Green Bean's Mortage-Free Dream

This is a bit premature but I've been lurking in the background on this forum for a while and I'm hoping that setting up a diary of my own will help keep me motivated and accountable for what feels like a very long slog ahead. 

I'm 21 and have just started by first proper (post-uni) job, which pays 23k pre-tax, and I'm saving up (along with dp who is on a similar income) with the aim of self-building our own home soon. 

We have the plot and planning permission, and are currently living in a static caravan on site, which helps reduce our outgoings at the moment (although it took an awful lot of our savings to get to this point!). 

The aim currently is to get a mortgage by Christmas, and therefore max out our savings by then, but getting a self-build mortgage seems especially complicated and my very new job and fixed term contract makes it even more difficult, and we're not sure if anyone will actually lend to us. We are going to see a mortgage broker nearer the time, but we are waiting on formal transfer of ownership of the land (with deferred payment to family) and then have some investigations to do to get a better idea of costs. 

It will be a modest 3 bed rather than some grand-designs type mansion, and our current estimates are for it to cost roughly 240k, including paying for the land and a 10% contingency fund. This estimate is (I think) quite generous with how we worked it out, so hopefully it will come in under this, but I want to prepare for the worst.

If we miraculously find someone that will lend on my new and fixed term contract (with 34 months left on it), then we could probably get a joint mortgage of around 220k, leaving a 20k shortfall.

We are both saving but I am treating this as a solo goal/diary because I find it helpful to set some smaller goals I have complete accountability for.

We currently have savings of £18,600 so need to save an additional £1,400 by then but I'm hoping to put away as much as possible to minimise the mortgage and get to mortgage free slightly quicker! We are planning to overpay whenever we can once we have the mortgage, but taking out a smaller one to begin with would be ideal. 

My take-home pay should be  currently £1537 and I contribute £250 pcm for joint expenses, leaving me with £1287. Although this seems like loads, my travel to and from work is £6 a day (around £100 pcm), and we are also attempting to save for our wedding next summer (although I've already paid half the catering, and for some bits and bobs like bridesmaids dresses and some flowers). 
I'm hoping to save £1000 per month for the house for the next two months at least, which would leave me £187 to cover car insurance, fuel, clothes, entertainment, gifts etc. I've recently been frittering away far more than that, especially on wedding bits and a new work wardrobe so I'm hoping this should really focus my mind and halt my spending. 

I am provisionally planning on splitting the amount up as follows:
Car expenses savings account - £50
Currys repair plan- £10 
Phone plan (SIM only)- £10
Non-work travel fuel- £30
Other spending- £87

If anyone has any tips, especially about self-build mortgages or about staying on track/motivated when I can only save a tiny fraction of my final goal please let me know! :) 
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Comments

  • South_coast
    South_coast Posts: 4,912 Forumite
    First Anniversary First Post Name Dropper Photogenic
    Ooh, this sounds very exciting!!! No tips, but I'm intrigued what the £10 to Currys is for? If it's an extended warranty could you put that money aside instead and self-insure?
    Mortgage start: £65,495 (March 2016)
    Cleared 🧚‍♀️🧚‍♀️🧚‍♀️!!! In 5 years, 1 month and 29 days
    Total amount repaid: £72,307.03. £1.10 repaid for every £1.00 borrowed

    Finally earning interest instead of paying it!!!
  • Ooh, this sounds very exciting!!! No tips, but I'm intrigued what the £10 to Currys is for? If it's an extended warranty could you put that money aside instead and self-insure?
    It is a warranty and I think putting the money aside to self insure instead is a good idea but it's currently broken so I'll try to send it off to be mended asap and then will look into cancelling after! 
  • powerspowers
    powerspowers Posts: 1,111 Forumite
    First Anniversary First Post Name Dropper
    Oooh exciting!! I’d love to self build and well done for being so committed already. 

