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    • turtlemoose
    • By turtlemoose 13th Mar 14, 12:36 PM
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    MF x 2 by 42
    • #1
    • 13th Mar 14, 12:36 PM
    MF x 2 by 42 13th Mar 14 at 12:36 PM

    I've been overpaying but with no real consistency or effort put in to it, for a while now.

    After getting locoblade's spreadsheet I realised how much I could be saving, so I want to give this my attention.

    Ideally, I'd like to be MF twice by 42. I'm 29 this year (OH is 38 this year). I did once upon a time dream of this being by 40 but times change and I think 42 is more realistic. I am currently NOT on target for this! So there's some hard slog ahead. Sharing the goal will hopefully mean I have to keep trying, as now I know I have to come and update here....

    I have 2 mortgages, both residential, one with consent to let.

    M1: Initially a 50% shared ownership on a refurbished ex-LA house (not a newbuild), bought for 47500 on a 100% mortgage in Nov 2007, fixed rate at 6.49% - at the time that was a good deal on a shared ownership! Then pretty much soon as I signed on the dotted line, rates plummeted and I was kicking myself!!!! But I was still paying less with paying mortgage+rent than I had been with just renting.

    The house was never really worth 95k full price, that was over-inflated by the HA selling it. I was young (21) and stupid, and didn't think to question it. Fast forward to 2010, the price had plummeted so I decided to look at buying the other 50%. The HA sent an "independent" surveyor out who valued it at 85k.....massively over what similar properties were selling for locally. After a very lengthy complaints process with the HA being awkward at every turn, I eventually got them to agree to using a GENUINELY independent valuation. I used a local firm (office around 2 miles from the house) who provided a very detailed comparison in their report and valued it at 65k - that's more like it!! The HA accepted this, and despite having set the ball rolling in May 2010, eventually it completed in Nov 2011. I bought the second half and the freehold for 32500. As interest rates were now much lower, this new mortgage for the 100% of the house was lower than the previous mortgage on 50% plus monthly rent.

    This house is in a really rough area - hence the low price for a 3 bed end terrace. After 4 years living there, I'd sort of got used to it, but I wasn't happy and I didn't feel safe.

    In the midst of this, along came a little surprise... 2 blue lines on a pregnancy test, whoops!

    There was no way I was going to bring up my child in that area, I didn't feel safe as it was, I couldn't have my child living there. My OH lived in a very small rented flat so there was no space for baby and I, plus he has an older son who he has 3/4 nights a week. So we rented a 3 bed house together.

    I explored my options on the mortgaged house - basically in order to sell it I'd need to find 5k - simply didn't have it, nor the means to get it. So after researching renting it out, I approached my lender, got consent to let, and then advertised the house via the LA for people going down the 'homeless' route. The LA offer a bond scheme where they stump up the deposit if the tenant does something they shouldn't. The rental income is very low as I set the rent at the housing benefit levels - no point being higher than that. So it ticked over, mostly, with me subbing it around 50 a month, sometimes higher if there were repairs etc.

    Our rental house developed a quite serious roof leak, our landlord and agent refused to do anything about it, it eventually rendered 2 of the 3 bedroom completely unusable so at the end of our fixed term (luckily only a year), we scarpered out of there.

    With me having been on maternity leave for a year (I'm the main wage earner), my savings were now non existent and I had some CC debt. We moved to another rental. We decided we wanted to buy, but thought it wouldn't be for a good few years yet, probably not until the baby was in school. We viewed a few properties in the summer of 2013 - not to buy, but to get an idea of what we wanted, what price range we were looking at....when we accidentally found THE ONE.

    It was a s**thole!!!! We later found out the house had been empty for at least 12 years, possibly more. However as we walked around this filthy, dated, dark and dingy house, I could practically hear it singing to me about how good it could be. We got in the car after the viewing, looked at each other, and both blurted out that we loved it. After some frantic rejigging of finances and exploring all the options with my mortgage advisor, we realised we could *just* get it. We offered low, they haggled, we ended up at 114500 with a 10% deposit. We completed November 2013 and moved in to the dump!! This is M2.

