Aiming to be mortgage free before I am 62!

Tiredbutdetermined

I can’t believe I haven’t posted on here for months but am so proud that I haven’t been off the financial rails. Old me not posting about everything would have been a clear sign that the frugality had ceased and the debts had increased but despite not posting for 3 months, my finances are looking pretty great.

I am still debt free, I have had tiny moments of considering the kids birthday presents being a little bigger using some of my savings but then I wondered about my credit card being used. 10seconds of thinking like that and I realised the kids are getting what I can afford with my hefty overpayments/holiday savings. I never want any avoidable debt again!

My mortgage balance is well ahead of track. My fixed rate is only until Feb 2024 and I lost the first 6 months of my 2 year fix with the ex stalling the process. I am worried interest rates at the end of my fix will hinder my progress longer term so I am determined to overpay to get in the best position for LTV level, whilst also ensuring that a larger minimum payment only hinders my overpayments/savings not our ability to keep our heads above water.
Overpayments have brought my monthly payment down to £868 but I have just increased my direct debit from £1000 to £1100 so I feel like I am futureproofing myself as best I can.

We have booked a holiday for next August, which is a seriously huge expense. Our holidays as a family of 5 were usually very much bargains and self catering mobile homes out of season or tent breaks in the summer. We had one proper holiday in Turkey but it was a teletext bargain and the kids weren’t treated or spoiled. We had a week in Thailand this time 2 years ago but that was a credit card job from start to finish! The kids wanted Greece and All inclusive so that is what they have got. All inclusive is boggling their brains as they are overwhelmed with the idea of everything being a yes. I am determined to save enough spending money to ensure that we can also have day trips, meals out and drinks out on top of this. I really want the answer to everything (within reason! Teenagers!) to be yes! 

I paid the deposit at the end of July when we booked but the balance isn’t due until mid May so I am saving like a crazy lady to pay it all in cash then. They did offer monthly payments but I am loving watching my savings balance climb and to know that I am getting the tiny bit of interest, not them.  I do feel a bit stressed that I don’t have the actual money saved for the balance yet but I know old me would have booked it and paid the deposit on credit card the intended to save for the balance, failed and popped it on a credit card so I am trying to see it as a future debt not a real debt. I will save enough to avoid it becoming a debt.

My holiday savings account is a rubbish ISA on 0.4% so I think I need to look for a better rate savings account for that. I would need to withdraw the holiday balance in May and then spending money in August but there wouldn’t be any other withdrawals.

I have settled on keeping a mini emergency fund of £500-£1000 in another easy access 0.4% account. Once the balance exceeds £1000 then I do a £500 mortgage overpayment.  This strategy works because my mortgage rate is 2.19% but, if I find a better savings rate for my mini EF then it might be better to save than overpay.
My mortgage advisor did a quote for life insurance for me with a declining payout to offset the mortgage. It was going to cost £30 a month so I have decided to go without for now. My death in service benefit would pay out £149,000 so I would like to get my mortgage down to under that figure so I know it could be used to pay off the mortgage for the kids, then I can look for a cheaper policy that works for me, not the mortgage if that makes sense.

My one grumpy point is that I still owe the solicitors nearly £2500. The were utterly rubbish from start to finish so I am using my side hustle to save to pay them and am in no major rush to clear it. I am conscious that if they start to press for it settling sooner then I may have to use the EF or holiday savings.

Tiredbutdetermined

I forgot my exciting use of my mini emergency fund last month. My car insurance was due for renewal and had gone up. I shopped around and found a better deal but for the first time in my life I was able to save a little more by paying upfront rather than monthly direct debit. I love that my mini emergency fund reheats itself pretty quickly after a biggish purchase and, despite spending £359 on the insurance last month I still rebuilt enough to overpay the mortgage with an extra £750 this month.

savingholmes

Welcome back. Sounds like you are doing really well. 

Lovely to have a holiday to look forward to. 

Tiredbutdetermined

Another big break from posting as life has been beyond hectic.

However, I think I can now move my wording from ‘I am still on track’ to, ‘this is the new me’!

Like many I get paid for January before Christmas rather than on New Year’s Eve. Pre-divorce me would have spent most of that on topping up Christmas and been in overdraft by New Year’s Day! I also got some back pay so worried I would need to hide my salary away from myself and transfer it back when I should have been paid. I decided to take it as a challenge and left it in my bank and untouched. Go new me!
I did go wild with the backpay and bought 2 tyres for my car to hopefully get it through its MOT next weekend. It had a service at the end of November that cost just under £700 in brake pads/disks/callipers but that came from my emergency fund

Our scarily expensive holiday balance is due mid-May but my savings balance now has enough in to clear it. I am so, so proud to have saved it all in plenty of time. Now on to the spending money savings.

