Aiming to be mortgage free before I am 62!

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It feels very bizarre to be starting a mortgage free wannabe diary!
I (and we when I was part of a we!) have always been a bit of a on off rollercoaster between paying off debt and creating more debt!

I can’t really put much of a potted history of my finances together as I don’t really know how things built so much or how the mortgage was such a mess :( 
My ex-husband and I bought our first house/took out a joint mortgage in 2003. I put down a £10,000 deposit. We moved to a bigger house and a bigger mortgage in 2005 but we made a decent profit on the first house. 3 kids later and a few affairs later I have found myself a single mum of 3 with a house in negative equity. There was an unsecured loan on the house which my ex took responsibility for but how all of those mortgage payments over 16 years left me with a mortgage value higher than the house’s value and purchase price is very much beyond me. I am guessing I agreed to stuff with some knowledge and was hoodwinked into other parts. I can’t dwell on that side of things as I should have been more savvy not allowed myself to be uninvolved in family finances.
Both my ex and I had huge debts but I went into overdrive to pay off as much as I could as quickly as I could.
My ex has been unpleasant with the kids and I after having an affair with and going off to live with my daughter’s (ex) best friends mum. When our (sub prime) mortgage provider wouldn’t let me take the joint mortgage in my own name as I ‘didn’t meet affordability’ despite paying the mortgage and bills on my own every month, the ex and his solicitors started pushing for me to get my own mortgage in a short timescale or be forced to sell. My kids were 13, 13 and 11 at the time so I was trapped in the only house I could afford to buy but in a desirable area I couldn’t afford to rent in. It became clear he didn’t think I could ever take the mortgage in my own name and wouldn’t be eligible for a fresh mortgage of my own. This concern was confirmed when my fab mortgage advisor found me a great mortgage that was approved but the ex then refused to sign the transfer of deeds.
I had just under 6 months of frustration watching the mortgage offer tick closer to expiring whilst 5he ex has chipped away at us and reduced his child maintenance contributions but my mortgage went through on Monday - whoop!!

I had masses of support and cheerleading throughout my battle from the debt free wannabe diary boards and my debt total halved in a year. I do still have debt but I have a plan for that!

My divorce has been finalised and the court confirmed yesterday that the financial order is awaiting a judge’s approval/decision so I am hoping to be done and dusted with all things related to the ex at some point this summer.

My mortgage taking so long to go through after being approved meant the mortgage was put through for the January 2022 balance, not it’s current balance. After fees I was paid £2330 for the difference. I had been saving like a crazy lady in case it all went wrong with the mortgage and I needed a deposit so I topped up the money to £3000 and made my first overpayment today. The mortgage company said the overpayment took my monthly payment down from £902 to £887, which would be great but I am 42 with my first sole mortgage so I asked if it could be taken off my term instead. The lovely lady said it would be actioned as a regular overpayment on the system so I have gone wild and asked for my monthly payment be moved up to £1000 so I can commit to at least that as my overpayment each month.

I still have £1100 in my savings account but I don’t know if I need to keep an emergency fund more than I need to get my mortgage down so might pay that off my mortgage once things are finalised.

I am so looking forward to everything being finalised with the courts so I know that my debts and money are my own and I have no responsibility towards his debts. At that point I can really go for it with the mortgage overpayments.

I think the ex and I started using this forum about 14 years ago with a dream of being debt free but we would work hard for a month or two but they get distracted and rack up more debt then go again a couple of years later. Together I don’t think we would ever have been debt free. Alone, I have made a massive dent and I know my mindset has totally changed. The debt is nearly a distant memory and my new mortgage is a 20 year term, I don’t think I have ever had such a low term in our old joint mortgage.
My lump sum payment and overpayment today has taken the term down to an estimate of just under 17.5years.

I am a teacher so the prospect of having to teach until I am at least 62 to pay the mortgage is quite scary. I don’t want to set a mortgage free goal date, I just want to work on the date being sooner so I am not shackled all the way through to retirement. Every payment that shaves a little off that date is buying me back my life.

congratulations to anyone who made it through all that! I am so, so thrilled to be here and I am proud of how hard I have worked since my ex-husband leaving to secure my kids and my future.

I should have some exciting updates over the next month but have to sit on them for now!
Halifax CC April 21 £3176.24 Now £0 PAID OFF
PO loan May 21 £6804.36 Now £0 PAID OFF
H loan May 21 £8961.84 Now £0 PAID OFF
Creation May 21 £1548.33 Now £0 PAID OFF 

Total Debt May 21 £20,490.44  DEBT FREE DATE 29/7/22 

Mortgage balance May 21 £177,096.19. Now £151,258.92
Mortgage free date. At start of sole mortgage = July 2042

SAVINGS FOCUS - get rid of the car finance. Savings balance/outstanding balance = £6885.90/£15,631.25
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Comments

  • Tiredbutdetermined
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    Two pieces of post arrived today. One from the old mortgage provider saying my direct debit had been cancelled and asking me to set it back up. The second letter from the new mortgage company welcoming me in!
    I tried to check my online account with the old provider but it wouldn’t let me login as I don’t have a product with them. I have to confess logging in a few times just so I could see the message - what a loser!

