

Car maintenance (including MOT)......... 15

Car parking............................. 0

Other travel............................ 0

Childcare/nursery....................... 0

Other child related expenses............ 0

Medical (prescriptions, dentist etc).... 0

Pet insurance/vet bills................. 25

Buildings insurance..................... 10

Contents insurance...................... 10

Life assurance ......................... 0

Other insurance......................... 0

Presents (birthday, christmas etc)...... 50

Haircuts................................ 0

Entertainment........................... 400

Holiday................................. 0

Emergency fund.......................... 0

Total monthly expenses.................. 2096

Assets

Cash.................................... 0

House value (Gross)..................... 330000

Shares and bonds........................ 1500

Car(s).................................. 17000

Other assets............................ 0

Total Assets............................ 348500

Secured & HP Debts

Description....................Debt......Monthly...APR

Mortgage...................... 246966...(919)......1.71

Total secured & HP debts...... 246966....-.........-   

Unsecured Debts

Description....................Debt......Monthly...APR

Credit card....................5782......130.......0

Total unsecured debts..........5782......130.......-  

Monthly Budget Summary

Total monthly income.................... 4,245

Expenses (including HP & secured debts). 2,096

Available for debt repayments........... 2,149

Monthly UNsecured debt repayments....... 130

Amount left after debt repayments....... 2,019

Personal Balance Sheet Summary

Total assets (things you own)........... 348,500

Total HP & Secured debt................. -246,966

Total Unsecured debt.................... -5,782

Net Assets.............................. 95,752

Created using the SOA calculator at www.stoozing.com. 

Reproduced on Moneysavingexpert with permission, using other browser.

jenni_fer

Congratulations on the little person!
Good luck for the second phase of your mortgage free journey!
The one thing that has helped us on our way is that whilst childcare is crazy expensive, we got used to not having that amount of cash and then were able to divert that figure to the mortgage as the costs eventually came down.
Don't under estimate the cost of being on mat leave, but do take as much time as you can, you won't regret having to pay a mortgage for an extra couple of months because you took a few more weeks off to enjoy your baby while they were small.

SandyShores

Good luck on your new journey Nichelette.  You are doing so well.  Have just subscribed and look forward to following along

Brindlebabe

Ah - second phase! Very exciting. Congratulations on your pregnancy! My husband and I are (as of this week) the same ages exactly as you and yours, so you've made me feel as though the clock may be ticking a little.. But I've only recently decided that I might want them, and we definitely have a bit of getting life sorted out (including money wise) before we're ready so it will just have to tick a bit longer! It seems like the world's wives are all expecting at the moment so at least lots of other peoples' babies to enjoy! 
Also congratulations for getting to the 75% LTV bracket! I guess that takes the stress of a bit because the minimum payment goes down, so with uncertain costs that babies bring, and the financial stress of mat leave you've got some more flexibility. Well done you! 
Will continue to follow with interest. 
Much love
Bb x 

twinklie

So very exciting. Congratulations on your womb gremlin (sorry I heard that phrase for the first time this week and have been dying to use it). I totally agree, take as long for maternity leave as you can/want to. I took a loan out so I could extend the time off with my second and don't regret it for a second. Money well spent I'd say. I also went back part time which for me was totally the right decision, but I have friends that went back full time and prefer it that way. 
We owe a bit less than you, but our on a similar trajectory I suspect. We are due to remortgage in 3 years time, with an approximate LTV of 70% so hopefully our minimum payment will come down by then. But who knows with Brexit in the offing. I shall follow your journey with interest. 
Good luck. 

DayDreamerandGeneralWaster

Womb gremlin??! Where on earth did you hear that 😂

twinklie

DayDreamerandGeneralWaster said:

Womb gremlin??! Where on earth did you hear that 😂

I don't even remember now, but it's had me giggling all week. I keep wanting to call my children womb gremlin's but they are both autistic and don't like it if I call them anything other than their proper names. So I'm well chuffed I finally got to use it.