    Thankfully, most of the work is just cosmetic and also compensating for it being neglected for so long. Despite it being empty for so long, the previous owners had a gas boiler and central heating in stalled in 2003 - as it has been unused it is in great condition, and double glazing installed in 2010. However the kitchen was totally unusable - the actual carcasses were rotting - but luckily my Dad is a carpenter so we got a new kitchen from Wickes for fairly cheap, and zero labour costs apart from a few dinners, thanks Dad!! Unfortunately he lives abroad so we can't set him to work on the rest of the jobs that need doing

    So, we are chipping away bit by bit at the work that needs doing. The top 3 big jobs that need doing are - bathroom full replacement, downstairs loo replacement, and the flat roof on the brick store needs replacing. All of those are on hold as we had to use a CC to pay for the kitchen - so we are just having to put up with those for now.

    My what an essay! I don't blame you if you didn't read it all, but thought I'd explain it just in case anyone wants to know!
Page 2
    • edinburgher
    • By edinburgher 18th Mar 14, 6:03 PM
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    Yes there is interest on the loan (4.9%).
    Is it higher than your mortgage? If so, it's in your best interest to pay it off sooner than OPing the mortgage
    • turtlemoose
    • By turtlemoose 19th Mar 14, 8:48 AM
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    oh dear, edinburgher you make my brain hurt! And there was me thinking I was not too bad at maths.

    4.9% of 10k is less than 4.89% of 102k , so how come paying off the loan is better.

    I'm sure you're probably right, but I just don't get it.... again I feel like I'm missing the bleedin' obvious!
    • turtlemoose
    • By turtlemoose 19th Mar 14, 9:45 AM
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    I snowballed it, you're definitely right (I thought you were, but I still don't understand it! ARGH!).

    I'm going to read my snowball results and try to get my head around it, then swap my payments around.

    What this means is, if my financial situation stays the same, I won't be OPing my mortgage at all, until April 2016.

    Feeling a bit wounded and disappointed, off to go and sulk in the corner for a bit.....
    • edinburgher
    • By edinburgher 19th Mar 14, 10:00 AM
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    4.9% of 10k is less than 4.89% of 102k , so how come paying off the loan is better.
    Two things to consider here:
    • The reason I phrased my point as a question is because you don't appear to have mentioned your mortgage interest rate anywhere else in the thread?
    • The power of the snowball is that the principal doesn't really matter (i.e. 10k, 102k, doesn't matter). The single consideration is the interest rate, because a higher interest rate will always cost you more for and is therefore a bad thing!) So, while there are some scenarios where paying off a lower interest rate make sense, they are few and far between.

    As it stands, there's very little difference between your mortgage and your loan in terms of rates. If I were in your shoes, I'd still pay off the loan. You can ask your mortgage lender for a payment holiday if you've OPed (possibly), to change the term of the loan, or to go interest-only. The personal loan provider is less likely to be flexible (in my opinion).

    Edinburgher, here to make your head hurt
    • turtlemoose
    • By turtlemoose 19th Mar 14, 11:25 AM
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    I've been reading the snowball results over and over (and messing about with the figures), and yes I do see what you mean about the mortgage provider being more likely to be more flexible than the loan provider.

    I have mentioned my interest rates but as a one-liner so they kinda got lost, they are RENTAL 3.19% HOME 4.89% LOAN 4.9%

    I'm realising my mistake is that I was focussing on the mortgages and not including my other debt, just letting that tick over. I need to take a step back and look at the bigger picture.

    So, when I also add in the other things I owe.....

    Personal Loan: Current balance 9256.10 at 4.9% 55 months remaining. I am going to change 165 mortgage OPs (the ones that the rental pays for) on to overpaying this, from April. This will have this paid off in September 2016.

    1745 to DS. Interest free obviously, and he's only 21 months old so has no idea, in theory we could defer this HOWEVER I'm concerned that if I put this off, then there'll be another excuse and another and so on, and we will never pay him back.

    With that in mind, I'm going to keep paying my monthly 50 to DS until he's paid back, because regardless of interest costs elsewhere, IMO that's the right thing to do. (As in, morally right, not financially right) I am going to add the 5 from the Halifax reward too, as this has him paid back by Christmas 2016 and we'd like another baby to be on the way by then, so it has DS debt paid off and gone before having to worry about a new one.

