MFW Part 2

Just to recap, horrified by the mortgage repayments for the new house, I planned to OP to get us to 10% LTV in two years when we would be able to remortgage. Without OPs, we would only be taking £163 off the capital a month, despite the £930 a month cost, ouch! We initially set up a £70 a month OP, but I realised this would still not be enough to be on target. I increased our OPs to £170 a month and threw anything else I could at it, this looked like it should just get us on target, I focused only on OPing on the mortgage and we cracked down on other spending to cover this!

On the 12th August 2015 I did a reality check to compare where we were vs where we would have been had we not been OP the mortgage:

Year one balance if no OPs made: £183,251 as of the 1st July 2015 balance: £180,404.24, a £2486.76 difference and not even at the year mark! Our original mortgage end date was 2049 and on the current trajectory would be 2033. The original expected interest costs: £207,475, based on new trajectory: £103,871

Obviously, the above figures are speculative based on fixed rate and estimated rates after that ends, but it does go to show how OPing makes a massive difference to the mortgage in the long term!

We hit our target of owning 10% of the mortgage on the 1st February 2016, I was so happy with this! Because of this, we were able to remortgage on August 1st 2016 with a rate of 2.98%, meaning that the payment was £685.87 a month, rather than £930! Massive win!

The next goal was to own 20% LTV of our home in two years, ready for the next remortgage! The difficulty at this time, was that we needed to focus on getting work done on the house, such as a large patio we had put in and buying a eco car on finance- got a very good loan rate! So our OPs steadily stopped over that time as we focused on other things. Last year, we went to see our mortgage adviser, she estimated our mortgage would be around the £170k mark, I was very pleased to show it was pretty much £160k! The house was valued at £210, this gave us exactly what we needed to lock into our current mortgage, we have locked in for five years as we knew I would be doing agency work which would possibly effect our desireability and eligibility.

Our mortgage information as it stands:

5 year mortgage with Tesco, at 2.11%, monthly payments: £666.72, current balance: £158,003, we reduced the term, our original mortgage was for 32 years, and this one is over 26years, hence the monthly amount remaining around the same as previous!

Focus on becoming mortgage free has been almost on hold, only one OP has been made with new mortgage- I was given the account number etc and sent over £60, then was told I had to send over minimum payments of £1k or set up a regular overpayment. Due to other things that are going on, I figured I will try to save up toward the £1k and not let this part of the journey slide, as actually, not having a mortgage would allow much more funds for saving and collecting for the future!

MFW Part 1

After all the hassle of selling our previous house and getting everything ready to buy our current home, I was horrified at how much the monthly cost of our mortgage was! Any money from selling our first home went on paying a 5%, YES, 5% deposit on the new house and all the associated costs of moving. We used a service whose name I cannot remember, where you say how much stuff you need moving and people with vans quote how much they will do it for. We paid £400 for our entire lives to be moved and did other bits ourselves! Bargain!

Initial Mortgage £185,250 over 35 years with 5% deposit of £9750, MF date 2049 (£195,000) this equates to £930 in repayments a month. The APR was 4.99%, ouch!

I found the Mortgage Free Wannabe (MFW) boards on Money Saving Expert (MSE), I loved reading others diaries and exploring different concepts, such as how even the smallest overpayment (OP) could make a huge difference in the longevity of the mortgage, and ergo how much interest we would pay over the length of the mortgage! I was acutely aware that buying this home on 5% deposit, with what seemed like a high interest rate and very high to us monthly payments was a massive risk, but it felt so worth it! This home is the dream home (in our price range!haha).

So, discovering MFW and starting a diary I started to wonder, what OPs we could make, on discussion we agreed we could afford to increase the monthly payment to £1000. An OP of £70 a month, I did this almost straight away and that £70 was taken on our first payment day. Honestly, it is addictive to look on OP calculators! I will add the link for MSE:

https://www.moneysavingexpert.com/mortgages/mortgage-overpayment-calculator

Disclaimer!! Now, I have already said I am a Nurse, I am in no way a financial expert, more an interested novice! There are many things you could be doing instead of OP on a mortgage, eg, ensure any debts are on 0% if possible, OP on more expensive debts, put OP funds into a higher interest saving account than your mortgage etc. This is just what I chose to do! We had £1200 on a credit card, which was 0% and saving rates were pretty poor at that time!

The initial goal was very quickly established, reach 10% LTV by the time the current fixed rate mortgage ended to aim for a better % when we re-mortgaged. I quickly, and slightly depresingly calculated that without any OPs we took off a measly £163 off the capital every month, meaning that the rest was interest- £767. In the next post, I will bore you all some more with OPs, goals and all that jazz!