MFdreamer

🤣 womb gremlin! 
Congrats OP and good luck with your plans! 

Nichelette

Thanks everyone . Sorry for posting and running, not a lot has been happening of late! 

Baby is doing well (love womb gremlin haha) and last month we found out he is a little boy (like I'd always thought!). I'm almost under 100 days to go and I'm definitely on the countdown and very impatient for him to arrive. Pregnancy seems to agree with me and I've been very fortunate with how I'm coping physically, lack of sleep excepted. This year has been so rubbish with covid and it's nice to have something happy to look forward to. My husband felt him move for the first time a few weeks ago and it was so lovely. He lost his mum a year ago and having something nice has, I think, helped him with some of the pain, though we both wish she was here to see for herself. 

@Brindlebabe We felt like that too. We got lucky 11th month of trying, though I think that was partly because I was a bit blasé about it as the females in my family seem super fertile and I was convinced it would happen quickly. I'd honestly started to wonder if I was infertile because just coming off the pill and not tracking dates didn't work. It happened quite quickly once I paid attention to dates, so if you do try in time I'd focus on them. It was never a full gone conclusion that we'd have any at all, but I've very much warmed to the idea now and am very excited for him to arrive. 

Financially we're very fortunate because I get 6 months full pay, followed by 3 months statutory then 3 unpaid, plus I can do up to 10 keeping in touch days and they'll bump my pay up to a full day if I do them within the last 6 months when I'm on lower pay. Since finding out I've been very strict with my holiday and will go on maternity leave with (hopefully) 20 days left. I will also accrue 'nearly a years worth whilst I am away, so I'll 'technically' be going back after 10 months, but using the 20 days I've saved, and the nearly years worth so I get full pay for months 11 & 12. The timing is also good as I'll go back in April and get a whole new year worth of holiday in May as it's based on my birthday month. 

We were due to look at a nursery on Wednesday but that has been moved to Jan as they're low on staff due to people self isolating. That will be a huge outgoing but we do at least qualify for the tax free childcare. I will be going back to work full time as I can't do my job part time, and I do already feel a huge amount of guilt about it. I have resolved to keep going because I know in the longer term being financially stable will benefit him too, and to be honest we will need my wage to move to a bigger place in time. The nursery seems lovely and it backs on to a farm so the kids get to meet the animals and things. My gut feeling is that it's a nice environment and will ease my guilt a bit when we can see it. It seems strange to be looking at a nursery when he's not even here yet, but their waiting list is usually a year plus so it is the right time really. 

Mortgage wise, mentally it's so good having the monthly payment under 1k! I'm still ploughing money into premium bonds and will be fine to pay off the credit card when the 0% ends. The balance has gone up a bit where I've used it to buy baby bits, but I have all the big things now so it should only be smaller things left to go. We've made a couple of small overpayments but that's it. We get paid tomorrow so I've overpaid just shy of £200 from my monthly sweep of accounts. We unexpectedly ended up getting the fascia on our house painted so that was £400 gone that I hadn't budgeted for as I didn't think it would be possible until spring, I do think it's money well spent though because it was peeling really badly where I don't think it had ever been done. It now looks lovely and the wood is protected again so I'm happy. 

We've hit peak expensive bills time and have the following in December/Jan time:

• Street management fee - £140
• House insurance - expecting at least £130
• Bunny vaccine & dental - £275
• My car insurance - £240ish, thankfully I did the tax for 6 months the first time to shift that to summer...
• 6 monthly water bill - £180ish (our water bills are killer)
• Xmas
• Nursery deposit in Jan is £200! 

Anyway, in happy news we're nearly at the council tax free months and soon once those have passed we'll be in a position to overpay more. Finally, I've signed up to the MFW challenge again. My projections suggest we'd be able to overpay 23k this year, but I'm being cautious with baby and am aiming for 18k. 

I think I've rabbited on enough now so I'm going to sign off and try not to leave it 2 months before I post again. I hope you all get to enjoy a nice, safe Christmas .

savingholmes

Great news glad you are doing well and posting again