    I also need to look at my credit card debt. Current balance 4367.68 interest free until September 2014. I was paying just above minimum payment and planned to tart it, but actually I need to make sure I have provisions to get rid of this before the interest free ends and then it's not hanging over me. Previously I was sort of just expecting it to tick over on the 0% but actually I need/want this gone - if our financial circumstances changed for the worse then we need to make sure we could pay it.

    The plan for this then: in April transfer 2357.32 to the new Nwide card, pay 75 off the original card for the month too. With the balance transfer fee, this will then give me:

    MBNA CARD: 1935.36 interest free until Sept 2014
    NWIDE CARD: 2375 interest free until May 2016

    I'm thinking the plan is this:

    I now have 100 a month available - 50 is the amount I usually pay off the CC, plus 46 OP on to the 'home' mortgage from joint account - I'll round this up to make the 100.

    Pay 25 a month off Nwide (just over min payment). Pay 75 a month off MBNA. In September, get new 0% card for remaining MBNA balance (using existing card as example, 29 months interest free, 3% balance transfer fee). Total will be 1684.42 on new card, interest free until Feb 2017.

    Then change the payments, pay just over minimum on the Santander (so 17 a month). Pay 83 a month off Nwide. This will leave a shortfall of 847 at the end of the interest free term. I'm not sure what to do about that right now.

    As the personal loan will be paid off in Sept 2016, from October 2016 I will add that payment to the now-Santander card. This will clear it in December 2016.

    Assuming I clear the rogue 847, this will have be DEBT FREE (excluding mortgage) from JANUARY 2017.

    By that point, I would in theory be just about preparing to go back to work after maternity leave, with full time nursery fees to pay (same as now) plus wraparound care for the older one who will then be at school.

    Assuming OH and I have the same income, we could then OP the HOME mortgage (leaving the btl alone!!) with all the money that we were previous spending on debt, minus the extra childcare costs - I reckon around 400 a month, then when no2 goes to school, we could double this. This would have the HOME mortgage paid off in the 4 months before my 40th birthday! And the BTL mortgage would have an outstanding balance of 30k at the same time.

    We could then afford to pay off the BTL by Dec 2026 (making me 41) or maybe that should just tick over still and we'll just have LOADS of disposable cash every month?!?!?

    Basically doing this the right way around, even with another child in the mix, assuming our jobs stay the same (gamble I know), actually I *can* hit the MF x 2 by 42 target! I can stop sulking!!!!

    The only thing I need to figure out is how to get the money together for maternity leave........
    • gallygirl
    • By gallygirl 19th Mar 14, 1:14 PM
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    1745 to DS. Interest free obviously, and he's only 21 months old so has no idea, in theory we could defer this HOWEVER I'm concerned that if I put this off, then there'll be another excuse and another and so on, and we will never pay him back.
    What interest would you be able to get on the 1745? Why not set up a spreadsheet to calculate it, then pay him back with interest when ypu've paid everything else off?

    this has him paid back by Christmas 2016 and we'd like another baby to be on the way by then, so it has DS debt paid off and gone before having to worry about a new one.
    Well, if your 21 month old has acquired 1745 since birth I assume the new baby would do similar so if all else fails at least you'd have another interest free loan available .
    A positive attitude may not solve all your problems, but it will annoy enough people to make it worth the effort
    Mortgage Balance = 0
    "Do what others won't early in life so you can do what others can't later in life"
    • turtlemoose
    • By turtlemoose 19th Mar 14, 1:29 PM
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    New baby won't accumulate that much! DS' money was mostly made up from the child benefit, we've never spent it, just put it straight in to savings for him. It's 20.30 a week so soon adds up. The rest is from a standing order from me (10 a month), various tilly tidies from my personal spends (around 150 worth last time I checked), plus birthday/christmas money.

    When I bought the second house, that 2k made the difference between being able to buy it and not, so I used it.

    I feel crap about it though and I don't want to do it again.

    Second child gets 13.40 a week in CB - I can't have one child saving 20.30 a week and one 13.40 a week, so I'd pool it all and split the pot 50/50 between them at dishing out time.

    I think there will come a time when I'll need to use the child benefit for his expenses - at the mo he's pretty cheap, everything is second hand and he's very easily entertained I'm anticipating school age is when it gets expensive - uniform, "my friend has got a XYZ", school trips, that sort of thing. But at the moment I've always pretended we've never had that money.

