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  • FIRST POST
    • Nichelette
    • By Nichelette 22nd Dec 18, 7:16 PM
    • 1,882Posts
    • 3,118Thanks
    Nichelette
    The first hurdle - Nichelette v the huge mortgage
    • #1
    • 22nd Dec 18, 7:16 PM
    The first hurdle - Nichelette v the huge mortgage 22nd Dec 18 at 7:16 PM
    I'm starting this diary in anticipation, so that I have focus for 2019.

    It's a bit of a long story, but to give the key facts I'm 32 and married. I graduated in 2008 into recession which wasn't the best, and live in the south east where house prices are absolutely insane. When I was younger I helped both of my parents a LOT financally which hasn't done me any favours. I won't go into detail as it's a very long story, but the outcome is I'm down a lot of cash. Rampant HPI made it harder to get a house, and I have to pay stamp duty as I'm sadly not legally a first time buyer as I was temporarily on my dad's mortgage to cover affordability after he was made redundant during the crash and took a lower paying job.

    Anyway, my dream since I was about 10 was to have my own home. I had this book I would cut and stick all the houses I liked in, then I'd plan how I'd decorate and furnish them. It has always been my main aim to make sure we have some security in housing terms as the insecurity of renting has always worried me.

    We have been saving hard and managed to reach 50k which has allowed us to buy what I'd call a 2 bed starter house. We're just on the verge of exchanging (hopefully!). My plan is to overpay as much as possible for many reasons. I've never liked being in debt and the amount we will owe is huge so I want to reduce it as quickly as possible.

    House is 320k. Deposit is 32k and stamp duty is 6k. Fees and survey are probably around another 4k or so, but I've lost track to be honest.

    The arrangement fee has been added to the mortgage, so we're looking at a starting figure of 289.5k .

    We both work full time and don't have kids, so we can chuck quite a lot at it. The rate is fixed for 2 years, then the plan is to see if we can remortgage to something better.

    The diary is to keep me focused as my DFW ones helped a lot in the past.

    Whilst we have been waiting for the legal stuff to go through we have continued to save. I budget meticulously and record everything, but have been slacking since our offer was accepted as my plan is to move, see how much is left and plan from there. I think we will already have an emergency fund so we can start overpayments immediately.

    I will do a proper SOA once we have moved and I have a proper idea of what bills will be, but I anticipate we're looking at around 2k. We take home about 4k so should be able to make some decent overpayments.

    If there is anyone else out there with a humongous mortgage please feel free to join me, or anyone else for that matter. I'm sure you all have some very good advice .

    Thanks for reading if you got to the end!
    Finally bought a home
    Starting mortgage £289,500 31.01.19 - Current outstanding £274,272.15
    MFW #86 - Aiming for 15k in 2019
    Overpayments since 27.03.19: £9693.95
Page 1
    • Nichelette
    • By Nichelette 22nd Dec 18, 7:25 PM
    • 1,882 Posts
    • 3,118 Thanks
    Nichelette
    • #2
    • 22nd Dec 18, 7:25 PM
    • #2
    • 22nd Dec 18, 7:25 PM
    Stats as of 16.06.19:

    Overpayments in 2019 - £5897.11/£15,000
    Daily interest - £20.36
    Projected overpayments to 2026 (because this is a long haul..) -

    2019 - £15,326 - Overpaid 39.31% (broadly on target)
    2020 - £33,748
    2021 - £54,551
    2022 - £76,527
    2023 - £98,475
    2024 - £120,397
    2025 - £142,292
    2026 - £151,417 (to May, when I'll be 40)

    Beyond this? Move to house with bigger kitchen

    SOA as of 10.05.19:

    Statement of Affairs and Personal Balance Sheet

    Household Information

    Number of adults in household........... 2
    Number of children in household......... 0
    Number of cars owned.................... 2

    Monthly Income Details

    Monthly income after tax................ 1980
    Partners monthly income after tax....... 2165
    Benefits................................ 0
    Other income............................ 0
    Total monthly income.................... 4145