    I need to look for more ways to generate money over the summer to throw at overpayments. I am still doing a tiny bit of tutoring over the summer and have money to come in from exam marking. I need to look into surveys and shopping scanning  whilst I have time over the next 6 weeks.

    I still have solicitors fees to pay and I am guessing still more to come until the financial order is finalised.

    I have a £1000 EF but I don’t know if I am better keeping it or chucking it in as an overpayment. I bought a new boiler in December and my car has a service plan attached. I don’t really know what emergencies I am anticipating but I still have an empty credit card with a £4500 limit I could use if I really had to for a genuine emergency.
    Halifax CC April 21 £3176.24 Now £0 PAID OFF
    PO loan May 21 £6804.36 Now £0 PAID OFF
    H loan May 21 £8961.84 Now £0 PAID OFF
    Creation May 21 £1548.33 Now £0 PAID OFF 

    Total Debt May 21 £20,490.44  DEBT FREE DATE 29/7/22 

    Mortgage balance May 21 £177,096.19. Now £151,258.92
    Mortgage free date. At start of sole mortgage = July 2042

    SAVINGS FOCUS - get rid of the car finance. Savings balance/outstanding balance = £6885.90/£15,631.25
  • Aimingforthegoodlife
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    Hi tiredbutdetermined, so lovely to see you over here! Personally, I think it is good to keep the EF, even though having a CC you can use might be helpful, if you have to use it you are likely to be charged interest as well as adding to debt. I also have money on CC's and am building my EF at the same time to ensure I have access to non chargeable money. You have already made an amazing OP and after everything you have been through, have a little breather and have a little think about what you want to do, and how you may want to do it. Whatever the overall plan, you will smash it, you have shown such determination over on DFW!
  • Tiredbutdetermined
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    Hi tiredbutdetermined, so lovely to see you over here! Personally, I think it is good to keep the EF, even though having a CC you can use might be helpful, if you have to use it you are likely to be charged interest as well as adding to debt. I also have money on CC's and am building my EF at the same time to ensure I have access to non chargeable money. You have already made an amazing OP and after everything you have been through, have a little breather and have a little think about what you want to do, and how you may want to do it. Whatever the overall plan, you will smash it, you have shown such determination over on DFW!


    I am in two minds about the EF. It is sat in my savings account earning virtually no interest, whereas if I paid some of it off the mortgage it would represent a decent saving on interest.
    I know my past spending and debt habits are a thing of the past so I don’t feel like having to use a credit card in case of an emergency would lead to a slippery slope but I also know I am rigid and harsh on myself so, although any potential use of my credit card would be paid back rapidly and probably before incurring interest charges, it might lead to a hefty dose of self loathing!
    I suppose I am struggling to see a real emergency that would qualify to use the EF. My stairs carpet is horrific but it wouldn’t seem the right use. My dishwasher is becoming increasingly ‘dodgy’ but I would prefer to do without and save.
    My ex and I looked at Dave Ramsey years ago but never truly made it past baby step 0 so I suppose I have the £1000 EF stuck in my head. Maybe I need one but it could be lower. Maybe £250, maybe £500, maybe something inbetween!

    I think you are right though, I have been through a lot and I am not clear of it all yet so I should just breathe and take some time over it all
    Halifax CC April 21 £3176.24 Now £0 PAID OFF
    PO loan May 21 £6804.36 Now £0 PAID OFF
    H loan May 21 £8961.84 Now £0 PAID OFF
    Creation May 21 £1548.33 Now £0 PAID OFF 

    Total Debt May 21 £20,490.44  DEBT FREE DATE 29/7/22 

    Mortgage balance May 21 £177,096.19. Now £151,258.92
    Mortgage free date. At start of sole mortgage = July 2042

    SAVINGS FOCUS - get rid of the car finance. Savings balance/outstanding balance = £6885.90/£15,631.25
  • South_coast
    South_coast Posts: 4,976 Forumite
    First Anniversary First Post Name Dropper Photogenic
    edited 24 July 2022 at 6:44PM
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    My EF is intended as income replacement in the event of losing my job, so although it's a good chunk of money it's untouchable as I'd be completely scuppered without it. The credit card is fine for buying things, but you can't pay your bills with it. I agree things like replacing the stair carpet and dishwasher wouldn't really qualify for using the EF, but I was very grateful to have it to borrow from when I needed some emergency building work doing last year (not so pleased at having to pay it back though 🤣!)

    Good luck with your plans x
    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!!!
  • Tiredbutdetermined
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    My EF is intended as income replacement in the event of losing my job, so although it's a good chunk of money it's untouchable as I'd be completely scuppered without it. The credit card is fine for buying things, but you can't pay your bills with it. I agree things like replacing the stair carpet and dishwasher wouldn't really qualify for using the EF, but I was very grateful to have it to borrow from when I needed some emergency building work doing last year (not so pleased at having to pay it back though 🤣!)