    I'm in two minds now as to whether I should be using that money now, and then build up savings for the kids once we are MF, or at least DF????
    • Hurdler
    • By Hurdler 19th Mar 14, 4:19 PM
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    Ooof I thought I had caught up when I saw Edinburgher's post...

    OK - not sure if this helps at all but here's what I did way back in the day.

    First thing I did was get shot of a consolidation I had that got me out of some seriously bad CC debts.

    Then where I had borrowed against the flat for things like buying a share of the freehold etc, they were much like your additional mortgages, and I got shot of them next.

    Then I ploughed into my mortgage (somewhere along the way I got shot of a cruddy endowment policy and made it a straight repayment mortgage) and got that down to enough that I could borrow against it, to help put down a hefty deposit on Hurdler Mansions (see the stats of that little headache in my sig).

    I would carry on morally putting money aside for the little'uns but put a more significant percentage of what funds you can towards the CCs, then the little mortgages.

    Just keep chip chip chipping away on all fronts - someone here came up with a GREAT idea of allocating percentages to all of these spinning plates - and they are not set in stone.

    Best of luckski!

    Mortgage @ March 2008: 194,965 ; Lightbulb Moment: July 2011: 164,926; End Date: March 2033

    MORTGAGE FREE: September 2015
    • edinburgher
    • By edinburgher 19th Mar 14, 8:12 PM
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    Child Benefit isn't intended to be a trust fund for your child, but to help with the costs of raising him

    I'm not saying that to be argumentative and challenge your decision to keep it - it's a lovely idea - but you need to think about these things holistically.

    There's no moral imperative to give him the money and in fact, it's been proven that children given large handouts are statistically less likely to be as successful as their peers in terms of money management etc. (Jump in here GG )

    If using the money at this point in his life has saved you money, it will ultimately provide him with a more stable home and will give you more options to help him out in later life. That's not carte blanche to rob his piggy bank, but hopefully it helps with perspective?

    We've got a baby on the way, not trying to be that guy who talks about things he doesn't really have any say in/on
    • turtlemoose
    • By turtlemoose 19th Mar 14, 8:46 PM
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    Any money saved for him he

    A) wouldn't know about it until the day he received it
    B) this day would be unlikely to come before his 25th birthday at least
    C) wouldn't happen at all if I thought he'd spunk it on crap

    I've messed about with spreadsheets all day. I'm going to stop saving the child benefit, and pay it towards the credit cards. I'm also going to stop stretching ourselves in order to pay him back all that amount. It got spent on the house that he lives in, the house in a catchment area for good schools, that is near his uncle and nan, etc etc etc. he'll get it back and then some as inheritance too. Out of money that was actually his (ie birthdays etc), we borrowed 440. I'm going to stop when we have paid him back 500. That's not a bad interest rate

    I've moved the mortgage OPs to being loan OPs too. We will be debt free in March 2016, AND not having any debt payments outgoing will mean that baby can be born that month (onwards), we can afford for me to have a year maternity leave, then back to work full time - even with childcare we can then hammer the OPs on the mortgage.

    So regretfully I have withdrawn from mfw 2014, as I am unlikely to make any OPs until 2017. However, even though I'm not starting my OPs until 3 years time, it actually has me mortgage free sooner than if I was oping now! Crazy! I'd have never got through those sums without you all, thank you so much!!

    I'm still a mf wannabe, I'm just doing the proper prep work first
    • turtlemoose
    • By turtlemoose 12th May 14, 1:45 PM
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    I thought I'd come and update, so those who are interested can see, and if nobody is interested well at least I have a place to come back to for reference and to track progress

    BTL Ticking over - making min payments, using profit to go in to debt (see below).

    HOME I'd already rounded the payments up from 593.xx to being 600 - so making a tiny OP each month but just leaving it at that for now.

    DEBT I last posted here in March. At that point my non-mortgage debt stood at 13783.78. Before posting here, if anyone had asked me if I was in debt, I'd have said "Not really, loan and a cc, no big deal". Yikes! How wrong I was! Loan is 4.9% and rest interest free. Two months later my total is 12640.32. Seeing as we have an average 720 nursery bill a month, I'm pretty pleased with this progress.