    Monthly Expense Details

    Mortgage................................ 1161
    Secured/HP loan repayments.............. 0
    Rent.................................... 0
    Management charge (leasehold property).. 20
    Council tax............................. 140
    Electricity............................. 37
    Gas..................................... 37
    Oil..................................... 0
    Water rates............................. 50
    Telephone (land line)................... 0
    Mobile phone............................ 21.5
    TV Licence.............................. 12.07
    Satellite/Cable TV...................... 20
    Internet Services....................... 25
    Groceries etc. ......................... 120
    Clothing................................ 20
    Petrol/diesel........................... 120
    Road tax................................ 13
    Car Insurance........................... 50
    Car maintenance (including MOT)......... 30
    Car parking............................. 0
    Other travel............................ 0
    Childcare/nursery....................... 0
    Other child related expenses............ 0
    Medical (prescriptions, dentist etc).... 10
    Pet insurance/vet bills................. 20
    Buildings insurance..................... 10
    Contents insurance...................... 10
    Life assurance ......................... 0
    Other insurance......................... 0
    Presents (birthday, christmas etc)...... 50
    Haircuts................................ 12
    Entertainment........................... 400
    Holiday................................. 0
    Emergency fund.......................... 0
    Total monthly expenses.................. 2388.57



    Assets

    Cash.................................... 7500
    House value (Gross)..................... 320000
    Shares and bonds........................ 0
    Car(s).................................. 2500
    Other assets............................ 0
    Total Assets............................ 330000



    Secured & HP Debts

    Description....................Debt......Monthly.. .APR
    Mortgage...................... 283246...(1161).....2.63
    Total secured & HP debts...... 283246....-.........-


    Unsecured Debts
    Description....................Debt......Monthly.. .APR
    Sofa...........................91.52.....22.88.... .0
    Credit card....................3400......75........0
    Total unsecured debts..........3491.52...97.88.....-



    Monthly Budget Summary

    Total monthly income.................... 4,145
    Expenses (including HP & secured debts). 2,388.57
    Available for debt repayments........... 1,756.43
    Monthly UNsecured debt repayments....... 97.88
    Amount left after debt repayments....... 1,658.55


    Personal Balance Sheet Summary
    Total assets (things you own)........... 330,000
    Total HP & Secured debt................. -283,246
    Total Unsecured debt.................... -3,491.52
    Net Assets.............................. 43,262.48


    Created using the SOA calculator at www.stoozing.com.
    Reproduced on Moneysavingexpert with permission, using other browser.
    Last edited by Nichelette; 16-06-2019 at 6:04 PM.
    Finally bought a home
    Starting mortgage £289,500 31.01.19 - Current outstanding £274,272.15
    MFW #86 - Aiming for 15k in 2019
    Overpayments since 27.03.19: £9693.95
    • beanielou
    • By beanielou 22nd Dec 18, 10:48 PM
    • 67,404 Posts
    • 305,593 Thanks
    beanielou
    • #3
    • 22nd Dec 18, 10:48 PM
    • #3
    • 22nd Dec 18, 10:48 PM
    Happy shiny new diary
    Lou~ Debt free Wanabe No 55 DF 03/03/14. MFW. 16 months to mortgage freedom.
    **Credit card debt free 30/06/10~**
    **Weight loss 2 stone 11 lbs **

    "A large income is the best recipe for happiness I ever heard of" Jane Austen in Mansfield Park.
    ***Fall down seven times,stand up eight*** ~~Japanese proverb.
    It starts with you, it starts from now. *** It is ok to be me.***
    ***Keep plodding***
    Out of debt, out of danger. ***Be the difference.***
    • SDLT Geek
    • By SDLT Geek 23rd Dec 18, 6:33 AM
    • 711 Posts
    • 486 Thanks
    SDLT Geek
    • #4
    • 23rd Dec 18, 6:33 AM
    SDLT, first time buyers' relief, previously on dad's mortgage
    • #4
    • 23rd Dec 18, 6:33 AM
    I have to pay stamp duty as I'm sadly not legally a first time buyer as I was temporarily on my dad's mortgage to cover affordability after he was made redundant during the crash and took a lower paying job.

