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  • FIRST POST
    • Maxthebrave
    • By Maxthebrave 18th Feb 18, 10:04 PM
    • 30Posts
    • 76Thanks
    Maxthebrave
    Got the dream house - now to pay it off
    • #1
    • 18th Feb 18, 10:04 PM
    Got the dream house - now to pay it off 18th Feb 18 at 10:04 PM
    Hello MFWs,

    Ive lurked this forum for years and had a diary a long time ago under another name. So much has changed this then so a new username and diary inspired by my daughters favourite book.

    Theres me, darling husband, 2 crazy daughters not yet at school and a long suffering, aged cat. There might be some chickens in the future too.

    Weve had a horrible couple of years dealing with the deaths of some close family members, bad depression on both our parts and the general chaos of trying to raise young children. The silver lining was a few inheritances that we have put to good use buying our dream home.

    We are in the enviable position of having a small mortgage and the same amount that we owe sat in the bank. However, due to a few complications of buying and selling, the bank has made us sign to say we will not repay more than their allowed, penalty free 10% within 3 years as it would class as a bridging loan

    So we've decided to borrow an even larger sum and buy a buy to let.. The rent on the property we have found will match the mortgage repayments and we estimate we will need to contribute around 300 a month to cover costs. If it goes well then we will keep it indefinitely,if it is too much hassle we will sell it after 5 years and hope we don't lose any money on it. We had an offer accepted last week and we are so excited about this new challenge in our lives.

    While it sounds like we have it made, our incomings are currently very low and with childcare costs we still manage to go over budget every month. Our dream home needs a lot of renovation still and we have no extra money to buy curtains let alone refit all 3 bathrooms. We bought a big house and big houses cost money to run it seems.

    Our main aims are:
    Savings for house renovation
    Starting our savings. We have 30k emergency fund so now we can start filling some bank accounts
    Paying off as much of our 10% yearly mortgage allowance as we can.

    All with no spare cash. Wish me luck
Page 2
    • gallygirl
    • By gallygirl 8th Mar 18, 10:08 AM
    • 16,606 Posts
    • 109,664 Thanks
    gallygirl
    Will need to add these to the money map. Does anyone else have a hand drawn diagram in the front of their finance file to remind them of the journey their money makes each month? Between us we have 5 current accounts and 5 savings accounts doing their bit. DH shows no interest in our finances so if anything ever happens to me i'm hoping this will help him out
    Originally posted by Maxthebrave
    Including peer to peer lending etc. we have:
    1 joint bank account in Spain
    5 accounts in my name which we class as joint
    2 accounts in Mr GG's name which we class as joint
    2 joint accounts
    8 individual accounts - mine
    7 individual accounts - Mr GG
    Oh dear. That's rather a lot, especially as it doesn't include S&S ISA's etc. Was reading on another thread about a registrar saying someone had to order 40 copies of a death certificate for probate , we're not quite at that stage yet . We have a spreadsheet which is referred to in our will and is kept up to date.

    Found a 15 direct debit to Carphone Warehouse on DH personal account. Seems hes been paying them insurance for years and hadn't realised. He really is hopeless with money.
    Originally posted by Maxthebrave
    Oh dear Have you been through everything with a fine tooth comb? Does he have internet banking - worth checking all the standing orders and direct debits which are set up as he could have annual payments going out that could slip through the net. Don't know how you check any set up on credit cards though.

    DH was told he was getting a promotion yesterday. Guessing it should be around 300 more in the bank each month and hes still being head hunted by 2 other firms so hoping he might be able to negotiate more.
    Originally posted by Maxthebrave


    I bought my first btl when I was a single parent on a very limited income but had enough for a decent deposit from my divorce settlement. I was terrfied really, but ultimately it led to others and I retired to Spain at 53, so it can be done . There is someone else that I think still has a diary on here who is currently buying a house mortgage free from what she has achieved with btl's and it's enabled her to give up her stressful job and juggle a few part-time ones instead . I know the tax position is not as favourable and the government seem to always be trying to find new ways to penalise landlords but I think it still can be profitable - in the long run.

    Good luck
    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"
    • Maxthebrave
    • By Maxthebrave 10th Mar 18, 7:19 AM
    • 30 Posts
    • 76 Thanks
    Maxthebrave
    Aw Gallygirl thank you so much for your kind words. I have followed your diary on and off over the years and its been inspirational. Its nice to know it can be done although, as you say, the government seems keen to give landlords a hard time right now. Fingers crossed we can make it work.

    The only account DH has that I can't see is his current account. He is now on strict orders not to use it unless its an emergency or nice things he doesn't want me to see like presents.

    I need to open another account for the BTL once it happens. Was browsing the MSE recommendations but will wait until last minute incase something better comes out.

