Mortgage free dreamer

Joe___2

Hi All,

I've often visit the forums and dream of being mortgage free before I am 40-45, over the last few years I've really concentrated my efforts on clearing what little debt we have an focus on overpaying as much as I can.

Bit of background - I'm 32, earn approx £30k p/a (full time)
OH - Also 32, earns approx £11k p/a (part time)

Bought our first house in 2012 for £100k, sold Aug 2015 and lost £4k BUT thankfully I had overpaid and this lessened the blow, current house was bought for £95k.

Outstanding mortgage - £77,193.43 as of 17/11/21 (1.99% fixed until April 2026) monthly payment is £400 of which £106.90 of that is an overpayment.

We have 2 boys in primary school, so school clothing/shoes/dinners all eat into our already small household income.

I have been yo-yo'ing about moving and getting a bigger house and mortgage of course, but at the end of the day our little 3 bed terrace is big enough for what we need, it has no driveway and small front/rear gardens but at least we've got one, right?

The first part of my plan is to clear my small credit card balance (£450) by March 2022 which will allow me to add another £100 onto my overpayment every month, following that I have a loan ending in Feb 2023 which will free up a further £113 a month.

Recently I have reduced our outgoings further by changing our cars and saving £50 a month on finance, £10 a month on insurance, plus the savings on tax and fuel...

Summary - to have surplus cash from March 2022 onwards to spend on US for a change, keep the overpayments up and drive our bills down as low as possible, we are not people who try to 'keep up with the Jones's' and try to live a life we are happy with, within our means, we are not against debt as it is a useful tool, but we borrow as little as possible and pay back as quick as we can.

Looking forward to finally having somewhere to log all of this, as I have always managed all the finances the OH doesn't really understand it all and turns off when I start talking! :-)

dark^knight

Sounds good...wishing you the best of luck.

rugbymadfamily

Hello! I'm another one who's other half turns off when I talk finances! Sounds like you ha e a good plan in place.

For what it's worth from a stranger on the internet, sounds like you've made the right decision re house. It works size wise and financially, so stick with it, nothing to say that cant change in few years time if your OH starts working FT when kids are older. I do sometimes think how nice it would be if we lived somewhere bigger and more glam...but then I think how much higher mortgage would be (and it's already big enough living in London lol) so decided I'm happy with what I have!

powerspowers

Good luck on your mortgage free journey! 

I agree, buying within your means gives you are a fighting chance at getting it paid off. There is pressure to buy bigger and keep upgrading, and then to keep renovating/replacing/upgrading things for the sake of it! We’ve gone along this road to some extent but trying to get a balance. 

happymum37

Good luck!!
Brilliant mind set. 

We are surrounded by friends increasing their mortgages and going until much bigger houses...and at the moment we just can't.  The thought of paying off a mortgage into retirement is not for me.  I want mine gone and ideally to save a pot to get my kids on the ladder. 

Do you use too cash back? Totally addictive. I have earned 40 quid in 2 months but i only got strict about 2 weeks ago using it ..and that goes straight into the mortgage.  Every little helps

Coffeekup

Good luck on your journey ....
If the house suits you and your family stay there. My 3 brother's have all bought a bigger houses at least twice and 2 of them have "bought/upgraded" 3 times in the same time I've lived in my property, all having mortgages with what I consider as dangerous number's. I'm thinking/guessing/hoping I'll be the first to be mortgage free, downside is I'll still be living in an area no where near as nice as they all live.

If I could give you some advice, I would have a play with a LTV rate calculator and see where your next LTV bracket it is, so when you remortgage you fit onto the best deals when your current mortgage deal ends. If it's easily achievable push for the next bracket or sit back and free up some of the money to save/invest or enjoy as a family and go on holidays/days out.

Joe___2

Thanks for the comments all, I am glad to have finally found like minded people who agree with me!

My friends/family have mortgages that terrify me, I always think if I had such debt I would be on pins all the time in case of an unexpected emergency, loss of job etc that would tip me over the edge.

6 days til payday and I can finally take another chunk off the credit card!

LadyWithAPlan

Lovely to see a new diary, everyone hear loves payday for those very reasons of saving and getting to one's goal. 

I  have only been on here for a few months and in that time I have really saved, looked even closer at my spends and this diary focus is also v motivational.

Wise decision on the house size. I am also in that how big mortgage v home question. But as I live in Central London the figures are v different.

I think Any extra income you could find would really move your goals quicker so ebay, surveys, cashback, extra sideline job. 

jimjames

Good luck. One thing I noticed in your post is that you said you are currently overpaying by £106 per month. If you have credit card debt that isn't at 0% it's not a great idea to pay mortgage off at 1.99% when the credit card is 20% plus. If you redirect the overpayment to the credit card it will be cleared long before March 2022.

Joe___2

Understand on the credit card, but as I'm paying £100 a month minimum to clear while maintaining the mortgage over payment the interest is only small (Less than £10 this month).

March is the latest date for it to be clear and assumes any events that might make me have to drop the monthly payment lower that my current minimum of £100, all being well with my overtime in November/December, Christmas bonus and unpaid holidays, it might even be cleared in 2021

Thought I might as well add in a few financial details:

Mortgage : As above, currently £77,193.43
Credit Card : £498.70
Savings : £6,979 (Currently owe £270 which was borrowed from this for home improvements in November)
Investments : £1,000 (Various crypto coins on the advice of my brother, we'll see how this works out in the long term! - up and down like a fiddlers elbow!)
Pension : Current value £11,078.70 (Paid into via work, monthly payments approx £184)

Thank you to all for the advice/support so far!

^Joe.

Joe___2

Payday today so my bank balance is feeling healthy again, just waiting for all the bills to come out on the first and then I can update my list.

Looking at it, I'm hoping to be on the right side of my overdraft this month!

^Joe.