    House is 320k. Deposit is 32k and stamp duty is 6k.
    Originally posted by Nichelette
    Some research might save you £5k in stamp duty land tax. If you took a share in your dad's house then yes, you are right, you do not qualify as a first time buyer for SDLT purposes.

    But you might well not have taken a share in your dad's house. It is irrelevant that you assumed liability on his mortgage. It would not matter if your name went onto the registered title. What matters is whether you had an underlying share in the property. Any share in the property, however small, would stop you now being a first time buyer. But there is a good chance that you had no beneficial interest at all.

    This issue is dealt with briefly in HMRC guidance here:

    https://www.gov.uk/government/publications/stamp-duty-land-tax-relief-for-first-time-buyers-guidance-note Chapter 3 middle paragraph and Chapter 8 Q16

    explained in the pdf linked from here: https://www.blakemorgan.co.uk/news-events/blog/sdlt-first-time-buyers-relief/ at 3.2.

    https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm09764 (the last paragraph)

    with some support here: https://www.blakemorgan.co.uk/news-events/blog/bank-mum-and-dad-concessionary-purchases/ (see the heading "Bare Trusts").

    I suggest you get digging in old papers! How long ago was it that you were on your dad's mortgage?
    • Nichelette
    • By Nichelette 23rd Dec 18, 5:35 PM
    • 1,882 Posts
    • 3,118 Thanks
    Nichelette
    • #5
    • 23rd Dec 18, 5:35 PM
    • #5
    • 23rd Dec 18, 5:35 PM
    Thank you for the advice. I thought I had researched the stamp duty to death (it's only due to a broker that I have been able to get off his mortgage which was necessary as the additional stamp duty was a lot of money).

    I'm not really sure if I had a share or not, or how I would prove that either way. I was on the mortgage and the deed, so I assumed that was classed as 'ownership' for stamp duty purposes. All I can say is I have nothing financially to show for it, and have no claim on the house now.

    Brief summary:

    Mortgage was taken out in 2010 when my mum came off and I went on due to parents divorce

    No money/anything changed hands, but I went on the mortgage and the deeds

    At the time house value was approx 180k and mortgage was 100k

    My dad has paid the full mortgage sum for the duration that I was on it

    House is now worth approx 300k

    I was removed from mortgage and deeds in September. I have no claim to the house and did not receive anything for this

    I have not been living in the house for the last 3 years

    Not sure if any of that is relevant though. To be honest I'm just grateful I'm no longer on it so husband and I can finally get on with our own lives.
    Finally bought a home
    Starting mortgage £289,500 31.01.19 - Current outstanding £274,272.15
    MFW #86 - Aiming for 15k in 2019
    Overpayments since 27.03.19: £9693.95
    • SDLT Geek
    • By SDLT Geek 23rd Dec 18, 5:55 PM
    • 711 Posts
    • 486 Thanks
    SDLT Geek
    • #6
    • 23rd Dec 18, 5:55 PM
    • #6
    • 23rd Dec 18, 5:55 PM
    You could see if you can find the papers from 2010, especially to see if there was a transfer into joint names which might well have had clauses setting out the beneficial ownership. Or even better there might have been a "declaration of trust" in 2010. The 2010 divorce papers might spell out what was to happen to the beneficial ownership of the property.

    It is possible that the paperwork from September 2018 when you came off the mortgage and deeds might make it clear whether or not you had a share in the property. I expect solicitors were involved, you could ask them for their file.
    • Nichelette
    • By Nichelette 23rd Dec 18, 6:33 PM
    • 1,882 Posts
    • 3,118 Thanks
    Nichelette
    • #7
    • 23rd Dec 18, 6:33 PM
    • #7
    • 23rd Dec 18, 6:33 PM
    Thank you. I'm seeing my dad tomorrow. He has the paperwork so I'll have a look.