    I'm off to work today and DH is taking the girls to a birthday party. Hoping he can manage a slow cooker lentil ragu for dinner but he might protest as, by following Jacks recipes all week, it seems we've eaten nothing but beans and pulses I will switch to Nigella next week to balance things out.
    • SuperSecretSquirrel
    • By SuperSecretSquirrel 10th Mar 18, 8:31 AM
    • 696 Posts
    • 3,090 Thanks
    SuperSecretSquirrel
    Its looking like our repayments will be almost exactly the same as the BTL should achieve in rent which means we will likely be contributing around 300 a month in management fees, tax and maintenance.
    Originally posted by Maxthebrave
    This should set alarm bells ringing. Your plan from day one appears to be to subsidize rent for your tenants, in the hope of capital appreciation paying off in the long term. Professional landlords would aim for a positive yield from day one.

    If you want to bet on house prices increasing, have you considered the possibility of investing in REITs? Even the riskier option of buying a few shares in the big housebuilders might be an option, it would be a wider spread of risk than a single property.

    Of course it's not as easy to use leverage for the above (no mortgage, though personal loan or credit cards may be possible), but that might not necessarily be a bad thing.

    Mtg [2013 64k|2014 51k|2015 38k|2016 26k|2017 14k] Zero!
    MN [2013-25k|2014-2k|2015+16k|2016+34k|2017+52k] +56,615.31(MFiT4:+60k)
    NW [2013 126k|2014 156k|2015 190k|2016 228k|2017 269k] 278,659.39 (2020:300k)
    FI [2013 -1.2%|2014 2.8%|2015 6.9%|2016 13%|2017 18%] 30.9% (exc SP)
    • Maxthebrave
    • By Maxthebrave 10th Mar 18, 8:06 PM
    • 30 Posts
    • 76 Thanks
    Maxthebrave
    This should set alarm bells ringing. Your plan from day one appears to be to subsidize rent for your tenants, in the hope of capital appreciation paying off in the long term. Professional landlords would aim for a positive yield from day one.

    .
    Originally posted by SuperSecretSquirrel
    Not really. Our thinking is that as long as the property doesn't decrease in value over 5 years someone else will be paying our mortgage. The 300 will be mostly paying into a pot for maintenance and once we hit a certain figure will be used to over pay the mortgage. The only issue is that once I start full time work again the full income will be taxed so we will lose 20% of it.
    I know its not the best strategy for making millions but with 2 young children we have been very cautious. I really do welcome any comments on it as Im still not sure its the best thing to do.

    Jacks lentil ragu was a huge success and super cheap too. Costed out at around 40p each I think with some spaghetti and grated cheese. Both DH and I feeling a tad bloated from all the pulses this week.

    Had a lovely day at work achieving lots and left DH in charge of answering the door to a lady collecting a Facebay item so thats another 20 in the pot.
    • gallygirl
    • By gallygirl 10th Mar 18, 8:57 PM
    • 16,606 Posts
    • 109,664 Thanks
    gallygirl
    Not really. Our thinking is that as long as the property doesn't decrease in value over 5 years someone else will be paying our mortgage. The 300 will be mostly paying into a pot for maintenance and once we hit a certain figure will be used to over pay the mortgage. The only issue is that once I start full time work again the full income will be taxed so we will lose 20% of it.
    Originally posted by Maxthebrave
    Pretty much how I looked on things - my initial figures (19 years ago ) were on me more or less breaking even over the 20 year mortgage period then having the income as a pension. I built in very minimal capital growth, but obviously you get capital growth on the whole value, not just the amount you've initially invested so even a low % can give a pretty good ROI.
    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"
    • minimaddave
    • By minimaddave 11th Mar 18, 7:09 AM
    • 14 Posts
    • 8 Thanks
    minimaddave
    Found a 15 direct debit to Carphone Warehouse on DH personal account.
    Originally posted by Maxthebrave

    Hi Maxthebrave,

    Good luck with the BTL plan!

    Might be worth trying to claim back for the unused insurance; have a look on the Cancellation Hero Successess forum!
    • Maxthebrave
    • By Maxthebrave 11th Mar 18, 3:33 PM
    • 30 Posts
    • 76 Thanks
    Maxthebrave
    Hi Maxthebrave,

    Good luck with the BTL plan!

    Might be worth trying to claim back for the unused insurance; have a look on the Cancellation Hero Successess forum!
    Originally posted by minimaddave
    Thank you. Will do. The big problem is that Carphone Warehouse refuse to speak to him on the phone and say we have to go to a branch which is pretty far away. Planning on trying to sort it soon.

    Had a lovely chilled mothers day. We all went to Aldi meaning I could shop while DH shepherded the kids - DD2 is at that cheeky toddler stage of running off. DH picked up 5 bags of compost for the garden and some more little bits for planting seeds with DD1. It was 37 in all but I will need to head to a different shop at some point.

    Came home to potter in the garden before the rain hit. We planted a cherry tree and some rhubarb and all helped to sweep up some of the mountains of leaves that are everywhere. We should have done it in Autumn but still learning how to manage to our country pad. Its nice making plans with what to do with the space.