Where it began…

It all began a long, long time ago…well, it wasn’t really that long ago! Hubby and I bought our first home in June 2011 with a 5% deposit- the other 5% was then ‘gifted’ to us by the person selling the house, meaning we had a 10% deposit. I didn’t really know much about mortgages, I knew the ‘gifting’ scheme was soon coming to an end as it wasn’t clear if it should be allowed or not, and I trusted our mortgage advisor had got us a great rate. We bought the property for £120k and were so excited! On the day we packed up from our prospective parents homes it felt surreal, at that time I had been working as a Nurse since June 2009, and hubby was working his butt off on minimum wage at an animal rescue. As we started unpacking, a guy walked past us with no top on, with ‘thug life’ tattooed on him, we just looked at each other and said ‘what have we done’?! Later, the attached neighbour invited us round to watch whatever fight was on and we declined, deciding to carry on unpacking- at 5am we were woken by the neighbour and his partner having a blazing row. My heart sank! We found out a few days later from the other neighbours, that attached neighbour was one of the reasons the previous owner was desperate to leave….

I loved our first home, we had a little balcony off the kitchen, a basement that lead into a small but functional garden, we bought a great kitchen and generally loved living there. Neighbour split with his girlfriend, he would be loud with music blaring, swearing at the TV and generally sharing his life with the street a couple of times a week, less so than when they were together. We also found out that asking him to stop with the noise would work, he would apologise and it would be tolerable, then the following week he would be off again. Actually a nice guy apart from the noise! I was working a lot of nights at that time and it did really affect my mood, I struggled to feel able to relax. He moved out and his dad moved in in 2012/13 and peace reigned. It was glorious!

In August 2011, we decided to go to our local rescue, just to have a look at dogs, it obviously would be too soon to adopt a dog having only lived together for two months…but that’s when we met Lady. A beautiful staffy mix, she was so skinny, she jumped up and lay across us at the rescue centre and we fell in love. We brought her home, but it turned out that Lady was reactive with other dogs- she could have dog friends, but any other dogs caused her to shout and bounce. So we started to think about finding somewhere less populated than our street to live, as children played out on the streets until it was dark, even at the height of summer. Plus the parking sucked.

In the time we lived in that house, we adopted another little staffy, Red, hubby started to work in the kennels for a sniffer dog company, we got engaged, married and went on our honeymoon, I changed jobs a couple of times (all within Nursing), hubby got promoted within the company and we decided to put the house on the market for the same value it was bought for in 2014. We SSTC, panicked as we couldnt find somewhere we loved. It had to be detached, or semi-detached but with the stairs against the adoing wall, not bedrooms (made that mistake before!). It had to have some kind of parking and a large garden for the dogs. We looked at so many houses, then this one came on the market. We were very excited from the pictures, it was even better in real life. Semi-detached, only spare room and kitchen is attached to next door, our right side is surrounded by fields, including our own mini field (we have .97 of an acre) and the house had recently been extended and decorated. Perfect! We proceded and once we had payed and instructed solicitors, our buyers found out that they didn’t actually have a mortgage and it fell through. Cue panic! We needed £118k from our house to cover all costs and 5% deposit on this house so we reduced the price. Had a further offer which fell through, then my dad and step mum saved us. They bought our old house as a buy to let and we bought this one! Took six months all in until we got the key! Well done if you have followed me so far! 🙂

A brief introduction…

Hello, I am Jodie, a 31 year old Mental Health Nurse who lives with her husband, two rescued fur children and four rescued hens. I have been working on agency since October 2018 and this means my income can be variable, so I have been investigating other ideas to make and save money which led to creating this blog! I have been interested in money matters for as long as I can remember, and have avidly visited sites such as Money Saving Expert and Mr Money Mustache for inspiration. My reason for creating this blog, is to explore avenues of income and ways to save, including using a blog, signing up to various survey sites, looking at frugality and where it fits, whether you can get enough freebies from entering competitions, can I DIY something to save money and any other ideas that come up!

I am aiming for the good life, by this I mean that I would like to be able to work less hours, and have more time to explore other things that interest me and give me enjoyment, without worries around finances hanging over me. I would like to be debt free, including the mortgage, grow some of my own fruit and vegetables, invest in my future and live happily ever after! We are living in our dream home within our affordability criteria and are very happy here, but there is always work to be done and time can sometimes seem to get away from me with little achieved! So far this month, I have signed up to the Frugalwoods Ultimate Frugal Month, have continued with Onepoll, signed up to Yougov and Pinecone and started a blog, this seems like a good start to the journey, I hope you will join me!