    I don't believe there was any declaration of trust, I think divorce just stated that my dad had to sell the house or pay my mum off when youngest child left education, but I will double check that also.

    I signed something to confirm I would have no interest in the property going forward when I came off, so I assume that means I had one before, but again I will look.
    Finally bought a home
    Starting mortgage £289,500 31.01.19 - Current outstanding £274,272.15
    MFW #86 - Aiming for 15k in 2019
    Overpayments since 27.03.19: £9693.95
    • SDLT Geek
    • By SDLT Geek 23rd Dec 18, 7:04 PM
    • 711 Posts
    • 486 Thanks
    SDLT Geek
    • #8
    • 23rd Dec 18, 7:04 PM
    • #8
    • 23rd Dec 18, 7:04 PM
    Crossing my fingers for your Christmas Eve gathering!
    • Nichelette
    • By Nichelette 23rd Dec 18, 7:52 PM
    • 1,882 Posts
    • 3,118 Thanks
    Nichelette
    • #9
    • 23rd Dec 18, 7:52 PM
    • #9
    • 23rd Dec 18, 7:52 PM
    Thank you

    I've just updated the SOA post to give an indication of how things will be once we move. As I've mentioned we should already have an emergency fund, so we're left with approx 1700. We can overpay by 10% a year without penalty, though I doubt we'll do the whole 1700 as that does seem like an awful lot.

    Mortgage is over 30 years due to affordability, but they didn't factor in that I'm excellent at budgeting .

    Our food costs are low as I'm veggie which saves a lot, and whilst husband is a meat eater he is often happy to eat the same as me and doesn't have meat with everything. I cook most of our food from scratch.

    We both have a car at the moment (both old). Mine is really a back up as we live somewhere with really poor public transport so we need a car to get to work in case the other fails. We're moving into the actual village centre rather than the outskirts and will be within walking distance of the train station, so we will probably go down to one when mine is no longer viable. It's very cheap to run (tax and insurance are about £300/year).

    I do a few things that get extra income - mostly surveys, shop & scan and matched betting. My husband occasionally gets overtime but sadly I never do. We both work for the same company and have very secure jobs which is part of the reason we're buying now as I'm a bit doubtful about where the economy is heading and would otherwise be more cautious. We're due an inflationary pay rise in April so we'll see what that is. I also have about 4k of student loan outstanding. I have about £100 deducted a month for this, so it should be gone in about 2.5 years.
    Finally bought a home
    Starting mortgage £289,500 31.01.19 - Current outstanding £274,272.15
    MFW #86 - Aiming for 15k in 2019
    Overpayments since 27.03.19: £9693.95
    • greent
    • By greent 24th Dec 18, 8:16 AM
    • 8,234 Posts
    • 83,668 Thanks
    greent
    Hello and welcome! There are a few others I've seen with large mortgages. Tilly had a large mortgage but it's now paid off - but her diary is a good read

    You sound very organised
    x
    I am the master of my fate; I am the captain of my soul
    Repaid mtge early (orig 11/25) 01/09 £124616 01/10 £104927 01/11 £89873 01/12 £76317 01/13 £52546 01/14 £35356 01/15 £12133 07/15 £NIL
    BTL Mtge 12/16 £69786 12/18 £54829 2019 OPs (#18) £4675/£5K
    Net sales 2019 £619.96/£500
    • billy2shots
    • By billy2shots 24th Dec 18, 8:44 AM
    • 349 Posts
    • 384 Thanks
    billy2shots
    Sound so like you have everything under control. Your gas and electric spends seem to be a bit to low. Is it definitely £44 a month combined?

    Looks like you are well on top of things. Your mortgage amount isn't so worrying if your income far exceeds your outgoings allowing for plenty of 'spare cash'

    To put it into context I have 2 kids, 2 cars and earn £3100 a month after tax (wife is very part time £300 a month) and have a £215k mortgage just about to start.
    Mortgage repayments of £840 a month is a bit lower than yours but that's balanced out by your higher income.
    I also live frugally so not expecting any problems.

