In certain cases, money saved through negotiation on a property can be used as what's referred to as a "Vendor Gifted Deposit".
Here is an example of how a deal such as this would work: Let's say that you find a property advertised at £90,000. It would certainly value at this price but you manage to negotiate a buying price with the vendor of £75,000. What you now need to do is get the seller to price the property in the sale contract at £90,000 and give you £15,000 back at completion. The net result is that you have a mortgage for £75,000 as you would have always done; the vendor receives £75,000 as they would have always done, however now the bank is satisfied that the need for a deposit has been met.
When organising a Vendor Gifted deposit, there are two rules which must be met. Firstly, not all banks accept this method of providing a deposit - so you must find a bank who does. Secondly, the surveyor must agree that the asking price is fair. In other words, we cannot over-inflate the asking price to make it look like a deposit is there.
At the moment, Bank of Scotland and Woolwich will still accept a 5% vendor gifted deposit, whereas Halifax will still do 10%. It is widely thought that this loophole will be closed in the near future.
Vendor gifted deposit is the easiest way of purchasing a house if you don't have at least a 5% deposit to put down.
If you don't have a deposit then I would recommend using the Vendor Gifted Deposit method. Note though that the banks who allow this will not allow unlimited over payments - just 10% per annum. Therefore you need to reduce the term at the outset if you'd like to get your mortgage finished as early as possible.
Ross Taylor is the author of "Money, Mortgages and Magic" and "The No B.S. Credit Crunch Ready Guide to Buy to Let in 2008". Ross is a successful Financial Adviser specialising in First Time Buyers and Buy to Let. He owns over £2million worth of property in the UK and regularly gives lectures on Financial Planning. To read more by Ross please visit http://www.uncommonadvice.co.uk
Article Source: http://EzineArticles.com/?expert=Ross_Taylor
Showing posts with label debt. Show all posts
Showing posts with label debt. Show all posts
Friday, 12 September 2008
Sunday, 7 September 2008
Repossessions are not just the realm of the Subprime
I note from reading American articles that over the pond repossessions are almost wholly a subprime problem. I can assure you that isn't the case here in the UK - and this point is likely to be reinforced in the near future.
Through my job (I am a Mortgage Adviser and closely work with Estate Agents), I am privy to finding out the repossessing lender in homes which are marketed within the Agency I work in. I know this may not be reflective of the country as a whole but I am finding that the majority of repossessions are properties secured with Northern Rock. Now please note that Northern Rock were never a subprime lender. Rather than defaulting on the mortgage because they are people who can't handle credit very well it is more likely that they have been the victim of "rate shock".
Rate shock occurs when people come off their "mortgage deal", whether it is a fixed rate, tracker, discount or whatever. The loan reverts from the deal to the respective bank or building society's Standard Variable Rate (SVR). This rate will generally be 1 or 2% higher than the deal, meaning a huge jump in monthly payments. In the past people would remortgage in order to avoid going onto the SVR by getting a deal with another bank. Due to the Credit Crunch though the banks don't want you if your mortgage is large compared to the value of your house - as many Northern Rock customers have found out.
The scary fact is that 1.2 million homeowners currently on fixed rate deals are due to end within 6 months. Many of these people will have little to worry about - but I estimate that the vast majority will see an increase to monthly payments and at least half will have to adjust their lifestyle in order to cope with rate shock.
The only way of cushioning the blow is to reduce your mortgage debt now in order to soften the blow of rate shock. By taking action now you can offset the jump in monthly costs. Take a look at your finances today. Check that you can overpay on your mortgage and then do so. Every penny counts - literally.
Article Source: http://EzineArticles.com/?expert=Ross_Taylor
Through my job (I am a Mortgage Adviser and closely work with Estate Agents), I am privy to finding out the repossessing lender in homes which are marketed within the Agency I work in. I know this may not be reflective of the country as a whole but I am finding that the majority of repossessions are properties secured with Northern Rock. Now please note that Northern Rock were never a subprime lender. Rather than defaulting on the mortgage because they are people who can't handle credit very well it is more likely that they have been the victim of "rate shock".
