Starting afresh in paradise

ManekiNeko

Thanks. 🙏🤓

Personally, I counted from completion, because that's the day all the stress of attempting to buy it ended, and my shoulders started to come down from around my ears lol. But it's your anniversary so you tell me ☺️

For sure, I'm glad you've got that stability. It's nice knowing that, at least in theory (obvi no one can predict interest rates, though we can try to lol), you won't have to move unless you choose to. Landlords can be really unpredictable, I got kicked out of one place after nine months because he wanted it back to move in (again) with his on-again, off-again girlfriend. 🤦‍♀️ The rest I chose to leave, but some were expensive af or cheap but grim af. Only a few were genuinely really nice places to live without costing the earth. Perhaps my favourite was a top floor apartment by a lake, I could see it from my bedroom window and I used to take my mate's little dog round it every day after work. Ofc loads of mozzies at dusk, and her dog pulled like a train despite being ankle high lol, but it was still good. Rough town was why it was cheap, but I had a car and was far enough into the suburbs it rarely affected me.

I hear no fault evictions are being ended now by new legislation, but some landlords are leaving the game because of the change, so it's not a total benefit for renters though it'll help in the longer run I expect. I'm certainly grateful not to be chasing a diminishing pile of homes right now and paying through the nose for the privilege, rents are eye watering. Today my mortgage costs less than one third of a privately rented home in my area each month, though that'll change one day ofc, after my fix ends. It could easily double at that point, more if rates get stupid. I'm not ruling that out, they have been stupid in the past (late 80s/early 90s for instance), which is one reason I'm overpaying now. The less the pile of debt, the less the interest rate can hurt me - and the more likely I can buy a bigger family home later. I'm seeing OPing as saving a bigger deposit too 😝 just like my pre-owning days really haha.

How long is your fix for btw? Any thoughts on a level you want your debt to reduce to by the time it ends?

Merlin's_Beard

I got kicked out of a place by a landlord wanting to move in as well (divorce between the two owners so the Mr moved back in) - and I think those type of no-fault evictions will still be allowed to happen, just "for no reason" or "we could rent it for higher to someone else" reasons getting banned. I was also renting with a cat, which adds an extra layer onto it.

Cost wise I'm fixed for 5 years - until August 2027, thank goodness (so you and I will be fixing at about the same time again). Rents are going up all the time around here as well so while my mortgage is more than my old rent now I don't think that will be true by the end of my fix, or even by next year (there is not enough social housing in my area so anything vaguely affordable gets snapped up in days. I'm on a newbuild estate and I think the 4 flats and 3 houses opposite me are pretty much half the social housing allocation for the area for the next 5 years). You're right though, it's all very well and good changing laws to make private renting less appealing, but if there's not enough social housing to pick up the slack (and there isn't, not here, not anywhere), and homes aren't affordable (they're not), then where do renters go except compete even harder for what's left? Urgh.

Planning to have my mortgage down to under £200,000 by the end of the fix - that way if house prices stay steady I should be able to access better LTV deals because I own more of the house, and if house prices drop like a stone I hopefully don't go up an LTV band, and that all helps with interest rates.

Also hopefully that means more lenders will be interested in me with reasonable rates - I borrowed the max both in terms of amount and length of mortgage this time around, because I stretched to get a house I could stay in, which on paper is absolutely fine, and with a stable fairly recession proof job is not as daft as it sounds (and I did my maths beforehand!), but I'd feel more comfortable in a position where at least most of the mortgage providers agreed they would touch me with a barge pole...!

ManekiNeko

Ugh that sucks, makes sense about the divorcing landlord though, that's one of those times it's fair enough really as they also need a place to live. But just kicking someone out because they could get more rent from someone else is harsh - I mean I get it from a business perspective, but it's hard on the tenant who is just wanting to live their lives and can make them homeless if they can't find anything else, it's just not right. And people often have to rent despite having a family, which makes it even more stressful with a little one, plus moves can mean kids having to change schools etc which is so disruptive for them. It's difficult renting with a pet as well tbf, most places I've lived didn't allow animals at all so it makes it even harder to find somewhere, especially on short notice.

It's not easy to buy for renters either, I know someone with a well paid professional job, with kids, who tells me they think they'll never be able to afford to buy. I'm sure they're not alone in that situation.