    It looks like you have done your sums well. Don't be daunted by the headline figure. Overpaying soon gets that number moving in the right direction. Remember, any overpayment is all capital and not interest so every little helps.
    • Tropically
    • By Tropically 24th Dec 18, 2:34 PM
    • 372 Posts
    • 1,196 Thanks
    Tropically
    I am a similar age, similar situation! I also have a large mortgage and similar salary to you. I hope the Stamp Duty situation is in your favour!
    Mortgage started at £318,000 in June 2016. Original MF - 2041
    2017 OPs: £7000/£7000
    Mortgage in Nov 2017 - £297,808
    • Nichelette
    • By Nichelette 25th Dec 18, 6:08 PM
    • 1,882 Posts
    • 3,118 Thanks
    Nichelette
    Thank you all. I'll definitely look through some diaries, especially those with bigger mortgages. It would be nice too see how people are approaching them and cheer each other on .

    Gas and electric figure is what we're paying at the moment. I expect it will increase, though I'm not sure what to expect to pay yet so I'll amend it once we have moved and I have a better idea. At the moment we're in a 1 bed flat which is 4 years old and we're moving to a 2 bed house which is 15 years old so hopefully it will be fairly energy efficient still. As we're both out all day I think that helps keep the bill low too.

    I'm thinking into the future, but I'm mostly concerned about the cost of we had kid(s) as paying on one income would be prettymuch impossible due to how its split between the two of us. I can't do my job part time, and we'd have to pay for full time childcare which would make things harder, but that is a bridge to cross in the future so I'm not going to worry about it now!
    Finally bought a home
    Starting mortgage £289,500 31.01.19 - Current outstanding £274,272.15
    MFW #86 - Aiming for 15k in 2019
    Overpayments since 27.03.19: £9693.95
    • getmore4less
    • By getmore4less 26th Dec 18, 9:50 AM
    • 37,596 Posts
    • 23,231 Thanks
    getmore4less
    A couple of points.

    Longer term gives flexibility look what the overpayments do

    £289,500 @ 2.63% £1164pm 30y
    £289,500 @ 2.63% £1500pm 21y
    £289,500 @ 2.63% £1750pm 17y 2m
    £289,500 @ 2.63% £2000pm 14y 7m
    £289,500 @ 2.63% £2250pm 12y 8m
    £289,500 @ 2.63% £2500pm 11y 2m

    Even modest variable amount overpayed will knock years off
    A good target is to look at a LTV in two years that gives a better rate
    ignoring HPI for now
    £320k to get to these LTV needs payment of
    86% £276,466 £1164
    85% £272,000 £1345
    80% £256,000 £1995
    75% £240,000 £2645

    85% LTV should be easy, 80%(£830pm overpayment) is a good target, 75% might be stretch to far without some help from price rises.

    You seem to have the spending well under control and over time the spend diary will hone the numbers on the SOA to reflect reality.

    What is missing is the longer term detail.

    With a big surplus it is easy to overlook what can be planned in advance(the budget) as when things come up not on the budget you just use some of the money that goes to savings/overpayments.

    A good example is the car, even if you drop to one you need to plan getting it replaced at some point, even a cheap £2k car in 5 years time is £35pm average over that time

    Owning a house comes with maintenance, any plans to decorate a room or two in the next 5 years do some work on the garden...

    White goods/household electric even with good runs getting 10y out of everything it is still around £100-£200py.

    Many are happy to go through everything and just allocate that to an emergency fund but the reality is you can predict a lot of things and plan a lot better or allocate funds to specific tasks

    once you start eating into your £10k cash it won't last long, you need some of your spare £1,700 allocated to cover the things that will use up money.

    I work on a plan that an emergency(unplanned expense) should only happen once, as you put it in the plan for the next time, you might not be able to predict 100% but if your washer breaks and you get a new one it will happen again so needs funds put aside.

    In reality the list of predicable events need a single pot of money and you hope they don't all break at the same time.