    I think you will do well as you are have a clear goal. When buying a house, I found it useful to know where our priorities were (space over appearance) and that was good when curveballs came our way- it made it easier to make a decision quickly. 

    We also got married this year and again picked a few things to prioritise (nice food and band) which helped resist temptation for things like table decs. We did a lot ourselves and most items we bought were secondhand. 

    Good luck with it! 
    MFW 2021 #76 £5,145
    MFW 2022 #27 £5,300 
    MFW 2023 #27 £2,000
    MFW 2024 #27 £1,075 /£3,600


  • Thanks @powerspowers I'm hoping a clear goal will help, but your tip about being really clear on your priorities will be useful. I think I'm probably hoping that magically I'll get everything on my list of wants (both for wedding and for the house) so I spending some time working out exactly the order of priorities might help me clearly see what to focus on and what could maybe be cut out of the budget a bit more. 
  • Welcome GBD! A self-build sounds really interesting.

    We bought our house a few months before our wedding, which mean that money was quite tight and we probably dropped a few "nice to haves" for our wedding day, but we still had a lovely time and we don't look back and feel anything was missing.
    "You won't bloom until you're planted" - Graffiti spotted in Newcastle.

    Always try to be nice, but never fail to be kind - Doctor Who

    Total overpayments in 2021 - £901.28!
  • I've been absent a little while, but have been struggling to stay motivated (I'm in awe of some of the diaries I've read which go on for years!). I spent quite a bit on wedding stuff almost as soon as I'd started this thread and I was too embarrassed to come back. I also realised I'd forgotten to account for bits like prescriptions. 

    I've decided I want to try a different approach to try and focus on the savings I've made rather than shaming myself for spending, so I'll be starting with a new, increased monthly  budget which then I can move into savings as I go, giving me a happy hit each time I avoid spending and can move that money across into the house fund. 

    Our savings goal has also moved back because of my probation period, so we are aiming to get a mortgage in April next year- giving me 6 paychecks in which to save and an updated goal of £24,000. 

    To reach this I'm going to have an updated monthly budget of £310 and I'll aim to save £75 of it either by spending less or through extra earnings (eBay selling mainly is all I can think off, although I'll do some MSE thread research!). 

    I spent some of my savings so the total has actually decreased since last month, but I'm going to focus on my new shiny aim of £75 a month, which I'm kick-starting with a saving of £5 today because I'm working from home and haven't had to drive in: it begins!! 

    October: £5/£75
  • I really nearly bought a candle today, but put the money in my savings, making a (very small) £3 win. This brings me to the grand total of £8 out of £75 so far- I think I'm going to try to dig some things out of the attic to list online this week (although I've been intending to do this for weeks and it hasn't yet happened...)
  • savingholmes
    savingholmes Posts: 27,324 Forumite
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    Well done on coming back and re-setting your goals - and perhaps being more realistic. I think any mortgage company is going to want to see that you can afford the mortgage. What term are you going for?
    Achieve FIRE/Mortgage Neutrality by mid 2030
    1) MFW Nov 21 £201,999 with 237 payments to go - now £184,341 Equity 26.26%
    2) Spend on handyman & external building works & new patio door £11.9K
    3) CC £3.7K on 0% spends card but offset by £34K savings (part EF, part future home improvement)
    4) Mortgage neutral by June 2030 AVC £9.6K/£127.5K AVC target 7.5% value @15/4
    5) FI Age 60 annual income target £13.7/30K 45.7%
  • Thanks @savingholmes :smile: 
    It feels like a tiny goal, but you're right in saying it's more realistic, which is better than a lofty goal I'll never reach! 
    We'd love to have a shorter term, but it looks like we will be struggling to borrow what we want so will probably get a 25 year term to start with. However, we have a meeting with another mortgage advisor tonight so will hopefully have a better idea after that. I'm quite excited to find out what our options are, although the research I've done so far hasn't looked great for us. 
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