Yeah the lack of social housing is such a huge issue, I was on the waiting list in my area the whole time I was in the refuge and I never got offered anywhere, and it's not like I was in a big city, I wanted something more rural. Towards the end of my stay, I was told I might expect to get council offers in another few months, but fortunately I was able to buy instead. It was so frustrating on many levels, not least because I was taking up space in an emergency refuge because I just had nowhere to move on to, yet victims/survivors are at risk (and worse) every day because of lack of refuge spaces. When I went into refuge for instance, I gave them about 10 counties I'd be willing to consider fleeing to, but they only had three spaces in that whole area, and that's considering it wasn't even the peak time of year to flee. Like you say it's no surprise that rents are rising really with the shortages. I know building homes takes time, but it seems to me successive governments just haven't pushed it hard enough. Kicking the can down the road can only take us so far in a country with an ever-increasing population. Plus Housing Benefit has been frozen for so long it's really out of touch with rents. Plus they've been taxing and regulating small landlords out of business for pushing a decade, which ok if that's what the govt decides they want, then it is what it is, but for goodness sakes maybe have a backup plan to house people when the LLs pull out?

Anyway, that's my policy rant over 😉

Is this your first owned home? That's great you're fixed for a good long time, you've got time to watch things play out and also made the most of your current lower rate to make inroads into the capital. Yep, I'm February 2029 so I'll start looking about a year after you fix again. It's nice to have a mortgage fix buddy ☺️ lol. Btw, I heard in the news the other day that a two-year fix might be around the 4.5 per cent mark by roughly the time you fix next, but it's all pie in the sky this far out ofc.

That'll be amazing progress if you can bring it under £200k.. you might mean a nose under, so ignore this if so, but was just adding up that if you could get to £192,799.20 you'd have knocked 20 per cent off the capital, which is a very nice sounding chunk indeed. I'd need to get down to £54,799.20 to do the same thing in percentage terms, which is actually interesting as *does sums* I'd be on £57,350 without any OPs. Mind you, I really need to push more than that if I'm going to have a chance at a family home one day (£180-250k to buy around my neck of the woods, the upper end being what you'd actually want).

You have a great point about LTVs in the event of house prices dropping, that's not something I'd considered tbh. I think I've just felt fairly insulated from it all as I got a good deal on my little fixer-upper. I was lucky enough to be (just) on a 60 per cent LTV to start with, due to the help from my sister, but I'd like to get a bit more comfortably within that band tbf.

Ha, hear you on the lenders. It's always nice to feel you have a choice between them, rather than have to go with the only one/few that'll have you. I also borrowed the maximum term and amount from my lender; there's only one other one I could have gone with, and they'd only have lent me about an extra £3-4k ish. The max. term means I can't soften the blow of borrowing more in future, either. I actually couldn't get my same mortgage if I applied today because I'm no longer off sick (having resigned), even though my income hasn't changed a penny. Lenders are really risk averse though. You know what they say - banks will only offer you an umbrella when it's dry, never when it's raining. ☔

Merlin's_Beard

Agree with everything you've said, and it completely sucks that you or anyone else can't move on from shelters in good time to start again, and that that also stops people getting the help they need.

And that's before you get into the vagaries of universal credit when housing benefit is part of that....! Had a colleague who was on UC but because of her assessment period and us getting paid not on the same date (think "last Thursday of the month" type thing) sometimes they assessed her as getting paid twice in her assessment month and she got nothing....

Pets are a nightmare with renting. In hindsight maybe I wouldn't have done it, but I would turn down 100 rentals to keep her now - and probably have. Part of the security of having my first home now is being able to not worry about her and what I'd do if I couldn't find anywhere that would take her. My house, my rules now.

I think if you're 60% LTV now you can probably not worry too much about it at all - you'll naturally have worked your way further into that band by the time your fix is up anyway, especially with your OPs, so hopefully you'll get the best rates going. I'm 75% LTV so right on the border, and a bit more sensitive to change. £192,000 would, oddly enough, put me at 60% LTV if I use the purchase price, so it is in my eye as a mini goal for the best rates (and knowing it's 20% paid off the loan helps a lot). I don't know if it's achievable before fixing but it would be amazing if it was.

Fingers crossed you're in a better place with income when you come to re-fix, anyway - seems daft that no one would let you carry on paying what you're OPing but like you said, umbrellas only when it's dry! But that's a long way off so plenty of time to take a breath and look after yourself first.

ManekiNeko

Deff, couldn't agree more.

Oh god, what a nightmare for her. It's so daft taking money off people when an ounce of common sense could tell you they can't afford it. I remember talking with someone in the NHS a while back whose bonus for working during the Covid-19 pandemic was 100 per cent deducted from her UC (which she received as she was in work, but on a low income). These sorts of situations just shouldn't happen.

Pets are family once you have them. 💛 What breed is she? I'm really happy you have that security and can make your own rules. It's the best feeling.