    With a 5-10 year budget with as much predicted and allocated as you can you will find that £1,700 shrinks quite a bit but your emergency funds needs should be a lot smaller.

    I would also put some holiday money into the plan, you don't have to use it but say £100pm gives you £2.4k to have the option for a weekend/longer away, go out to something special, or even staycation where you have some treats but use home as a base.
    • getmore4less
    • By getmore4less 26th Dec 18, 10:03 AM
    • 37,596 Posts
    • 23,231 Thanks
    getmore4less
    The SOA is a good monthly view but a good way is to normalise annually or allocat over longer periods.

    you have a clear goal in 2 year when the mortgage is up for a new deal
    (check your lenders retention options)

    looking at a 2 year plan starting with £10k in the bank and £1500pm surplus that's a total of £46k (leaves £200pm for SOA fine tuning).

    your priorities can tune and add/remove

    £20k overpayments
    £2.0k emergency
    £2.5k household electrics(less if you have everything already)
    £2.0k house maintenance
    £1.0k car replacement
    £2.5k holiday
    £16k long term savings(£6k on top of the £10k you have)

    With a 2 year plan you can adjust cashflow, eg. you could focus the overpayments early to get max benefit, using some of the £10k and then later restore the savings but stay on the 2 year plan.

    eg you could use £5k now and that gets replaced in 3 months(@£1700pm) if nothing comes up, not a massive interest saving but every little helps.
    Last edited by getmore4less; 26-12-2018 at 10:39 AM.
    • Nichelette
    • By Nichelette 26th Dec 18, 8:01 PM
    • 1,882 Posts
    • 3,118 Thanks
    Nichelette
    Thank you for the tips getmore, I'll definitely look at everything in greater detail once we have moved
    Finally bought a home
    Starting mortgage £289,500 31.01.19 - Current outstanding £274,272.15
    MFW #86 - Aiming for 15k in 2019
    Overpayments since 27.03.19: £9693.95
    • SDLT Geek
    • By SDLT Geek 26th Dec 18, 10:31 PM
    • 711 Posts
    • 486 Thanks
    SDLT Geek
    SDLT saving if you had no share
    How are you getting on finding out the nature of your involvement with your dadís property from 2010? If you can establish that you had no entitlement to a share in net proceeds of his property then you should save £5,000 on your purchase.
    • julicorn
    • By julicorn 27th Dec 18, 9:40 AM
    • 846 Posts
    • 3,457 Thanks
    julicorn
    Hi Nichelette, happy new diary! And happy new year as well, seeing as we're that close.

    I hope everything goes smoothly with your exchange and completion. As you read, our mortgage isn't quite as big as yours, but we've made a really good dent in it since we started overpaying in April. Sounds like you're already quite on it with budgeting / not living over your means, so I'm sure you'll be able to clear it much faster than the banks would like you too.

    Maybe join the MFW challenge as well, it's really good for keeping you accountable and reminding you of your goals.

    All the best!
    julicorn
    Original mortgage: December 2017, £203,495
    MFW start: April 2018, £201,800
    Current: £157,700
    • newgirly
    • By newgirly 27th Dec 18, 10:27 AM
    • 6,891 Posts
    • 47,621 Thanks
    newgirly
    Best of luck with the the new diary
    MFW 21

    £73,885.09 left -target £10k/ £7,110.95 in 2019
    • Nichelette
    • By Nichelette 30th Dec 18, 8:53 PM
    • 1,882 Posts
    • 3,118 Thanks
    Nichelette
    Thank you all. Sadly haven't had any luck re the stamp duty. To be honest I wasn't in a very good mental state at the time and didn't really do anything to protect myself as I was so desperate to stay in the house because of the anxiety the thought of private renting created.

    Anyway, I have updated the spreadsheet i was using to track my spending and am going to resume when I'm paid on the 15th, so that is a positive at least.
    Finally bought a home
    Starting mortgage £289,500 31.01.19 - Current outstanding £274,272.15
    MFW #86 - Aiming for 15k in 2019
    Overpayments since 27.03.19: £9693.95
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