    Good luck with your plans x

    Like you, I think the only way I could see the EF being used would be income replacement too but I get full sick pay for 6months and half for 6months. If I did lose my job then I would probably do fairly well on benefits with 3 kids and no job!
    The idea of saving 3-6months salary or 3-6months expenses is a horrific amount of money and my gut instinct is that the mortgage comes before that due to my age.
    If I understood the lady I spoke to from the mortgage company correctly then overpayments don’t truly come off the term off the mortgage but reduce the monthly payment. I have then taken the option to pay above my monthly payment but each time I do this the size of my monthly payment will come down. I guess in a way this means income protection for the future if my minimum payment on the mortgage is lower.

    I think I am talking myself round in circles but I think my gut is to go with a small EF of maybe £250/£500. I am hoping to be able to shuffle things to make a pretty decent overpayment each month so emergencies could come from overpayments. 
    Halifax CC April 21 £3176.24 Now £0 PAID OFF
    PO loan May 21 £6804.36 Now £0 PAID OFF
    H loan May 21 £8961.84 Now £0 PAID OFF
    Creation May 21 £1548.33 Now £0 PAID OFF 

    Total Debt May 21 £20,490.44  DEBT FREE DATE 29/7/22 

    Mortgage balance May 21 £177,096.19. Now £151,258.92
    Mortgage free date. At start of sole mortgage = July 2042

    SAVINGS FOCUS - get rid of the car finance. Savings balance/outstanding balance = £6885.90/£15,631.25
  • Aimingforthegoodlife
    Options
    I think the most important thing, is that it doesn't matter what me or anyone else thinks or advises, this is your journey and you can do it however you like! If having a lower EF would work, especially with such good sickness cover then why not! I have read through the baby steps recently and it is interesting, but definitely needs to sit with your own wants and needs to make it useful. You have clearly shown how well you can manage money, so thats not an issue :smile:
  • Tiredbutdetermined
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    I just like having clear plans :)
    I like the idea of something like the Dave Ramsey plan but it is very American. I guess with our stronger welfare and medical systems there is less of a need for the fully funded emergency fund. I have a decent teachers pension and I have no desire to leave the profession in the near future.
    I would love to pay for university for my kids but I genuinely feel that takes something from their life experience.

    I need my divorce finances to be finalised through court and then I can tidy things up. When we were a family of 5 we were the 3-4 very cheap holidays a year type. Obviously we couldn’t have a holiday last year as we were still trying to stabilise and this year isn’t happening either but we would love to have a proper holiday next year so I need to sort my savings accounts and probably split everything between holiday and mortgage overpayments. I can’t tidy up my savings accounts until after the divorce finances are finalised so I just need to calm my desires to overpay the mortgage down.
    I have some exam marking money waiting to share between the mortgage and holiday fund
    Halifax CC April 21 £3176.24 Now £0 PAID OFF
    PO loan May 21 £6804.36 Now £0 PAID OFF
    H loan May 21 £8961.84 Now £0 PAID OFF
    Creation May 21 £1548.33 Now £0 PAID OFF 

    Total Debt May 21 £20,490.44  DEBT FREE DATE 29/7/22 

    Mortgage balance May 21 £177,096.19. Now £151,258.92
    Mortgage free date. At start of sole mortgage = July 2042

    SAVINGS FOCUS - get rid of the car finance. Savings balance/outstanding balance = £6885.90/£15,631.25
  • Aimingforthegoodlife
    Options
    Woohoo!! What amazing news!! That is such a relief, and wow for knocking that debt away completely!!! :heart:
  • savingholmes
    savingholmes Posts: 27,580 Forumite
    Name Dropper First Anniversary Photogenic First Post
    Options
    So pleased your Fin Order now sorted. Was concerned for you. 

    I would try and keep and grow your EF to cover your mortgage if you ever needed it. Cashflow in an emergency is king. A CC doesn't really cut it there... I'm still paying into pension but trying to get to a 3-6 months emergency fund. I've set a lower target initially. I just make a token OP of £20 pcm. That will still knock 6 months off the term if I do it consistently.

    You have to find what helps you sleep better and best balances risk. I have found regular savers that give me better interest than what I'm paying on the mortgage.
    Achieve FIRE/Mortgage Neutrality by mid 2030
    1) MFW Nov 21 £201,999 with 236 payments to go - now £183,036 Equity 26.8%
    2) Spend on handyman & external building works & new patio door £12.65K
    3) CC £4.6K on 0% spends card but offset by £33.8K savings (part EF, part future home improvement)
    4) Mortgage neutral by June 2030 AVC £10.2K/£127.5K AVC target 8% value at 15/5
    5) FI Age 60 annual income target £13.7/30K 45.7%
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