Feeding Alison's Pig

Hi Everyone.
Been trying to pluck up the courage to do a MFW diary for the past couple of years. Like many of you Covid has played havoc with the finances through most of 2020 and this (as well as a few other things) has given me the impetus to get going.
Not a lot to start with other than some basics (I will provide more background in future posts). Moved house in 2015 and secured a mortgage of £191,000.00. Have been overpaying where possible and as of the beginning of October 2020 the mortgage stood at £140,223.95. Today (11/11/2020) marks the beginning of a new four year quest to reduce the pig of a mortgage to £70,000.00. I am putting in place a few things to achieve this but will require guidance from yourselves please in the Jedi like ways of MFW.
Mortgage payment is currently £976.00 per month on a Halifax 1.84% 5 year fixed term ending in July 2024. Overpayments are capped at 10% of the mortgage balance in any year.
I'm chuffed - I've started a diary and I'm on the road again. Happy Days!!!
Thanks for reading.

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Comments

  • FatJock
    FatJock Posts: 196 Forumite
    Name Dropper First Post Photogenic First Anniversary

    Got a quick break from work to update and provide a little background.

    I was an avid (some might say obsessive) fan of MSE back in my DFW days. As a result of the tips, tricks and support I received on the forum, as well as some hard work I cleared all the money I owed (£30k) and declared myself debt free in November 2008. I still visited MSE but drifted away as the business took off and family life took over.

    Life has had its ups and downs, but I remained debt free, apart from mortgages until Covid hit, resulting in no paid income for seven months. This coupled with emergency dental work (£3.5k) has pushed me into £5,200 of cc debit and no savings.

    I am planning to tackle the CC and balance transfer to another one reducing the amount of interest being charged monthly.

    I have two mortgages currently.

    ·         One BTL on 2.99% at a monthly cost of £170. House is about to be re-let at an improved rental rate. Outstanding balance is £85,500

    ·         Personal mortgage (family home). Purchase in 2015 for £255k with a 25% deposit. Initial mortgage was £191,250.00. Current rate is 1.84%. Current balance is £140k and the house is valued at £370k so LTV is very healthy at the mo. The mortgage is in my name only. I take care of that and the council tax and insurances whilst the OH takes care of the household bills.

    My plan to tackle the mortgage is as follows:

    ·         OH is going to contribute £350.00 to the mortgage from Jan 2021. This will cover the daily interest on the mortgage (about £8.00 per day) leaving about £100 to go off the principle.

    ·         This means (in my mind) the £975 mortgage payment goes solely against the principle. I also intend to add additional monthly payments bringing the total amount to £1,300 per month.

    But I do have a question – as I will be receiving rental income from the BTL, does it make any sense to put some of that income off my own mortgage (once I take BTL costs & tax into consideration) and if so should I do it on a monthly or annually basis?

    I can also at some point sell the BTL and release the equity (currently about £85k), pay whatever fees and taxes are owed and use the remainder to effectively clear the mortgage on my own property. This will only work when I hit my £70k target.

    Hope this makes sense.

    Thanks for reading…


  • longway2go
    longway2go Posts: 1,006 Forumite
    First Post Name Dropper First Anniversary
    Hi,
    In relation to using the rental income to pay your mortgage, 1 consideration would be the rate on the mortgages. When you talk about when to make the OPs this would depend how your interest is calculated, most are daily and if this is the case the sooner the better but check with your lender. 
    We are in a similar position with the mortgage on our home being just over 140k and having a btl in the background. I have considered selling it to pay a lump off my mortgage but personally for me I think it would be good to keep it for retirement income if possible.