Rate shock occurs when people come off their "mortgage deal", whether it is a fixed rate, tracker, discount or whatever. The loan reverts from the deal to the respective bank or building society's Standard Variable Rate (SVR). This rate will generally be 1 or 2% higher than the deal, meaning a huge jump in monthly payments. In the past people would remortgage in order to avoid going onto the SVR by getting a deal with another bank. Due to the Credit Crunch though the banks don't want you if your mortgage is large compared to the value of your house - as many Northern Rock customers have found out.
The scary fact is that 1.2 million homeowners currently on fixed rate deals are due to end within 6 months. Many of these people will have little to worry about - but I estimate that the vast majority will see an increase to monthly payments and at least half will have to adjust their lifestyle in order to cope with rate shock.
The only way of cushioning the blow is to reduce your mortgage debt now in order to soften the blow of rate shock. By taking action now you can offset the jump in monthly costs. Take a look at your finances today. Check that you can overpay on your mortgage and then do so. Every penny counts - literally.
Article Source: http://EzineArticles.com/?expert=Ross_Taylor
Inflation and Recession - Look Through the Statistics to Find the Real Story
Two pieces of data reaching my desk today have once again made me question the value of headline statistics.
Firstly, the Organisation for Economic Co-Operation and Development has predicted that Britain is on the brink of recession with negative growth forecasted for second half of 2009. This is the first time that any of the major economic forecasters have used the "r" word. The OECD is very bearish when it comes to the UK, especially when compared to the US, which has predicted growth will rise to 1.8%.
However, also this morning I have watched score of videos on Youtube from the American politician, Ron Paul with quite opposing views. I've also seen Wall Street economists blast the Whit House for cutting figures released to suit their own political agenda. This is something we see regularly here in the UK too. Note that the children are now to remain in schooling to the first leaving date after their 16th birthday - who think this decision may have been made to massage unemployment figures on the brink of a recession?
Secondly, the OECD predicted that inflation would see some moderation, assuming commodity prices stay where they are. Note the italics! There is more chance of Elvis Presley winning the Euromillions than commodity prices standing still. Oil is considerably more expensive than it was last year - no argument. Primary industry is spending more to grow, dig or farm hence we will pay more at the checkout counter. Also, even if inflation were to fall back to 3%, it doesn't put any more cash in our pockets. Quite the opposite in fact. Imagine if a tank of petrol costs £100 in year 1, and then rises to £110 in year 2 because inflation is 10%. If, in year 3, inflation falls to 3%, then a tank now costs £113.30 - it doesn't recede back to £103.
At times of financial turmoil my recommendation is to get the fundamentals in place. Look after shelter, food and fuel before anything else. If you have a mortgage then don't give a hoot about what car you are going to get next year, what holiday you are going on, what rate you can get on an ISA, or what is going to happen with inflation. Instead, use absolutely every spare penny you have to bring down your mortgage debt.
By doing this you will at least ensure you have a roof over your head, whilst others can't sleep at night with worry.
Firstly, the Organisation for Economic Co-Operation and Development has predicted that Britain is on the brink of recession with negative growth forecasted for second half of 2009. This is the first time that any of the major economic forecasters have used the "r" word. The OECD is very bearish when it comes to the UK, especially when compared to the US, which has predicted growth will rise to 1.8%.
However, also this morning I have watched score of videos on Youtube from the American politician, Ron Paul with quite opposing views. I've also seen Wall Street economists blast the Whit House for cutting figures released to suit their own political agenda. This is something we see regularly here in the UK too. Note that the children are now to remain in schooling to the first leaving date after their 16th birthday - who think this decision may have been made to massage unemployment figures on the brink of a recession?
