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  • FIRST POST
    • j s m
    • By j s m 5th Aug 18, 11:40 PM
    • 5Posts
    • 7Thanks
    j s m
    The start of my journey to staircasing and becoming mortgage free
    • #1
    • 5th Aug 18, 11:40 PM
    The start of my journey to staircasing and becoming mortgage free 5th Aug 18 at 11:40 PM
    Hi all,

    I'm a long time lurker on the forums and decided that I'd like to join all of the journeys posted here into becoming mortgage free! It's my first post - please let me know if I've done anything wrong!

    However, all is not as it seems, as my situation is a bit different from the posts I've seen in here... here's the bits you need to know:
    • I have a London mortgage, with 34 years remaining
    • My property is shared ownership
    • I'd like to staircase up, and then become mortgage free (told you it was a bit different!)

    My mortgage:
    3.99% FTB SO 2-year fixed mortgage from a Building Society who are actually great with customer service. However, they don't provide an online account system for mortgage-holders, and only send statements once a year, which makes it harder to keep track of... all I currently know is that the mortgage amount was just shy of £85k when I took it out

    My property:
    Backstory: I lived with my family up until I had just turned 22 and was lucky to be accepted for a mortgage and for the property. It's a flat in North London that is shared ownership - I currently have a mortgage on the first rung of the ladder - 25%. It took 7 months to go from deposit to actually getting the keys. A year later, I'm still fighting for the builders to finish off works and rectify snags here, but to no avail thus far

    Staircasing situation:
    Whilst this isn't my forever home, the HA who own the other 75% are useless at customer service, and charge a £45 management fee/year, but do nothing for the residents whatsoever. I'd like to staircase to (pettily) spite them, but also, to garner a bigger deposit when me and my SO decide to move... who knows, it might even become our "city" flat and we'll have a country manor elsewhere

    Let the fun begin!
    Last edited by j s m; 05-08-2018 at 11:45 PM.
Page 1
    • j s m
    • By j s m 5th Aug 18, 11:49 PM
    • 5 Posts
    • 7 Thanks
    j s m
    • #2
    • 5th Aug 18, 11:49 PM
    • #2
    • 5th Aug 18, 11:49 PM
    My statement of affairs:

    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.................... 1

    Monthly Income Details

    Monthly income after tax................ 2575.7
    Partners monthly income after tax....... 0
    Benefits................................ 0
    Other income............................ 0
    Total monthly income.................... 2575.7


    Monthly Expense Details

    Mortgage................................ 372.5
    Secured/HP loan repayments.............. 0
    Rent.................................... 683.2
    Management charge (leasehold property).. 103.51
    Council tax............................. 124
    Electricity............................. 130
    Gas..................................... 0
    Oil..................................... 0
    Water rates............................. 32
    Telephone (land line)................... 0
    Mobile phone............................ 19.63
    TV Licence.............................. 12.85
    Satellite/Cable TV...................... 0
    Internet Services....................... 27
    Groceries etc. ......................... 200
    Clothing................................ 10
    Petrol/diesel........................... 50
    Road tax................................ 2.5
    Car Insurance........................... 61.66
    Car maintenance (including MOT)......... 30
    Car parking............................. 0
    Other travel............................ 183
    Childcare/nursery....................... 0
    Other child related expenses............ 0
    Medical (prescriptions, dentist etc).... 0
    Pet insurance/vet bills................. 0
    Buildings insurance..................... 0
    Contents insurance...................... 0
    Life assurance ......................... 0
    Other insurance......................... 0
    Presents (birthday, christmas etc)...... 25
    Haircuts................................ 13
    Entertainment........................... 0
    Holiday................................. 0
    Emergency fund.......................... 100
    Total monthly expenses.................. 2179.85



    Assets

    Cash.................................... 0
    House value (Gross)..................... 400000
    Shares and bonds........................ 0
    Car(s).................................. 3500
    Other assets............................ 0
    Total Assets............................ 403500



    Secured & HP Debts

    Description....................Debt......Monthly.. .APR
    Mortgage...................... 84459....(372.5)....3.99
    Total secured & HP debts...... 84459.....-.........-


    Unsecured Debts
    Description....................Debt......Monthly.. .APR
    Loan...........................3749.89...310.1.... .7.5
    Total unsecured debts..........3749.89...310.1.....-



    Monthly Budget Summary

    Total monthly income.................... 2,575.7
    Expenses (including HP & secured debts). 2,179.85
    Available for debt repayments........... 395.85
    Monthly UNsecured debt repayments....... 310.1
    Amount left after debt repayments....... 85.75


    Personal Balance Sheet Summary
    Total assets (things you own)........... 403,500
    Total HP & Secured debt................. -84,459
    Total Unsecured debt.................... -3,749.89
    Net Assets.............................. 315,291.11



    As you can see above, I'm cutting it very fine to being in a negative balance each month... here's hoping I can save some £££ somewhere and start overpaying!
    • daisy 1571
    • By daisy 1571 6th Aug 18, 10:30 PM
    • 328 Posts
    • 3,963 Thanks
    daisy 1571
    • #3
    • 6th Aug 18, 10:30 PM
    • #3
    • 6th Aug 18, 10:30 PM
    Hellos0

