How to be mortgage free after 8 years

Rave

kinster wrote:

Yeah, and so would everybody else if that happens

Nope. Between 1995/6 (the bottom of the previous housing bear market) and 1999 price growth was pretty moderate. Anyone who spotted that the market had bottomed and bought at that point has done well (and, assuming that their rental income still covers their mortgage payments, probably still are doing well). That was a clear 3 year window of opportunity. Markets are driven by sentiment- just as you couldn't move for people telling you in 2004 as the market peaked that "now is the time to buy! Property will make you rich!", at the bottom of the market people will still be saying that you shouldn't touch property with a barge pole even when it has become a canny investment again.

The crash of the early 90s was painful and lots of people lost everything. That was less than 15 years ago and yet it seems to have been almost entirely forgotten by the country as a whole. People have short memories.

Thefunkygibbons wrote:

Worrying about the kids is a natural thing for us parents

I may see whether I can pick up a flat or two once I have cleared my mortgage

However, I cannot se me being able to afford 5 by the time the kids need them, so that is why I will sell the current house

Well, you won't need to be able to afford to buy them outright- you just need a deposit. Then let your tenants pay your mortgage off. Right now Buy-To-Let is a crazy investment- people are taking out IO mortgages and finding that the rent doesn't even cover the payments on that- let alone any repayments. They're gambling on capital gains, and IMO are almost certain to lose.

However, there will come a time (I am almost certain) when house prices will drop to the extent that a market rent will cover the payments on a repayment mortgage. My landlord bought in 2001 and my rent more than covers his repayments. The value of the flat has since risen to the point where it wouldn't if he bought today, but he's still sitting pretty.

Reading around the subject, it looks like kids will happily stay until they are 30+ these days anyway so I guess it is a long term plan

That's because house prices are so crazily high right now. When prices drop to the extent that twentysomethings can afford to buy again, the average age of a FTB will drop again.

kinster_2

Rave wrote:

Nope. Between 1995/6 (the bottom of the previous housing bear market) and 1999 price growth was pretty moderate. Anyone who spotted that the market had bottomed and bought at that point has done well (and, assuming that their rental income still covers their mortgage payments, probably still are doing well). That was a clear 3 year window of opportunity. Markets are driven by sentiment- just as you couldn't move for people telling you in 2004 as the market peaked that "now is the time to buy! Property will make you rich!", at the bottom of the market people will still be saying that you shouldn't touch property with a barge pole even when it has become a canny investment again.

The crash of the early 90s was painful and lots of people lost everything. That was less than 15 years ago and yet it seems to have been almost entirely forgotten by the country as a whole. People have short memories.

Well most didn't buy in the past as it wasn't as easy as nowadays to get finance with BTL mortgage, self-certs etc. So I think most will be buying at low prices, if it happens.

Frugal_Fox

Lets take this whole thread back to the start. The OP was receiving lots of PM regarding his signature. In response he posted about how he was going about being mortgage free - many years early. His advice is good and so simple even I can follow it - which always makes a tip a good one!!

WHATEVER your income is - IF you can afford to make overpayments - you should. Be that overpayment £50 or £500 +, whatever you save today and use to pay off your mortgage or debts, you can reap that in increased income once your mortgage and or debts are cleared. What you then do with those funds is up to you.

I'm currently a Debt Free Wannabe, and that is my current priority. Once my debts are gone, my next is paying off my mortgage.

Thefunkygibbons

Thanks for pulling it across

It is quite a long thread but there are lots of other people who jumped in with similar stories

The simple advice is if you have cleared your other debts and you have a rainy day fund, then one of the very best uses of surplus money is to pay off the mortgage.

The best way to do this is by monthly standing order as the money disappears every month before you even think about saving it.

The only exceptions are
1. Some mortgage deals have an annual limit that can be redeemed each year without penalty. It would usually be best not to exceed this
2. Some mortgage deals do not knock off the capital repayment until a certain point of the year, so it is best to save up and make a lump sum payment jsut in time for that date

Depending on circumstances some people may find an offset mortage better than repayment, but there is quite a high cut off (possibly £30000) that needs to be offset before the benefit is higher than the higher interest rates on such products.

Personally, I prefer to keep it simple.

gentlepurr

thanks tfg,

i remember reading this thread some time ago, but did not post on it then.

my income is nowhere near yours, but then again, i would not be able to take out a mortgage your size either, so its all relative, and the bottom line is, we could all cut our cloth and do what you have done, given a little willpower and determination, and i intend to do just that.

i think you all have your heads screwed on, and have your priorities right, you've got to get the balance of yopur priorities right.

i had several visits to eastern europe before the wall came down, and it really taught me the difference between NEED and WANT, once you can understand this, you're on the right path.

xx

gentlepurr

ps, hope yopu do as well with your weight loss target

xx

Thefunkygibbons

gentlepurr wrote:

ps, hope yopu do as well with your weight loss target

xx

Well I had Sainsbury's own brand weetabix for breakfast and lunch so that is money saving as well as calorie counting

:rotfl:

bluesnice

Great thread! Well done TFG. I don't have a mortgage yet! I'm waiting for house prices to come down. However, in the meantime, I'm saving like mad to get a very nice deposit together. We currently have 30K, which isn't bad considering 5 years ago we were 6K in dept!!

All spare cash goes in the pot, I'm in the process of selling all my junk and old books. I cook nearly everything from stratch, have a brick for a mobile, drive a banger and stooze.I'm also making the most of the advice on this site for insurance etc.

I've been watching the Pay your mortgage off show and Im thinking of ways to make some extra money. I have some skills that I could utilise: I'm a qualified nurse (don't fancy extra shifts), massage therapist, reflexologist, reiki practitioner, I touch type, have good riding and horse and animal management skills! I should be able to do something to make a few extra quid! :j

exil

But who are you going to sell those services to if everyone else is desperately cutting down spending to pay off their mortgage in 2 years?

lottie26_2

Funkygibbons,
Thankyou for this post I don't have a mortgage yet but when I do I will have to buy in todays prices.
I do not see how this reflects the good advice you have put.
I do not have your salary,but I still plan to overpay and my mortgage would by around 135k like yours.
I certainly are not jealous of you I think you are great, as you said you could spend more money on cars, holidays etc and you don't you pay the most you can pay.
I plan to do the same buy the nice things later in life and pay the most I can pay.
I think the people who are haing a go should read your other posts and see you are always there to help people you in no way think you are better than everyone else and I certainly did not get that from this post.
Keep up the good work.