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How to be mortgage free after 8 years

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  • If it's urgent I'd suggest send him/her a PM
  • Rachman_2
    Rachman_2 Posts: 215 Forumite
    The point is, that richer people get trapped into the same type of keeping up with the Jones as everyone else, and the habits involved are just more expensive

    I know people who earn more than £100k a year and they manage to spend it all

    Damned right - I know several City High fliers who make north of £150K who borrow money from mates every month to tide them over till payday

    we are doing much the same things as the OP - the pay rises don't end up in p1ssed away on living a more expensive lifestyle - yes, we have good incomes, but they mean nothing if you don't use the money

    It is possible to pay off a mortgage in next to no time (relatively) - I see people laid into the OP for having worked to get a good job, the logic's right though - if you get a pay rise whatever your wage, don't spend it on sh1te if you can help it, use the extra money - there's a reason why out my schoolmates I am the only one currently driving a car that's worth under £10K but by the same token we today have less than 40% mortgage.

    There's no need to live on beans if you have the money, being evangelical is not the point - common sense is - if we get a bonus at work (and our wages are mostly salary, not with IBank style bonuses) - 75% of it goes off the mortgage and we spend the 25% left as a bonus - it would drive you mad working that hard otherwise.

    Most of missus' mates (and mine) sit there and !!!!! behind our backs to a greater or lesser extent that life's easy for us, whilst they struggle along and life did not kick them the breaks, but they are the ones with new heavy depreciating cars on tick, who laugh at me for having some food in the firdge with reduced labels on it, who chose not to gamble on a move of cities for better jobs, who decided that they would stay put in their starter home, who decided that we were mad in our 20's not to spend what was then a year's wages on a 3 series....., who won't do the overtime or sacrifice some of their time to do more work - leave the OP alone - he's made good decisions and he's made the most of his opportunities - he's rightfully proud of his efforts.

    there's no point simply giving the OP grief - most of it is common sense but people generally prefer to simply say, oh, it's because he's earning a wedge whilst ignoring the main thrust of relative prudence without turning into Scrooge WILL pay off.
  • apbaker
    apbaker Posts: 5 Forumite
    One thing that I do is offset my savings against my mortgage.

    I keep the payment slightly above what is should be and use the offset to pay off my mortgage and ultimately pay less interest. For every £1 you are offsetting you save something:j

    The other good thing is that it is tax efficient, especially if you are a higher rate tax payer. Because you don't earn interest you don't pay tax on what you earn so even more benefit!
  • Thefunkygibbons

    Don't know if you ever post in here any more, but I'll take a shot anyway!

    Read your thread with interest... you're a chartered accountant? I could DESPERATELY use some advice before next Tuesday, if you have time? It's only work-related, nothing exciting :rolleyes:

    Many thanks if you read this in time and can help :)

    I do not visit so often

    I am still looking for a new job

    It is a bit stressful

    But I can only imagine how much worse it would be if we still had a mortgage hanging over our heads
  • ds1980
    ds1980 Posts: 1,213 Forumite
    Hi all,

    Fairly new around here but these forums are fantastic, everybody has there place and opinions and people should just get on with this.

    I would like to say that all these people that bought houses.......a while ago, think if you'd have bought two, three, four houses!!

    I think that there is one thing missing in these posts and thats having a bit of balls, its all well and good saving and scrimping and looking after things but if you don't take a few risks then you won't realise your true potential.

    I took a few educated risks when I was at University and now seem to be reaping the rewards. I have quite a number of properties now spread around the country and am well on my way to retiring in just 3 years now 26. I started with £2k that is it and I was still a non working student at the time of my first mortgage. I would say to people instead of repaying money that youve borrowed in the first place put it into investments....start a business, buy a new house etc etc. I know this isn't for everyone because they have children and work responsibilities etc etc but I dont pay back any of my mortgages someone else does!! Ive earned a hell of a lot more money than id have ever invested in overpayments.

    Instead of overpaying save the money to buy a new house, you only need a few thousand £'s just make sure you do the sums. Your never going to lose money on a house if your careful I don't care what anyone says.

    The best way I find to pay of the mortgages is to reduce the terms and let other people pay off your mortgage for you, Im lucky enough to be in a position now that I don't have to rely on one person the accumulative will look after 2-3 other mortgages if the houses are empty.

    Fortunately now we're ready to have children Im not going to have to scrimp and save when they arrive which was one of my intentions when i started all this. I am also paying off my Mum and Dads mortgage now so they can afford the nice things they deserve and not have to struggle along from day to day.

    Whatever people do with there money is entirely up to them.........it's their money just I wish people would get the best out of it.

    One last thing to those students that were told they can't do part time work......who would ever know and would they throw you off the course....I very much doubt it......take some chances!

    Be Good
  • macca64
    macca64 Posts: 286 Forumite
    Part of the Furniture Combo Breaker
    ds1980 wrote:
    Your never going to lose money on a house if your careful I don't care what anyone says.

    Try telling that to the people who lost there house during the 80's, I don't think they would agree.