    Debt breakdown:

    120 to DS - last payment July
    CC1: interest free until May 2016 - 2466.92 - currently paying minimum payments +1
    CC2: interest free until Sept 2014 - 1101.74 - throwing all the money at this at the moment, so that it is gone when the interest free period is up.
    Loan: 4.9% - current balance 8951.66 - currently paying min payment BUT soon as CC2 is paid then all the spare cash will go here. My estimated loan free date is now September 2015 (instead of November 2018). At this point CC1 will have a balance of 1793 and with no other debt and no loan payment, I can smash this in just 3 months, with the final payment in December 2015 clearing the card AND leaving 450 to put in the maternity leave pot. Assuming I stick to Baby No2 arriving March 2016 (onwards), I can then save our debt repayment money as maternity money giving us a minimum pot of 2750, which will make the difference between a frighteningly tight mat leave and a comfortable one.

    Then, when I'm back at work, even budgeting for a full time nursery place AND wraparound care for one in school, assuming the same income as now we will have 300 pm available for mortgage OPs from April 2017. This is excluding any BTL profit, so this figure could be higher. Of course when no2 goes to school we'd have less childcare costs and could OP more, but even if we stuck at 300 that'd have me mortgage free in March 2027 - When I'm 41.

    I love having a plan like this, and while I know things could change, we could lose jobs or the opposite get pay rises (haha I wish!), for now I know where we are and where we are going, and I can see my MF journey shining ahead of me
    • nellis10
    • By nellis10 12th May 14, 2:06 PM
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    Caught up on your thread!

    I'm using my CB to pay off a couple of loans I have - Divorce and Car...I figure using it now (Lightbulb Moment 3 weeks ago!!) to clear my two loans will stand me and DS in better stead when I am completely debt free and can therefore (hopefully) stand him in good stead when he leaves school either by putting a car on the road for him, or paying his living expenses at Uni (He'll pay his own tuition on the grounds he is likely to get a decent paid job if he goes to uni! )

    I'm just starting to OP on loans/mortgage and will be starting extra small too!

    I've just got a little spreadsheet I made up myself which doesn't really take into account any interest not toploaded, but does me good anyway...but if you have a link to the spreadsheet template you have I'd be most grateful!
    Baby Step 1 = 1000 EF
    Baby Step 2= Debt Free by Apr 2017
    Baby Step 3 = Full EF 650/8000
    Mortgage Free by 2023!!
    • turtlemoose
    • By turtlemoose 12th May 14, 2:18 PM
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    This is the one I use nellis -
    • Welshlassie
    • By Welshlassie 12th May 14, 6:18 PM
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    Hey TM, that;s sounds like a really sensible plan, well done you'll be debt free and paying that mortgage down before you know it. As you have said anything can change in that time so having some flexibility is a good idea.

    Good luck.
    • turtlemoose
    • By turtlemoose 9th Jul 14, 2:59 PM
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    It's been 2 months so updating my records.

    BTL Ticking over - making min payments, using profit towards debt (115 a month). Tenant has informed me she wants to renew for 12 months at end of tenancy (Sept) due to her kid getting a place in a school she likes. Huge relief to have that security.

    HOME no change, paying min payment.

    DEBT Total outstanding 11250.55 -18.38% of my starting debt paid off in 4 months.

    I've paid back DS (and a bit more), there is only 541.21 left on CC1 that will be paid off before interest free ends in Sept.

    There's 2414.44 on CC2, currently paying min payments plus 1, as it is interest free until May 2016.

    The personal loan balance is currently 8294.90 with 4 years 3 months remaining. However, with CC1 finishing, I'm going to be heavily OPing this, between 250 and 500 a month. As the interest is calculated monthly on it, I'm looking forward to seeing this figure drop.

    Feeling optimistic about getting on those mortgage OPs in the near-ish future
    • turtlemoose
    • By turtlemoose 11th Jan 15, 11:32 PM
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    Gosh, just catching up on MSE and it has been a long time since I updated this.

    We had a rough last half of 2014, OH broke his foot end of July and had to have 5 weeks unpaid off work, and upon his return, his boss was an !!!, ultimately leading to OH being unemployed from the start of Sept. He got a new job the week before Christmas, so we will be back overpaying, but we haven't managed what I'd hoped with almost 5 months of him not earning. Luckily I was able to do some overtime which lessened the blow, but that was damn hard on top of a full time job and a 2 year old.

