Lolu's Mortgage Free odyssey

misslolu

Finally paid my friend for the hotel for the birthday trip, so that's now done and dusted. Since i'm saving up for the service charge monthly and leaving the invisalign loan payment to tick over, i'm now able to start overpaying my mortgage again!

I'm sure i'm not the only one who's been watching with bated breath as the interest rates have gone haywire. My fix ends in May, but there's just no way i'll be able to fix at 6+%. Technically I can afford it, but the amount of money wasted would be absolutely criminal. In a few weeks i'll be able to speak to a broker and get an idea of my LTV and potential interest rate, but it definitely looks possible that I won't fix again until next year when the rates are forecasted to start coming down. Until then i'm happy to go on a tracker, current rates are 3.5% with the option to move to a fixed rate if I feel uncomfortable. So i'm feeling a lot more comfortable starting to pay off the mortgage again to get the numbers down as much as possible.

misslolu

Since my last message i've overpaid the grand total of....£8.02! I usually use survey money for this and have been super busy so haven't done much of that lately. I have a few payments on the way so i'm hoping I can push that number up a bit more. 

I'm a bit worried about my remortgage at the moment. My deal ends in May so i'm not pressed for time right now, but i'm very cognizant that my CC debt is at £3kish and I also now have a shiny loan for my invisalign for about £2800. My salary has increased since my original mortgage so i'm not super worried about affordability but i'm worried that maybe my £6k in debt may count against me. I'm also not planning to stay with my current lender, their rates are too high and their customer experience isn't the greatest. Hopefully, anyone who's remortgaged recently can give a few tips on that.

Apart from that everything seems to be ticking along nicely. Not able to save much as i'm trying to pay off my debt, but i'm still continuing to invest my £300 a month. Relationship is going great, we've spent a lot of time together and all the issues i'd thought i'd have with having another person in my space have frankly disappeared. I'm starting to see my place as a potential place to start our family and i'm really quietly excited about it. We've been really good friends for ages so it seems like we've been together for a while and I think at this rate we could be engaged by next year 🙈. But I won't get too far ahead of myself.

savingholmes

Sounds exciting on the relationship front. 

On the debt side of things - I'd focus on reducing your CC and loan(s). They like to see low commitments so any debt is a concern but not necessarily a deal breaker. It all depends on your income vs outgoings - and even on how long you fix for I think.

misslolu

savingholmes said:

Sounds exciting on the relationship front. 

On the debt side of things - I'd focus on reducing your CC and loan(s). They like to see low commitments so any debt is a concern but not necessarily a deal breaker. It all depends on your income vs outgoings - and even on how long you fix for I think.

I'm thinking a 2 year fix for now since rates are quite high and luckily I have a decent amount of disposable income so I don't think affordability will be an issue. I'm really pushing to pay off my CC as the 0% ends in Feb and I definitely don't want to start paying interest on it. What I may have to do (which i'm not ecstatic about) is just use my savings to pay it off and have a clean slate. It wouldn't wipe me out, but I'd only have 3 instead of 4 months of expenses, plus i'd have less in premium bonds.

I'll get an appointment next week with the broker and see what they have to say.

gillynomad

I'm in a similar position with having to remortgage in April...I've had to make an effort to not worry too much about the news at this point in time and just focus on my finances! I'm potentially looking at a 2-year tracker due to the interest rates plus with my current lender there's no exit/overpayment charges on trackers. So I could then switch to a fixed rate if they become a better option later in the year...but getting broker advice is a smart thing to do. 

I would also definitely try and lower your CC/debt rather than overpaying (i.e set a target of reducing it by 50% etc. or put half any extra cash you have to CC and half to mortgage). Hopefully the broker can help with advice on that too. Everything feels like a wrong decision these days even when money going to either would be good!

savingholmes

If your savings would wipe out debt and leave spare they will be less concerned

Aimingforthegoodlife

Great news on the relationship! I am pretty sure our mortgage comes up next year too, its hard to know what to do for the best! Also my hubby has gone self employed so I am not sure he will even be eligible now! Definitely find a good broker!

misslolu

gillynomad said:

I'm in a similar position with having to remortgage in April...I've had to make an effort to not worry too much about the news at this point in time and just focus on my finances! I'm potentially looking at a 2-year tracker due to the interest rates plus with my current lender there's no exit/overpayment charges on trackers. So I could then switch to a fixed rate if they become a better option later in the year...but getting broker advice is a smart thing to do. 

I would also definitely try and lower your CC/debt rather than overpaying (i.e set a target of reducing it by 50% etc. or put half any extra cash you have to CC and half to mortgage). Hopefully the broker can help with advice on that too. Everything feels like a wrong decision these days even when money going to either would be good!

Every decision DOES feel like the wrong decision, you've got that right. Who's your lender? I've been looking at Natwest's tracker as it looks to have the best rates. I've just paid £1700 towards the debt which has got me in the low 2k range, had the money in an easy saver that needed £16 in interest over the year. Hopefully though, with the next few payments, I'll get it low enough to be negligible. I do think i'll be overpaying the CC for now though, it feels like a bit of a noose around my neck i'd like to get rid of.

savingholmes said:

If your savings would wipe out debt and leave spare they will be less concerned

Do they ask for how much you have in savings? I could definitely cover both my loan ad CC with my savings, so if they take that into account I should be fine.

Aimingforthegoodlife said:

Great news on the relationship! I am pretty sure our mortgage comes up next year too, its hard to know what to do for the best! Also my hubby has gone self employed so I am not sure he will even be eligible now! Definitely find a good broker!

Thanks!! I have a friend that just bought as a self employed person, i'm sure there are mortgages he could use.

savingholmes

I went with landc from here link. They asked re savings 

gillynomad

misslolu said:

Every decision DOES feel like the wrong decision, you've got that right. Who's your lender? I've been looking at Natwest's tracker as it looks to have the best rates. I've just paid £1700 towards the debt which has got me in the low 2k range, had the money in an easy saver that needed £16 in interest over the year. Hopefully though, with the next few payments, I'll get it low enough to be negligible. I do think i'll be overpaying the CC for now though, it feels like a bit of a noose around my neck i'd like to get rid of.

My lender is Nationwide. 

That's awesome though. Yeah sometimes the mental win makes it the better decision!