Thanks so much to the responses on my blog on Tuesday. You make me feel heard, listened to and certainly not alone in my debt repayment journey. As you were so kind then, I thought I would share my massive life shift today, and a guilty secret and how I’m going to put it right.
Dearly Beloved and I each have a debt repayment schedule. I have put some of our individual debts together onto 0% interest credit cards, which we have tarted from one to the next for quite some time. We are both using them to get rid of unsecured loans and interest baring credit cards. On one of DB’s credit cards, the last payment went out on the 10th of this month. It was a snowballed debt payment, of all the payments he was previously paying and he is now personal debt free. I pay the big share of the big debts and I feel that I’ve got them in hand.
In 2009, when we sold this house, and found one we wanted to buy a tiny cottage. We went back to our mortgage provide – Santandarseholes, who wouldn’t give us a mortgage, SMALLER! than the one we had as we had borrowed too much money, on personal and unsecured loans! So, the house sale fell through and we had to really take our debts in hand. If we wanted to downsize, then we had to do something about it. I embarked on a truly, madly, deeply frugal journey that has reshaped my life. By the early few months of 2012, we will have paid back in excess of 45K!
Now if you wonder what all of this meandering is for, now is the time for my guilty secret. When we bought this house is 2007, we mortgaged ourselves to our armpits and could only afford to have an interest only mortgage. Now believe me, I have done some utterly stupid things in my life but taking out a mortgage on a house I could not afford is the most stupid thing I’ve ever done! Today, in a huge leap, we’ve begun to put it right!
After the 10th, we contacted Santander and have made arrangements to change our mortgage to a repayment mortgage. Even though we are tied into a 6.5% interest rate until the 9th of September 2012 (when our tied in mortgage term ends), we would still be able to pay off £9000 of mortgage capital before we move house. The more we pay off, the bigger the equity and the more money we’ll be able to put down. We are aiming to buy a small house and pay for it in five years!
So, today we lept into the abyss and have signed the repayment mortgage agreement that DB will drop into the local branch of the building society in his lunch break tomorrow! We’ll also be able to over pay up to 10% of the outstanding balance of the mortgage every year! Sometimes, admitting you’re wrong and putting it right is scary. My interest only mortgage was the silliest thing I’ve ever done and now is the time to put it right!