    However I do agree long term, it could be a wothwhile investment, however what annoys me is everyone says invest in a property, but no one mentions the stock market! Which I beleive over the longer term has outperformed all other asset classes? So you could choose to not overpay the mortgage but invest in UT's/OEIC's etc, which should outperform property anyway.

    I could go on about the amount of people taking interest only mortgages, who say it doesn't matter about paying it back because houses always go up!

    Rant over.
    2014 running challenge 587.4 miles / 250 miles
  • ds1980
    ds1980 Posts: 1,213 Forumite
    I have quite a lot of the money i have earned in the stock market thankfully a good friend is a broker in London and we do a lot of business together. I think the main thing is that you don't know whats going to happen to a certain degree.....eg have shares in kingston comms which at one point hit £20 a share and now id never see then getting past a couple of quid!! I know for a fact.....well extremely well educated guess that I can buy a property and sell it for more than I paid for it - short and long term, with or with out work needing doing it.

    The eighties happened because people didn't have enough foresight! What you have to remeber is that if interest rates are 15% your saving will receive this so your not actually going to lose again if you research and do your sums.....life evolves around maths. You just have to make sure you have enough savings thats all!!!!

    I never said I had interest only mortgages just that I don't pay my mortgages someone else does! in saying that sometimes you need the capital behind you to get in front so to me it makes no difference as long as you know what to do with your money.
  • Rachman_2
    Rachman_2 Posts: 215 Forumite
    ds1980 wrote:
    I've earned a hell of a lot more money than id have ever invested in overpayments.

    Instead of overpaying save the money to buy a new house, you only need a few thousand £'s just make sure you do the sums. Your never going to lose money on a house if your careful I don't care what anyone says.

    The best way I find to pay of the mortgages is to reduce the terms and let other people pay off your mortgage for you, Im lucky enough to be in a position now that I don't have to rely on one person the accumulative will look after 2-3 other mortgages if the houses are empty.

    Fortunately now we're ready to have children Im not going to have to scrimp and save when they arrive which was one of my intentions when i started all this. I am also paying off my Mum and Dads mortgage now so they can afford the nice things they deserve and not have to struggle along from day to day.
    hang on - I presume what you are saying is that in the biggest property boom in history you did buy to let and leveraged off the back of house price inflation. You then either cashed out some and you simply have your rent from one which meets the mortgage interest payments on the other properties and leaves you with the rent from the others to do what you want with. Which was a smart thing to do at the time - though it required balls of relative steel/complete foolhardiness - I would not rely on such benign conditions going forward though....

    All I can see that you have done is increased your exposure (i.e. a calculated risk) - which was fine as prices rose, but outside of London and a few hotspots is not happening. Or are you suggesting your model still works ?

    Congratulations, but I presume you have used up a lot of profits to buy your own house (or are using someone else's rent to meet that mortgage), plus your comments don't mirror today's reality - show me where you can buy with minimal deposit, where prices will rocket and you can profit take and never have to work again ? If you can do it again the same way, I will take my hat off to you - but i can't see it - maybe I just don't like risks like you took - but it seems to be pie in the sky to suggest that the model is sustainable.

    just seen your second post - so what happens if the equities markets tank ? Are you not keeping a significant amount of cash collateralised and are you not diversifying your portfolio to reduce your risk - I am also entertained by the "broker / friend" comment - most brokers are no different than working girls - they follow the money and do what they have to in order to get it... (am sure your relationship with yours is different and he's going to be godfather to your kids etc. etc. but in the main, they are salesmen....)
  • ds1980
    ds1980 Posts: 1,213 Forumite
    rachman thank you for the post you make a lot more sense than most on here, all my property has been bought within the last 3 years therefore i did not benefit as i would have hoped fullly like people who bought 5 -6 + years ago but of course this did indeed help. I have bought a house today in which i will make minimum of £20k and only paying about £3 k in fee's which isn't bad. Will be completing on a property on the south coast in a few weeks which has taken 6 weeks to complete without doing anythign i will make £20k minimum on this when it goes up for sale the day i complete again only have had to pay about £3k to do the transaction.

    With regard to your comment on the broker i totally take on board what you say however the few friends I have ("true friends") are picked very carefully we have been best friends for 20 years and we make a good living together also now which has made our friendship stronger.

    as far as im concerned ive been very lucky but you dont get to where i am without those big balls i reckon you should have a go at something youve been toying with for a while you never know what might happen!

    be good
  • This guy earns a lot of cash, and he has £700k equity, and he pays £2k a month extra, well done to him, dont knock him for it or the amounts involved, its the principle that is involved that is important.

    I dont eant nearly that much, I dont have nearly that much equity, but I have a mortgage of a similar size and in addition to my £1500 a month repayment that would clear my mortgage in 14 years, I am aiming to pay an additional £1000 a month to clear it in 8.

    Still large numbers to some people I know, but it is relative. If you earn £15k a year you are likely to have a mortgage of no more than £50k and capital repayments of £350 over 25 years. If you could find an additional £50 a month, you would reduce your term from 25 to 17 years. Cant afford that, an extra fiver a month, would knock a year off the term !!!

    Dont knock the advice simply because the numbers seem out of reach. Its the principle that counts.
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