Mortgage Overpayments, Take 1001

So, the title is an exageration! I have played with overpayments many times since getting a mortgage for the first time in June 2011, but I wouldn’t hit the 100’s let alone 1000’s really…

After my last post, I was inspired to talk with the husband about re-starting the overpayments on the mortgage. We stopped as we bought a car on finance- good apr though- and we have been doing things to the house- had a patio outside the back and have saved for the driveway to be done at the front- and now, even though we have some holibobs coming up, I have noticed we should be able to spend an extra £250.28 a month on the mortgage without it having a huge impact on other things.

Bearing this in mind, I have today, increased our payments by £250.28! Taking us to £917 a month in payments, I can stop these at any time should I need to and even if I only manage to overpay a month it will still save a good amount ultimately!

So, with the overpayment we should be able to pay the mortgage of in 17 years- this still feels too long right now- I will be 48 and hubby will be 49. This is great progress really, but the problem with overpaying and looking into mortgages, is that it opens your eyes to the real cost of a mortgage,the interest is truely shocking!

I am looking forward to seeing what my wage will be in May, I have started a new job and this is 36hours a week so less unstable than working agency, plus I get paid my holidays! Hooray!

Looking forward to seeing the mortgage on May 1st….

Savings

When I look into ways to be better with money, making money work is something that comes up often, as well as ways to make money last longer.

So, savings are twofold. You can save money by not spending and you can save money by buying items for less. I am still a materialistic person. I recently kon-mari-ed my clothes, I HAD LOTS. I went through them and for each one I checked for that spark of joy, those that didn’t, I thanked them and they have been sent to Barnados Charity shop, to be joyful for someone else. For those that did, I carefully folded and placed them into drawers and the cupboard. This felt so good, but I also acknowledged that there was a lot of wasted money right there. I made a pact with myself to only buy items that are needed and I truely love from now on…I am already wavering on this. I need work trousers as I am down to one functioning pair, I need a new pair of leggings- I am down to one pair, we are off to Florida later in the year and I dont have a lot of hot weather clothes. I live in the UK its not that hot! So, some clothes are actual needs, some are wants and desires.

I went on to Evans last night. I am a plus size girl and its hard to get bargains. We live relatively rural and our charity shops dont seem to have any clothes for big lasses. I left the items in my basket, and this morning the three items in my basket are in the 24% off sale. I still like all three items as much as yesterday and my leggings are down from a tenner, so even better! Now, the other two items are lovely, beautiful, hot weather clothes- they may not suit me and I can return them if they don’t. Evans is pretty happy with that, but the fact I have waited instead of purchasing meant I got them with 24% discount, ergo, I have made a saving. I could argue with myself that not buying the items would be a better saving though!

I also found two pairs of trousers for work on Amazon for a great price, again, if they aren’t right, Amazon are pretty good about returns. One really bad thing, is that Amazon seem to be offering lots of plus size clothes for a great price. Noooooooo! My plan to manage this impulse to buy, is to leave items in my basket, see if I still like them, and then check if funds can cover it this month. If not, I will save them for later, when I have the funds!

As to the other part of saving (the not spending part) we currently use Santander and get 1.5% on the money in our current account. This is better than a kick in the teeth, but not great. I also have an M & S account, and have opened a 5% savings account. To get this rate, we have to leave the money for a year and can only pay-in up to £250 a month. This means in a year that account will be £3k and we will earn over £81 in interest. This is where that money will be working for us. Depending on my variable income, this money will either be entirely new savings or a mix of new and some other savings we already have. Making money work for us is a concept I am new to, and I am still trying to get more into this mindset, including investments etc. as well. One day at a time! 🙂

Money and Frugality

So, my relationship with money is interesting, sometimes I will deliberate for hours/days on buying something, other times it is in my basket and then winging its way to me with no thought at all.

I wonder, what it is about money and spending it, what makes me deliberate over buying item x but not item y. I have to admit, I love money, I love money shuffles- when on payday I go online to my bank and move money to different pots- once all bills have gone out I will then look at the little ‘pots’ of money we have. At the moment, we have Driveway, Holiday and Other, then whatever is left is surplus and can be used for our joint pursuits. This is all in one account so I keep a close eye on them. We get 1.5% in that account so its earning a little something at this time.

I have been looking into frugality recently- ‘sparing or economical as regards of money or food’ and ‘simple and plain and costing little’. These are two dictionary definitions of frugality, other views are about being tight, miserly and miserable. I recently discovered The Frugalwoods:

www.frugalwoods.com

These lovely folks have taken frugality and made it their metaphorichal bItch! I joined the challenge Uber Frugal Month Challenge, where you get emails from them every day over a month and you try to be a frugal person for an entire month. I decided it made sense to go from Jan payday to Feb payday, so far, I have spent £84 on starting this blog, not totally frugal, but hopefully I may be able to eventually make a little extra moolah as a sideline from this blog, therefore a possible start to more passive income. I have paid bills, this is something I have no choice over!haha. I have paid for one food shop so far, we do it on a week by week basis and I haven’t had to fill up the car yet. It has helped that I have done two 46hour weeks, so when I haven’t been working I have been too tired! I did walk to the shop and paid through the nose for bread and butter, oh and two cadburys cream eggs feel onto the counter as well- but I walked and any other shops I would have had to drive to.

One of our biggest spends is on food, we are only a family of two humans, yet we regularly spend about £80 a week on food and drinks, not including takeaways- we tend to have one a week- or if we go out for food. We have a lot of food waste, neither of us like cooking, so it can feel like a drag, or I may decide to cook and by that time the veg has gone off. We are trying to meal prep, but long days and hubby working away do sometimes mean we just can’t be bothered and will do processed easy meals. This a a two fold problem, one, it is not cost effective and two, it is not healthy.

We already shop at Aldi, we don’t tend to buy brand foods- I am still buying proper salad cream, though that is my only brand item!! This week I am going to make a vegetable pot pie, have made it before and it was soooo good. Also, can make it last a few meals, useful for when I am on long days as can take it in and hubby just heats his up at home. I will make this tomorrow. I am also considering stocking up on more frozen veg, as veg does seem to go off so quickly. Was thinking of cutting up a load of onions and then chucking them in the freezer for future use! Red onions are meant to be really good for gut bacteria, and Aldi only seems to sell frozen white onions. My food shop came to £85 this week, hubby got some bits for his car and I bought two cheap bottles of fizzy wine and creme de cassis- £6.99 a bottle but lasts a few weeks- so those will have increased the cost around £20, but need ot keep an eye on this and try to get the costs and food waste down!

Have you any ideas and tips for low cost food shopping?

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!