    I'm sure others will have better advice but just from a quick look, electric seems quite high? I'm not sure I would put down the full value of the flat as asset since you only are buying a quarter (sorry) and the biggie - I don't see any savings there at all? Maybe you just didn't list them but if you are serious about wanting to pay down your mortgage and buy more of the shares (which I understand can be quite expensive) then I would advise:

    1) get some savings. You need to be able to access a bit of money in an emergency (a real relative taken ill in a foreign country type emergency not a forseen expense like car repairs or I want a takeaway and to go to the cinema type emergency lol)

    2) get that loan paid off 1) it's smaller than the mortgage so doable quicker 2) it's a higher rate of interest so costing you more and 3) once it's paid off it frees up money each month that can immediately be turned into more savings for either paying off more mortgage or going towards cost of buying another share or going towards deposit of buying a 100%flat somewhere.

    It's great you are thinking about this.

    If you are seriously serious, then 2 things are looked on as sage advice generally:
    1) cut costs but you can only do this up to a certain amount, nobody can live on £0 each month so
    2) up that income. Second job (and there 2 of you so second job for you both could well be doable), turn hobby into something that pays, sell some Stuff etc etc. It's not forever, just till you get into a better position - as you say you are close to a negative. A bad month could be serious, 2 bad months could be disaster and sometimes things come in threes...

    Loads of advice on here so use it, check out the kon mari thread (great for keeping clutter at bay (stops you feeling like buying things plus maybe gets you selling things so double win)), old style threads great for keeping food costs down, Xmas present advice, other people's journeys and support for the middle of the month when it seems like you will never get there etc etc etc.

    Main thing is you have started - you are already ahead of a large percentage of people who spend up to and beyond their pay with no thought about an overall plan.

    Good luck, I will follow with interest, remember - you can do this


    daisy xx
    Last edited by daisy 1571; 06-08-2018 at 10:33 PM.
    "Never save something for a special occasion. Every day in your life is a special occasion" Take hold of every moment by anon

    The difference between what you were yesterday and what you will be tomorrow is what you do today
    • beanielou
    • By beanielou 7th Aug 18, 10:17 PM
    • 58,871 Posts
    • 244,311 Thanks
    beanielou
    • #4
    • 7th Aug 18, 10:17 PM
    • #4
    • 7th Aug 18, 10:17 PM
    Do you really only spend 50 quid a month on petrol?
    Yet 60 odd quid on car insurance?
    Lou~ Debt free Wanabe No 55 DF 03/03/14.
    **Credit card debt free 30/06/10~** **Weight loss 2 stone 12 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.***
    • j s m
    • By j s m 8th Aug 18, 11:11 PM
    • 5 Posts
    • 7 Thanks
    j s m
    • #5
    • 8th Aug 18, 11:11 PM
    • #5
    • 8th Aug 18, 11:11 PM
    Hi Daisy! Thanks for popping by!

    My electric is quite high because itís the first year the properties have been built, £30 is actually Energy and £100 is the Hot Water and heating usage + a ridiculously high heating charge based on an estimate... weíve heard from the provider - in writing - that weíre due to get at least 1/3 of it back in September and then itíll settle down!

    Regarding the total value of the house - in hindsight youíre right - I did think I had filled it out wrong!

    Iíve got some savings but I completely forget about them as it helps me not to spend it - itís a sizeable emergency fund ~ that would keep me ticking for 3 months I hope!

    The loan - itís a tetchy point but thatís what Iím working toward! I figured if I free it up, I can lump the £310 into a casual savings account to build up and pay off some of mortgage whilst having some more savings!

    Your advice is sage! Iím currently on the market for a new job which I should hopefully hear about in a couple of weeks - September latest. Itís been a mismatch of me on holiday and them on holiday and just not being able to find a time that suits us all - but weíve got a date in the diary!

    Probably also worth noting that my SO does pay 1/2 the bills and rent - I couldnít figure where to put that in my SOA - should I put it in his Ďsalaryí? Our situation is a bit complex - heís still got the ability to gain all the perks being a FTB as heís not on my mortgage - so I wouldnít expect him to pay mine!

    Iíll follow on all the threads you mentioned too ó thanks for the warm wishes!
    Last edited by j s m; 08-08-2018 at 11:20 PM.
    • j s m
    • By j s m 8th Aug 18, 11:19 PM
    • 5 Posts
    • 7 Thanks
    j s m
    • #6
    • 8th Aug 18, 11:19 PM
    • #6
    • 8th Aug 18, 11:19 PM
    beanielou - we drive about 400 miles/month - I thought £50 was good?!
    • beanielou
    • By beanielou 9th Aug 18, 3:07 PM
    • 58,871 Posts
    • 244,311 Thanks
    beanielou
    • #7
    • 9th Aug 18, 3:07 PM
    • #7
    • 9th Aug 18, 3:07 PM
    beanielou - we drive about 400 miles/month - I thought £50 was good?!
    Originally posted by j s m
    Thats ok, but it seems very little when you are paying more for insurance IYSWIM.
    Lou~ Debt free Wanabe No 55 DF 03/03/14.
    **Credit card debt free 30/06/10~** **Weight loss 2 stone 12 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.***
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