Secondly, the OECD predicted that inflation would see some moderation, assuming commodity prices stay where they are. Note the italics! There is more chance of Elvis Presley winning the Euromillions than commodity prices standing still. Oil is considerably more expensive than it was last year - no argument. Primary industry is spending more to grow, dig or farm hence we will pay more at the checkout counter. Also, even if inflation were to fall back to 3%, it doesn't put any more cash in our pockets. Quite the opposite in fact. Imagine if a tank of petrol costs £100 in year 1, and then rises to £110 in year 2 because inflation is 10%. If, in year 3, inflation falls to 3%, then a tank now costs £113.30 - it doesn't recede back to £103.
At times of financial turmoil my recommendation is to get the fundamentals in place. Look after shelter, food and fuel before anything else. If you have a mortgage then don't give a hoot about what car you are going to get next year, what holiday you are going on, what rate you can get on an ISA, or what is going to happen with inflation. Instead, use absolutely every spare penny you have to bring down your mortgage debt.
By doing this you will at least ensure you have a roof over your head, whilst others can't sleep at night with worry.
Thursday, 28 August 2008
4 Things that First Time Buyers Must NOT do!
Go to every Mortgage Adviser in town - it is well known that every time a credit check is ran on you a "footprint" is left. When banks review your credit they see these footprints and assume that you must have been declined - or else why would you be asking them for money? The easy way to find the best mortgage deal is to simply go to the best mortgage adviser in town. Locate a good, local, independent, whole of market mortgage adviser.
Suffer Paralysis by analysis - all First Time Buyers set off with the intention that they will shop around until they find the perfect property. Unfortunately the perfect property doesn't exist, and some amount of compromise is always required. Don't view so many houses that you begin to forget why a certain place was once your favourite. The same applies to mortgage deals if you read too many articles and sit with too many advisers your head will start to go round and round in circles. This feeling is paralysis by analysis. Eventually you will be so scared to make the wrong decision that you won't make any decision at all. To combat this just set your stall out at the beginning, i.e. if you want a 3 bed with ORP in a good area then stop when you find it. Don't wait for the perfect 3 bed with lots of ORP in a fantastic area.
Overstretch themselves - the simple rule to follow is go for the cheapest property you will be happy in. Stick to the traditional 2.7 times joint earnings for your mortgage. It is better to live in a lesser home and have a life than to live in a mansion but have spam for tea every night.
Say no to life insurance - as a FTB it is likely that you will have no life insurance before you take out your first mortgage. Many FTB's leave it that way as they feel that it something they don't really require. However there comes a time in everyone's life when they want life insurance. It usually comes when you have children, or when you have a health scare. Now be aware that Life Insurance isn't always cheap. A £10 policy at age 21 will be considerably more expensive when your aged 41. I am the Tightest Man in Britain and I can still see that life cover is a necessary evil.
Get fooled by shared ownership - Shared ownership or shared equity essentially means paying the same as a mortgage month to month but only getting a percentage of the good stuff - appreciation! Instead of using shared ownership as a means of buying a bigger house, how about the quaint notion of starting at the bottom of the ladder and working your way up?
If First Time Buyers were to heed this advice then they will find the whole process a much more interesting journey.
Suffer Paralysis by analysis - all First Time Buyers set off with the intention that they will shop around until they find the perfect property. Unfortunately the perfect property doesn't exist, and some amount of compromise is always required. Don't view so many houses that you begin to forget why a certain place was once your favourite. The same applies to mortgage deals if you read too many articles and sit with too many advisers your head will start to go round and round in circles. This feeling is paralysis by analysis. Eventually you will be so scared to make the wrong decision that you won't make any decision at all. To combat this just set your stall out at the beginning, i.e. if you want a 3 bed with ORP in a good area then stop when you find it. Don't wait for the perfect 3 bed with lots of ORP in a fantastic area.
Overstretch themselves - the simple rule to follow is go for the cheapest property you will be happy in. Stick to the traditional 2.7 times joint earnings for your mortgage. It is better to live in a lesser home and have a life than to live in a mansion but have spam for tea every night.