Mm fair. I was very fortunate to do 60, if my DS hadn't helped me I'd have barely sqeaked 70 per cent had my affordability been sufficient to cover that (ofc, it wasn't, so in reality I'd not have been able to afford my place at all). 75 per cent is also a comfortable ratio imo with regards to property prices, particularly given you've bought for the long(er) run and won't need to rush your next step, if any. Though can appreciate wanting to be further within the comfort zone so to speak. Fully agree there's a solid double dip bonus to be had there with your OPing - first because you're saving money by not paying interest on it any longer, and second because you'll be able to get a better % at remortgage and pay less interest on the rate later. I like your thinking on that front.💡

Yeah that's fair enough, with a bigger mortgage you've more heavy lifting to do than me to drop each % so who knows what's possible on that front. But it's nice to have something concrete in mind as a goal, whether you can make it before fixing again or not - it's like horse riding or driving, you will end up arriving where you're looking at. Besides, with a nick like that, there's always space for a little magic. 🪄

Thanks. Well, to be fair my OPs have been largely bonus "extras" rather than being able to evidence them by income, but maybe one day eh. And you're right, there's a lot of time between now and then. Looking after myself first is a novel concept still, but you are right about it. It's honestly hard to break the habits of a lifetime, I'm too used to unhealthy relationships and not being allowed to take up space. Anyway, on a practical front my main priorities just now are PIP and then working on my apartment to get it functional - getting to talk OPs is a fun distraction / reward for me haha. Obviously there's plenty of good reasons to get it paid down, but I just enjoy the mental challenge of it all and try to treat it as a game. Speaking of PIP, just about to sit down again with my PIP form, I'm in the home stretch with it now really. I've done bullet-points for every section and I'm about halfway through turning them into sentences. Got to post it ASAP really, it's due end of next week.

ManekiNeko

Just a little financial post as well, as I've finally updated my signature (amazing how productive I can be when I'm procrastinating doing my PIP forms! Lol).

My mortgage balance has updated to show my latest OP, so that brings me down to the £65k-somethings. It's always a fun feeling to come down a number. I've made more than double the OPs so far this year than I managed last year, taking me just over £1k all told (1.47 per cent of my original mortgage has now been OP'd).

This means I've repaid 2.5 per cent of my mortgage using standard repayments, plus those OP's, takes me to 3.97 per cent repaid. I've also saved myself 7 months and 27 days on my MF date, equating to £747.10 of interest that future me isn't going to have to find. Not bad for a year's work.💪

I haven't been bothered to call the bank yet to find out what my new daily interest rate is, but oh well. Another time maybe.

In other news, it's looking like I'll need to repay my DS faster than originally planned. When she helped me out, it was open-ended and there was no pressure to have it back by any particular date, so I settled on £100 a month and then upped it in line with inflation when my benefits were uprated. I checked in recently though and it does sound like things have changed and she could use the money back sooner (and who couldn't in this cost of living crisis tbf). It's literally her money, so my priority has to be returning it, and at the end of the day she's helped me (and my DP) out more than I can ever repay by helping me to get a home, so we want to make certain she's good for money and doesn't have to stress in the slightest.

This is financially not the best news, as each month I OP that £65 would have saved me about £50 a month in lifetime mortgage interest, but it's ethically, emotionally and mentally absolutely the right decision. At the end of the day, if she didn't help me, I'd still be homeless - and even if I could have by some miracle gotten a bigger mortgage, I'd have been paying mortgage interest on all of it anyway. The outcome is that I'll be diverting my £65 a month UC service charge money to her from next month's budget onwards, and my DP is planning to help out by sending money as well, as he can afford to at the moment. After my DS is repaid, I'll then carry on repaying my DP the money he contributed, rather than continuing to owe my DS for longer. Hopefully that makes sense?🤔

Anyway, this is reflected in my new DFD date of August 2027, and that'll pull forward again when my DP adds money as well (but as I'll still owe him, my overall DFD will still be Aug '27, if you get me). One good thing here is that I can stop worrying I won't have finished repaying her by the time my fix ends, so my bank won't wonder about regular outgoing payments to her.

This does obviously mean I will (again) no longer have a regular OP amount in my budget, but never mind. I honestly find more motivation in finding scraps of money to OP, daft as that sounds, so I'll be ok as long as I keep doing that. Possibly in the future my income might increase, and I can reconsider things then, particularly if I ever manage to get NHS therapy and can take a break from my private therapist. For now though, it's more than enough for me to have a home and be financially comfortable each month.