    Coupled with that, my tenant decided to do a bunk shortly after signing up for another year, leaving a small amount of arrears and a kitchen full of dog s#"+. I have had new tenants move in end of November, but their hb claim has still not been sorted so struggling with that at the moment. We had previously been taking an income of 115 a month from the rental, so it was a blow to the OPs.

    Anyway, debt stands at:
    Credit card (interest free) 2192.77
    Loan 5374.65
    Tax credits overpayment (interest free) 900
    Total: 8467.42

    Still making minimum payments on both mortgages.

    I will come back tomorrow and post the plans for this upcoming year, ultimately the target is to pay off 65% of our debt.
    • M0ney
    • By M0ney 12th Jan 15, 7:36 AM
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    • 188 Thanks
    Just seen this one for the first time and skimmed through most of it, sorry to hear of your misfortune at the end of 2014 but good luck, hope you are able to get remain on track.
    • gallygirl
    • By gallygirl 12th Jan 15, 8:54 AM
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    Crikey - here's to 2015
    A positive attitude may not solve all your problems, but it will annoy enough people to make it worth the effort
    Mortgage Balance = 0
    "Do what others won't early in life so you can do what others can't later in life"
    • turtlemoose
    • By turtlemoose 12th Jan 15, 10:17 AM
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    Well, something I feared a lot happened in 2014 - OH unemployed and tenant disappeared after damaging the property - and we survived. It wasn't easy, but we got through it without adding to our debt or mortgages so I'm taking that as a win! And I'm also not so worried about it happening again, now that I've dealt with it I know I can cope, if that makes sense.

    I've just realised the post above isn't a true January figure, as the loan does not recalculate online until the 21st, so I will update it later.

    As of the 31st December, our total debt was 8559.66. So that was 37.9% of the starting debt paid off in 2014. It works out at overpayments of 2258.19 - which doesn't really feel like very much but I guess with the circumstances it was ok.

    For 2015, the aim is to pay off 65% of the starting balance. This is an overpayment of 2410.66 over the year - which as we did a similar amount last year means we should be able to do it this year, right? OH is earning again but also we are now a two car household. This means more expenses being accounted for so less free for OPing each month.

    *IF* we manage this, our debt at the end of the year will be 2995.88 - so sub the 3k mark. It's a shame as I'd hoped to have all debt gone by March 2016 and this doesn't look likely now, meaning my MF plans are also set back a bit.

    BUT I'm not quitting! I am going to be doing a bit of overtime at work if I can get it, and any money earned there will go to OPing debt - as the debt is part and parcel of my MF journey.

    Oh the mortgages! Suppose I should post about those too.

    HOME: balance at end of year was 100,600. Little bit gutted we hadn't dropped it below that 100k mark, but oh well Puts us at just under 87% LTV right now so by the time the deal ends in November we should hopefully just sneak in to sub 85% LTV and be able to get a decent deal.

    BTL: balance is now sub 50k which is quite exciting as a quick snoop on Rightmove has similar properties selling in the range of 72-85k. So I'm feeling pretty good about that equity. If I go by purchase price (ignoring local increases), I'm at 76% LTV. This is ok at the moment, as existing lender has been happy to give consent to let and keep it as a residential mortgage. However it does limit me to moving the mortgage as this fix is up in November this year too - so I will probably have to stay with the same lender as otherwise I'll have to convert to a BTL mortgage and most seem to want less than 70% LTV.

    New tenants: whilst currently in arrears to the tune of 2 weeks rent AND still owing part of the deposit, I'm cautiously optimistic. Their arrears are entirely due to them being paid the 2 bedroom housing benefit rate (I get paid it directly), and with 4 kids both genders, I've checked and they are definitely entitled to the 3 bedroom rate. I'm trying to be understanding as it's not their fault the Council have done it wrong, and then it has been delayed by the Council shutting for all of Christmas and new year.
    Last edited by turtlemoose; 12-01-2015 at 10:21 AM. Reason: edited some wrongly calculated figures
    • turtlemoose
    • By turtlemoose 12th Jan 15, 10:24 AM
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    Oh I forgot that DS turns 3 in June, meaning from September we will save 47.85 a week off his nursery bill during term times, due to his 15 free hours education entitlement.

    I intend to use this as OPs wherever possible - we've managed without it so far, right?! Not sure I'll manage to be so disciplined when the time comes though
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