I have been paying down my solicitors bill from side hustle and that has gone from £2500 to £800. Once my car is sorted and MOT’ed I can see what is left in my emergency fund and decide whether to stick to paying the solicitors through the side hustle or use the EF just to have it gone. I am a bit black and white thinking around money so I would like to stick with my current plan but I also don’t want the solicitor’s bill weighing on my mind. 

I have moved to paying Amazon prime and ring doorbell annually too and I love that I have the emergency fund for bits like that.

The mortgage has come down with my regular overpayments but I would like to get a few more overpayments in from the Emergency Fund when it builds over £1000 as I only have 1 year left on my fixed rate. I moved my payment up from the minimum £863 to £1100 to mirror estimated payments at the current interest rates so I won’t feel the hit at the end of my fix but it would be devastating to pay all that extra in a years time as my minimum payment and no longer be able to afford the overpayment. 

Honeysucklelou2

I read your diary on DFW and it’s great to read how far you have come in. Wonderful to read that the mortgage has gone through and you have a holiday to look forward to. It gives me hope! I do the  same job and  am currently waiting for a sole mortgage to go through following judicial separation from my ex.  ( consent order was signed and approved a year ago)He is also sitting on the transfer documents and refusing to sign them and I’ve got 2 months left before the mortgage offer expires. Certainly nail biting times!

savingholmes

Best of luck HSL. 

@TBD - glad  things are improving. Sounds like you are managing your money well

Tiredbutdetermined

Honeysucklelou2 said:

I read your diary on DFW and it’s great to read how far you have come in. Wonderful to read that the mortgage has gone through and you have a holiday to look forward to. It gives me hope! I do the  same job and  am currently waiting for a sole mortgage to go through following judicial separation from my ex.  ( consent order was signed and approved a year ago)He is also sitting on the transfer documents and refusing to sign them and I’ve got 2 months left before the mortgage offer expires. Certainly nail biting times!

It is so hard when you still feel controlled by the ex isn’t it?
I was lucky that the house was in negative equity so him signing the transfer of title was actually a benefit to his credit rating.
mine left it very late so hope you don’t end up as close to the mortgage expiry date as I did. I had told him I didn’t get a particularly great deal so I don’t think he realised how much of a difference losing the mortgage and having to reapply/extend with a new rate would have made. If he knew I know he would have ensured it didn’t go through in time.

Tiredbutdetermined

I am stunned that my car passed its MOT. I have been building as a big stress in my head and my silly headspace has escalated it eating into my emergency fund, to taking my whole emergency fund and some of the holiday money to being a complete write off and everything is doomed!!!  I really need to find an overthinkers anonymous meeting to attend!

I now have £800 left to pay the solicitors and £300 in my side hustle account to put towards it.
I have over £1000 in my emergency fund so I could pay the rest and clear the solicitors bill. However, the solicitors bill is interest free and I am very conscious that my mortgage fixed rate ends in 12 months so maximising overpayments whilst I have the lower fixed rate makes sense.
I feel like it is a little wrong not to pay the solicitors if I have the money but I don’t know if I just overthink far too much! The solicitors were awful and I ended up with a far worse deal in the financial order than the proposal from my ex and I that I had walked in with so I guess I don’t owe them a speedy payment.

Delaying paying the solicitors also come with the bonus that it delays me having to decide what to use the side hustle money for once the bill is cleared so I am happy with extra procrastination time
My car is on a PCP thing so it might be nice to save towards the balloon payment…..or I might be better swapping cars as this one just feels a little ‘off’! 

savingholmes

I get how you feel about the solicitor Bill 

Tiredbutdetermined

I think I am going to stick with the side hustle paying the solicitors.
That means I can do an extra £500 overpayment to the mortgage on Monday on top of the £237 overpayment I make each month.
I have just checked the payment schedule that came with my original offer and I am chuffed with myself that the balance now is lower than the schedule has it projected for October 2023. Being 8 months ahead makes me realise just how well I am doing.

I will plod away with the solicitors but that should be paid before Easter. I think it makes sense to build the side hustle fund back up and throw towards the mortgage whilst I have my fixed rate so the LTV will be lower when I need to remortgage.

A year down the line I can decide if I need to concentrate on the mortgage or the PCP balloon payment for my car.