My Mortgage Free Diary

A question about : My Mortgage Free Diary

Hi all,

After lurking here for 3 months, decided to finally sign up and start my diary. My wife and I bought a 3 bed maisonette (1st and 2nd Floor) in August 2008 for 168,000, with a 5% deposit, with Directline 30yr mortgage, 2yrs fixed at 6.89% (ouch!), and since August 2010 we are on the SVR, currently 1.5% above base (so 2.0%). This change in interest rate means our payments dropped from 1070pm to 623pm, however this coincided with the end of my wife's SMP, so we maintained our payments until now, as she has resumed work (3 days per week). This coupled with a new job for me, means as of January's payment, we will be overpaying by Ј400. The balance as of 30th November 2010 was Ј157,996.50, so a long way to go. At the moment am sure is a lot of redundancy in our finances, so am hoping to increase the overpayments as the year goes on, however also depends on the interest rate. Will get to work on my signature now!

Best answers:

• Welcome to the boards, and good luck with your journey
• Checking my signature works...
• Welcome aboard!
• Welcome and good luck with your MFW journey.
  All the best,
  Spigs
• Good morning all,
  Thought I would keep a record of what I am doing to add to my overpayment pot. So today I have listed 5 items on ebay, just clothing that is sitting in wardrobe taking up space and is never worn. So hopefully this time next week will be posting about how much it has sold for though in all honesty only expecting max Ј25 in total, but it all counts!
• Likewise me too - just checking in to see how you're getting on!
• First overpayment went out today . Am holding off on speaking to Direct Line until tomorrow, make sure it has time to register.
  Also updated my signature with "holiday fund" added. We (OH and I), decided that we want to do a uk based holiday for 3 of us in the summer (we have a wedding on the south coast to go to so going to tie in to save 2 trips), and we budget Ј1000 for this - i know its a lot, but is our utter max, we did same last year and only spent Ј700, and is a budget designed to cover EVERYTHING, and not just travel, accomodation etc but all outgoings. Then we would like to go to the Caribbean in December, and we would go all inc, so budgeting Ј3000 for now until booked. So any extras (ebay/selling phones etc) will go into this first, as well as Ј300 pcm. Once this has reached Ј4000, then we will start another savings project, or add the Ј300 to overpayments (obv depends on interest rates etc).
  We had some money leftover from a project last year to start it with, and my OH just paid Ј24 in from our loose change pot, so currently stands at Ј493, which seems like a good start, only 2 months to go and will have the first holiday saved for.
• Another new diary. Welcome and best of luck with your challenges.
• First overpayment is in, along with regular payment has pushed mortgage down. Seems like a very long way away to clearing it, but from reading (all) the other diaries, know ultimately that these regular payments will have big difference over time. Constantly trying to work out how to save more! Started moving Ј4 a day to an online saver for every day I bring lunch in, so will add Ј20 a week to my pot (as I hardly ever buy food).
• Wellcome to MFW
• Welcome, you have some clear goals there and i wish you lots of luck.
• Got email to say my sent in mobile phone is ok, so Ј16 has been paid to me (not in account yet but fingers crossed for tomorrow). Also waiting on Ј64 cashback, but could be upto 28 days apparently. Also couldn't resist moving Ј7 over to the holiday fund so figure was nice and round lol
• Got the cashback and mobile phone money so thats Ј80, though staying in current account for now, as bit short this month due to needing some new work clothes. 5 ebay items sold, bit disappointing to only get Ј18.54 total, however got one more auction ending soon which is upto Ј13.50.
  Booked the December holiday (7 days in Barbados), however Virgin cocked it up, so seems like the Ј300 deposit has been taken twice (sigh). So am writing this whilst on hold now with them!
• Good afternoon all, some updates:
  Only one deposit for holiday came out of our account this morning, however the account is still showing -Ј300 coming up, but hoping this is a blip, otherwise Virgin are going to get it in the neck! Have moved Ј300 out of holiday savings to cover the actual payment.
  My 6 auctions are finished, total is Ј35.54. Had Ј18.64 of that already which is good. Hoping to spend some time Sunday sorting spare room and seeing if any more stuff that we can sell.
  Got my combined bill from npower today, showed us in Ј339.42 of credit, this is almost the same as it was 6 months ago, when we reduced our direct debits down to quickly cancel it out. As no change, have requested a refund of Ј239.42 (prefer to leave a small amount of credit in case our consumption increases), and they have corrected our direct debits to hopefully pay a more realistic amount now. Am sure it will mess up though... Anyway this will go into the holiday fund.
  Will update signature once these refunds/auction money's come in.
• So Virgin Holidays didn't take a second payment, which is good.
  Been thinking about possible remortgage plans, as at some point I assume the base rate will start to rise again. Just to recap, we are currently on SVR of 2% (1.5% above base), with min payment of Ј623. Given our current overpayment of Ј400, then we "safe" if our interest rate rises upto a max of 6.50%, ie the base rate would have to rise 4.5 points to 5% before this becomes an issue. So really my intention is to persist with our overpayments as they are, and then once rates start to rise, start looking into getting a fixed rate, probably for 3 years but depends on possible deals. However what I am thinking is this. We paid Ј168,000 in total for our place, after the bank who owned (was repossessed) dropped the asking price from Ј200,000 to Ј170,000. The place was in a bit of a state, and we have improved the decor everywhere, and also added in an ensuite, so now we have 3 bedrooms/2 bathrooms, instead of 3 bedrooms/1 bathroom. Using Zoopla (I know its not an exact science..) shows value at Ј180,000. This therefore takes us over 10% LTV, meaning we could remortgage now (assume mortgage valuer takes similar view on value). What I am thinking is that if I wait for the base rate to move up, am i losing out by the house value falling over a similar time frame, leaving me stuck with a higher interest rate, and not having sufficient LTV to remortgage? This thought really only just occured to me in the last 30 mins lol, but wondered what people's views are?
• Hello
  I've been researching remortgage options too - makes my head spin! My plan is that the minute I hear the base rate goes up is to run into my bank and fix a mortgage deal and pray they're not as quick as I am in upping all the mortgage rates!
  But I really wish I had an accurate crystal ball for rates and house values.....
• Yes sadly have lost my crystal ball...
  There really is a lot to consider. I would really like an offset, think it would encourage my OH much more knowing that we can take it back at any point (obviously we wouldnt want to). She is definitely in the "build savings" camp as opposed to the "pay off mortgage" camp that I am in! However we also both like the security that comes with a fixed rate mortgage, and from quick research I have done, is not possible to get a fixed rate offset? Would also really want to fix for decent period (min 3 years).
• BOE keeps interest rate at 0.5%, suits me well for now - no remortgaging yet I think.
• My latest overpayment went out today, will update my status today/tomorrow when I get a chance to speak to the bank. Thought I would share two money saving things my OH and I have done. Am afraid she wins though..
  1 - I used my Oyster card for the first time 2 weeks ago, and royally messed up, forgetting to touch in twice, ended up being overcharged Ј2.80. So I emailed thinking I would get nothing, then was told a refund could be credited to my Oyster card if I used it within a week, which wasn't going to happen, so asked for alternative, and they sent me a cheque! So Ј2.80 cashed yesterday
  2 - My OH recommenced the nursery we use to two of her friends, who signed up. She mentioned it to the Manager of the nursery today, who has said we can have two free sessions for our DS! Saving of Ј82.
  So you can see, she wins hands down, but it all counts!