Mortgage free life means the eradication of debt and the ability, in most cases, to live more flexibly. A mortgage is often the most significant purchase any person will make in their lifetime, and is usually spread out over the course of 25 years to assist with repayments. Most Britons spend the majority of their adult lives paying off their mortgage and the cloud of debt is often described as restrictive.
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However, for one homeowner, the feat of mortgage free was conquered in just eight short years, meaning mammoth savings in interest.
Taking to the website Reddit, the savvy saver revealed how he and his wife were able to pool their income to become debt free at 44.
And the user also revealed his top tips and tricks for others in a similar position.
He wrote: “I just sent off my last mortgage payment. Debt free at 44! Paid off a 30-year mortgage in eight years, saving over 80,000 in interest. It feels good!”
The pair, who do not have any children, make a combined total of £90,000 per year before taxes, and were able to buy a house within their budget at an early age.
The user explained his key advice to those looking to purchase a home outright, or pay off a mortgage early.
He said: “Buy well within your means. And be realistic about your means. There is a difference between what works and what you want, and you need to learn to be initially content with basics.
“Don’t buy that shiny luxury car on credit – buy a good used car and learn to take care of basics maintenance yourself. Save up and pay in cash if able.
“Same with the first house. When you get free of debt, then you can start looking at that shiny car and that pristine house.”
The homeowner also stated it was important to keep an emergency fund for difficult periods of time in life, such as unemployment.
He added: “If you weren’t great at maths in school, still try to learn how interest works against you when taking out debt.
“Use reputable mortgage/loan interest calculators online and explore payoffs. I use spreadsheets to calculate and track all of my finances and it is invaluable when attempting to forecast.”
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And the homeowner also stressed the importance of understanding how much debt a person can take on.
Concluding the tips, he said: “Don’t assume more debt than absolutely necessary. What the bank will lend you and what you can safely afford are two wildly different numbers.
“By all means get a fixed mortgage, but see what it would take to pay that off a few decades early, and use that number to determine how much house you can afford.
“If you can’t afford the downpayment, you can’t afford the house. If you take out all the mortgage that the lender will give you, you will be a debt slave for many, many years.”
The homeowner stated he was able to put over £1,000 into savings each month by radically cutting down on spending, and ruthlessly budgeting.
He kept six months emergency expenses in savings, and made a large overpayment on his mortgage once or twice a year.
Mortgage repayment often proves difficult, however, there are various options available to Britons who are looking to pay off the sum at an earlier date.
The Money Advice Service states overpayment is often the most popular option for those looking to become homeowners earlier.
However, the service advises all Britons to check if they will be charged for overpaying their mortgage.
Making a monthly payment which exceeds the agreed monthly limit or paying off the sum early could incur additional charges.
The service states many lenders will allow potential homeowners to overpay by up to 10 percent a year without penalties.
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