ManekiNeko

Finally managed to catch up with my DS today, we've agreed my DP will start sending her money as well, starting in a month or two. I've updated my spreadsheet so it'll automatically deduct his payment off my debt to her, as well as adding it to my debt to him. It'll basically mean we finish paying her by August 2025, although we've arranged that his payments will very much be 'bonus' payments as and when he can afford to, so there's no stress on his finances if a big bill comes in, so ofc that date could vary. And ofc if/when I get pregnant, we might have to rethink things, but my sister knows this.

We've said we'll take a view closer to the time, but I'll either pay him back cash or give him that amount worth of equity in my apartment, whichever makes most sense for him at the time. It'll either be me, or both of us, who buy our family-sized home one day, so most likely he'd just use the cash/equity towards that purchase anyhow. I don't feel the need to get the place valued or anything, so he can buy in at purchase price - we were in a committed relationship when I was looking, he helped me choose the place and came to every viewing with me, including giving technical advice on works that needed doing to some of the places, he supported me hugely through the whole purchasing process, and has done a lot of DIY work on the place to boot.

I feel good about these decisions, both are the right thing to do morally. And once we're finished with paying back my sister, we can then focus properly on paying down the mortgage and saving for our next home.

In money news, I've been saving up little bits of money - a little leftover as I could only make a certain max. OP payment in one month, savings interest, cashback and so on - and I'm up to £34.43 in my OPs savings fund. It feels very small compared to £650-odd, but it will build, slowly by slowly.

It's been a tiring week tbh so I'm going to play a game or doze or something now. It's been very rainy and windy all day so I'm enjoying feeling cosy at home, I love the noise of rain lashing against the windows. Might go for a little walk later tonight, we shall see. Wishing you all a peaceful, cosy Friday, whether you're hiding from the weather or enjoying it. 🌧️☔☁️🍃🌬️

ManekiNeko

Ooh, and I forgot to say, I recently opened a Chip savings account. As my main bank can only have up to £5k in it (they don't pay any interest above this, annoyingly), this is my next-best place/overflow for savings. It's in and out of the best buy tables, although it was at the top when I opened it a few weeks ago.

It's quite nice as an app actually, you can see at a glance how much savings interest you've earnt so far this month. A bit fiddly in some other ways, and there's some things to know before getting one which Martin covers, but for me rn, a good option.

I'm getting to the stage again that I'm almost at the lower savings threshold for benefits (£6k), although ofc there's some disregarded cost of living payments as well, so it'll be a bit more relaxed than that for a while. Even so, it's both a nice feeling and kinda feels a bit more pressured, as I now need to be careful to tot up everything once a month, so I know whether I'll need to declare it or not. Last month was an easy decision, e.g. time to overpay all that money I'd saved up, as there's no sense having my benefits reduced instead of paying down a debt. This month I'll have to do sums, I think I'm good with the disregards for now but perhaps by next month or so I'll need to look at either buying something, or overpaying debt again. Realistically there's no shortage of things to buy (I'm looking at you, DIY 👀 lol), nor any shortage of debt I need to repay, but I have to be careful with the timings in terms of the UC assessment date each month, because my mental health can make it harder to do these sorts of things, so I have to be organised and start early, so I don't risk getting penalised just because I wasn't well.

One thing that's really annoying me is that my savings 'pots' often can't contain the full amount needed, due to the £6k threshold. Smaller pots like Christmas or contents insurance are fine, ofc, but replacing say all my white goods, or my tech - I just can't put too much into these pots before I start to top out. My partner was suggesting to maybe just have one general pot of savings, and take it all out of that, but I'm not sure if I can use that technique, as it does help me to know roughly what I'm supposed to be spending and saving each month. There again, it would be easier on my head not to need to update pots all the time. Maybe I can figure out a halfway house, like pots for some things and then a bigger general/emergency pot for the more occasional/unpredictable expenses like white goods or a laptop? Would be interested in your thoughts, if you'd care to share.

Merlin's_Beard

Sounds like you have a sensible system set up with OH, and it sounds like it's all eventually going to go to the same home in the end anyway.

Re the savings pot - your halfway house of having pots for definite things and one pot for potential/occasional things sounds like a good compromise.

ManekiNeko

Thanks, that's our plan yeah. I just want it to be in a slightly bigger home than my current one, I need my space even if it's just a quiet hour in the other room to read/call a friend, you know? I'm a better person for having a little space at times. But I'd love to live with him in the long run.

Oki cheers, it's all I could think of really, I'm so used to budgeting to the penny when things are tight so it feels really weird to consider unallocated money. After my PIP forms are done I'll have another crack at the budget and see what I can tweak. Thanks, it helps to have a bit of a sanity check on this stuff. ☺️