    I have requested a takeaway tonight and I think DH is very excited about that bless him. Now meal planning with Nigella for next week.
    • Maxthebrave
    • By Maxthebrave 13th Mar 18, 8:56 PM
    • 30 Posts
    • 76 Thanks
    Maxthebrave
    Having a mild panic that March is turning out to be very expensive when it was supposed to be cheap.

    Its DD2s birthday soon and we have no clue what to get her. Trying not to spend too much as we want to get a trampoline for the garden later on. Winter birthdays are such a pain as we've found if we buy the big outdoor stuff for them it cant be played with and becomes a rubbish present. Settled on some Peppa Pig stuff and a doll she fell in love with in the shop today. We put 100 aside each month for birthdays and Christmas so at least its already accounted for.

    Spent 25 today in Waitrose. I had to go to buy DD2 some of her special bread and her insanely expensive nappies. Going to try very hard to not spend for the rest of the week now.
    • Maxthebrave
    • By Maxthebrave 15th Mar 18, 10:56 AM
    • 30 Posts
    • 76 Thanks
    Maxthebrave
    Managed to find DD2s nappies a lot cheaper online. She has extremely sensitive skin and we have tried every nappy on the market plus cloth ones and the only ones that don't seem to bring her up in eczema are Naty at 7 for a pack of 18 We also have to change her at least every 2 hours in the day so its been a big impact on the bank balance.

    Another big expense has been milk. None of us can really tolerate dairy so we always have an array of plant milk around the house but everyones favourite is Koko which is 1.50 a carton and we use at least 3 a week. Discovered they were 3 for 3 in Tesco yesterday and bought the last 12. Hoping to pop in before work tomorrow and get a load more. The expiry date is early next year so if I can find a way to get 123 that's 61.50 saved
    • Maxthebrave
    • By Maxthebrave 22nd Mar 18, 8:27 AM
    • 30 Posts
    • 76 Thanks
    Maxthebrave
    March is turning out to be painfully expensive. Took aged cat to the vet yesterday and she ended up having emergency dental surgery which is not covered by her insurance Now 500 poorer but with a very bouncy, happy cat. We have been wondering whether we should go to the expense of fitting a cat flap (it needs to go through glass) but as vet has now confirmed theres nothing else wrong with her I think we have to do it.

    Iv'e become obsessed with buying in bulk to last us the year. Found a really good deal on DD2s nappies so we now have enough to last until Christmas Still on the hunt for Koko milk - grabbed another 24 yesterday. Have also stocked up on Comfort Pure and in search of an offer on Fairy powder. These seem to be the only brands my eczema riddled family can cope with so I know they will get used.

    and now I have to call a roofer to deal with our ever leaky roof At least that can come out of house maintence pot.

    April is going to have to be a strictly no spend month.
    • Maxthebrave
    • By Maxthebrave 24th Mar 18, 7:47 AM
    • 30 Posts
    • 76 Thanks
    Maxthebrave
    DH is in my bad books. He has spent years assuring me that the overdraft on his personal account is free while I ask him to check and double check. He never has any clue whats happening with his account.
    I opened a letter to find out that Natwest are refunding him nearly 2k because he was missold a Platinum account. How do you not notice 19 a month leaving your account? In addition to the 15 phone insurance we discovered the other day. I could scream

    On the plus side he did think to apply for the claim and also his payrise is confirmed and its a little more than we hoped for. We should actually have money at the end of the month now and can start putting it to good use
    • Maxthebrave
    • By Maxthebrave 24th Mar 18, 8:40 PM
    • 30 Posts
    • 76 Thanks
    Maxthebrave
    Another 12 milks snaffled while out and about working.

    DH took the girls to Tesco and didn't think to get any

    I can forgive the bank account woes but this may be divorce
    • blocpartyfan
    • By blocpartyfan 25th Mar 18, 9:54 AM
    • 49 Posts
    • 234 Thanks
    blocpartyfan
    Our journey's have some similarities - positive vibes to you for starting this!

    I really think it's a nightmarish task trying to save money with little ones that are in nursery/with extra childcare costs. In London, I know a fair few people spending 1,500 - 2,000 per child. I just cannot comprehend how they get through, let alone save!
    Mortgage when started: 200,999
    Current mortgage (2nd Jan 2018): 135,000
    Mortgage free day planned for: 25th June 2025 (day before my 40th birthday!)
    • Maxthebrave
    • By Maxthebrave 27th Mar 18, 8:47 PM
    • 30 Posts
    • 76 Thanks
    Maxthebrave
    Thanks for stopping by blocpartyfan I had a look at your diary and definitely some similarity. Popping back for a proper read in a mo.

    Childcare is just crazy money yet I often find it hard to see how some providers make a profit. My kids are in an incredible setting and its worth every penny but its taken a whole inheritance to keep them there with me not returning to work properly. Another year until DD2 qualifies for the 30 hours too.
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