Just about to start mfw after leaving dfw!!!!

julybride

Me and hubby are about to buy our new home.... as we are in a one bed flat with one under one and one on the way!!! We became Debt free the week before Christmas after a couple of years hard slog and so now its onto a higher mortgage.... but the payments are still less than our debt but my income is about to reduce due to leaving work on mat leave. So wish us luck and tell me where to start. We have an interest only mortgage at 5.85 on 205,000.

Okay so at the moment we have no spare money but all my hubbys bonuses are going into savings and me back at work full time in two years will be able to easily put enough aside... to pay it off... but until then... is their some way i can work out how much each £5 put aside will take of the length of the mortgage? to act as a motivator? or any other suggestions being a dfw i think i am savy at getting the most of my money and deals just need some motivation.

seven-day-weekend

Well done on getting debt-free!

I have no advice to offer other than even a little overpayment helps. We paid off our mortgage early simply by continuing to pay the same amount as when the rate was at 15%, even when it had gone down again. We couldn't afford any more, but every little helped (admittedly it was nothing like £205,000!).

I'm sure you have an insurance policy or similar in place to pay the capital off....if not, change to a repayment mortgage asap!

But good luck anyway!

bellsbells

Congratulations on becoming debt free :beer: - I am in the same boat as you after becoming debt free at the beginning of December. Its a wonderful feeling isn't it! I am going to do a regular overpayment every month and then save any other bits and bobs to add to my mortgage 'pig'. Have you looked at that thread yet - it is a sticky. As SDW said - every overpayment helps so even an extra £5 a month will make a difference! I am really looking forward to the 1st Jan - I will be able to update my sig to show my first official MFW overpayment :rotfl:

Good luck and welcome!

BB

benbenandme

Keep up the same attitude that you had to get debt-free, keep visiting both this board and the dfw board I have my diary on that board as I see my mortgage as a debt Good luck with the mortgage, well done on clearing the debts and keep posting :beer:

elantan

hey there must be a few of us now i became debt free in december as well and have started to think of mfw now as well so if you fancy company along the journey i'm available

julybride

Seven-day-weekend. I understand your concerns. Not to get in to a long discussion about the pro's and cons of interest only mortgages. We choose this root plus an ISA knowing that in 2 years our circumstances would be different and we will have the ability to up our contributions dramatically. Currently the payments are the same as renting a smaller home. So for us it makes sense; we have taken an educated decision and we know ideally what we would like to put away but every extra penny will count in the next couple of years.

Elatan - maybe we should start a new to MFW in 2008 :-)?

.

elantan

i'm up for that if you are..

i have been printing out projections for paying it off early and am planing on pouring over them tonight whilst at work..i have to get the balance right though as i still dont feel i have enough pension and have no savings so i'm gonna have to come up with a plan ..have a busy night shift ahead of me hope my work doesnt expect me to actually do any work lol

Dithering_Dad

Congrats on becoming debt free - isn't it a great feeling!

I hope you have the same success with becoming mortgage free.

angelavdavis

Congratulations on paying off your debts. You will find you are in good company in this forum as many of us are previous DFWs that have migrated to MFWs!

I quite like this calculator here as it will show you, that even a £10 a month overpayment will knock off 9 months from your mortgage and save you £3523.54 in interest!

I guess your best bet as you are interest only currently is to save up your savings into ISAs (tax free of course) and then pay off lumps when you re-mortgage so effectively it goes down every time. Switching over mortgage type when you are able to afford it will then be an easier option as you can effectively borrow less as you have contributed toward the capital payment.

Take a peek at the mortgage free in three years thread as there are lots of tips on there on how to make the most of your overpayments.

Good luck!

elantan

well i had a good sit down last night and went through my egg illustrations my finances etc and its looking good i have changed over my snowball pig that helped pay my debt to now help pay my mortgage but i think i will be working on the illustration pic one as well so its all systems go for me i spose i should start my own diary though as i am taking over yours july bride sorry about that