    Mortgage Aug 2019 161,000 :eek::eek::eek:Nov 2019 156,500:T Jan 2020 153,122:T, Apr 2020 149,500, Apr2021 139, 675, Oct 2021 136,823, Dec 2021 136,120🙂EF 0/12,000 (0%)😕 (5062.44 was ERC), Jan 2023 128,650. Our Mortgage is never going to be as high as it is today. :jOnwards and downwards to a better life for our family. :jJust keep swimming
  • caeler
    caeler Posts: 2,605 Forumite
    Mortgage-free Glee! Photogenic Name Dropper First Post
    Good luck! 
  • skint_spice
    skint_spice Posts: 12,640 Forumite
    Name Dropper First Post Photogenic First Anniversary
    Good luck from another scot x
    Mortgage End Date: Apr 36/Aiming for Aug 28/Current Sep 35

    Mortgage OP 2024 £2250/7000

    Mortgage balance: £52660

  • Welcome with your new diary. 
    Mortgage start date Dec 2015 - $64,655.00
    Mortgage end date Dec 2045 - NOT!!!!
    Mortgage balance  - $4600.00
    Business Savings $43,310/100k
    Hope to be mortgage-free by end of 2023 
  • Looking forward to following your MFW journey. You sound very motivated and on top of everything - I'm sure your impressive DFW experience will stand you in good stead.
    Mortgage overpayments 2018: £4602, 2019: £7870
    Mortgage overpayments 2020: £4620
    Mortgage 2017 £145K, June 2020 £112.6k:o
  • yogavibes
    yogavibes Posts: 99 Forumite
    First Anniversary First Post Name Dropper
    edited 12 November 2020 at 6:47PM
    Good luck with your MFW journey - you have made great in roads on paying off a chunk so far.
    MFW #69 Mortgage remaining Jan 2021 £221,644; Jan OP £1000;
  • FatJock
    FatJock Posts: 196 Forumite
    Name Dropper First Post Photogenic First Anniversary
    Thank you all for your kind comments and warm welcome.
    I am glad I started the diary which has given me a focal point to keep me on track. Covid and the resulting (free)fall in income meant I had to stop the over payments and take advantage of a mortgage holiday otherwise I suspect the balance would be about £4-5k less than it is now. I cannot grumble as other folk are in much more dire situations than we are. 
    I have also been very focused over the past few months about clearing our unwanted items and selling on the big bad bay of E and the tree of Gum. Setting an initial target of £500 which is to be used towards a family holiday in 2021. We have exceeded that and I've reset the target for £1,000. Keeping the roof over our heads and food on the table has always been the priority for me but I also want to have quality family time together. Selling our unwanted items means a holiday will be as 'cash neutral' as possible in this endeavor.
    At some point I will sit down and work out the minimum spend I have per month (mortgages, taxes, insurances, subscriptions etc.) but I am already looking at ways to trim the fat and save a few pennies here and there (without trying to be Scrooge McDuck about it).
    Weirdly, this new found focus has also given me the shove I need to look at my fitness and do something about that also - "Fat, Stupid and Lazy is no way to go through life..." to paraphrase Dean Wormer.
    I'll provide an update at the end of the month. In the meantime dear reader - stay healthy.

    Thanks for reading.


  • couth
    couth Posts: 60 Forumite
    Photogenic First Post Name Dropper
    edited 15 November 2020 at 10:12PM
    @FatJock found your diary. You sound organized and determined, well done! You've also given me ideas re ebay-ing some stuff to pay for some of the holidaying next year, thanks for that!

    And good luck with the fitness efforts! I started running in 2020 and even though I'm very slow, I managed to run over 300km so far, improved my fitness scores (there's an app for everything these days lol) and shed some weight in the process. 
  • FatJock
    FatJock Posts: 196 Forumite
    Name Dropper First Post Photogenic First Anniversary
    @couth - thanks. I'm terribly bad at running despite having completed half marathons, wolf runs and a tuff mudder in the past - I hate running   :)  . Fitness and weight loss are my goals but I have gotten into a lazy rut which I must get out of.
    On the ebay front: remember to factor in their fees as well as fees from paypal and the fees they take from your postage costs. 
    Good luck.
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