Say no to life insurance - as a FTB it is likely that you will have no life insurance before you take out your first mortgage. Many FTB's leave it that way as they feel that it something they don't really require. However there comes a time in everyone's life when they want life insurance. It usually comes when you have children, or when you have a health scare. Now be aware that Life Insurance isn't always cheap. A £10 policy at age 21 will be considerably more expensive when your aged 41. I am the Tightest Man in Britain and I can still see that life cover is a necessary evil.
Get fooled by shared ownership - Shared ownership or shared equity essentially means paying the same as a mortgage month to month but only getting a percentage of the good stuff - appreciation! Instead of using shared ownership as a means of buying a bigger house, how about the quaint notion of starting at the bottom of the ladder and working your way up?
If First Time Buyers were to heed this advice then they will find the whole process a much more interesting journey.
Saturday, 9 August 2008
Dealing with Negative Equity
Negative Equity basically means that the size of your mortgage AND any secured loans you may have is greater than the value of your house. The scourge of the 1990s is back in a big way and is set to engulf a whole new generation of home-owners. International investment bank Morgan Stanley has said that 1.2 million British homes could be in negative equity before the end of next year. Contrary to speculation and rumours, being in Negative Equity does not mean that you will automatically be threatened with repossession by your lender.
However, you are going to have issues ahead of you which could cause a lot of sleepless nights. When your current mortgage deal ends it will be impossible to switch to a competitive new product unless you have a large windfall of cash in order to reduce your outstanding debt. Consequently you will be stuck on your bank's Standard Variable Rate (SVR) which will be somewhere between 6.5% to 10% and above. For most people this will lead to much larger monthly payments. Also, because the rate is variable it could rise in the future as the government puts pressure on the Bank of England to control inflation.
This jump in monthly payments is referred to as "rate shock" and this is what you should be really worried about. If your mortgage was to go up by £500 a month, would that cause you problems? Don't take it lightly, higher mortgage payments lead to arrears and arrears lead to repossession. Already, there have been more repossession procedures started in 2008 than in any other year since 1992. It doesn't matter if you live in a slum or in the best neighbourhood in town - the bank don't care. Families are being moved out of their homes under force because they can't come to terms with the rate shock.
Can you imagine the shame? Can you imagine the embarassment of having to phone an estate agent to go back into a property which was once your family home? How would it feel to look your children in the eye when you are in the waiting room at the council emergency housing office?
Repossession is not the end of the matter however. What most people don't realise is that you still have responsibility for the property until it is sold. When the locks get changed - you are charged. Also, with today's market it is not guaranteed that the property will sell quickly. As the market shrinks the debt piles up and the likelihood of a repossessed owner getting on the ladder again shrinks and shrinks.
So what should you do as a homeowner with negative equity? Well the answer to that is really based on your own circumstances and independent advice should be sought. It is universally the case, however, that you can create equity more easily than you first realise. By channelling cash into the right funds, taking a long term view and paying yourself first, Negative Equity can quickly become a thing of the past.
However, you are going to have issues ahead of you which could cause a lot of sleepless nights. When your current mortgage deal ends it will be impossible to switch to a competitive new product unless you have a large windfall of cash in order to reduce your outstanding debt. Consequently you will be stuck on your bank's Standard Variable Rate (SVR) which will be somewhere between 6.5% to 10% and above. For most people this will lead to much larger monthly payments. Also, because the rate is variable it could rise in the future as the government puts pressure on the Bank of England to control inflation.
This jump in monthly payments is referred to as "rate shock" and this is what you should be really worried about. If your mortgage was to go up by £500 a month, would that cause you problems? Don't take it lightly, higher mortgage payments lead to arrears and arrears lead to repossession. Already, there have been more repossession procedures started in 2008 than in any other year since 1992. It doesn't matter if you live in a slum or in the best neighbourhood in town - the bank don't care. Families are being moved out of their homes under force because they can't come to terms with the rate shock.
Can you imagine the shame? Can you imagine the embarassment of having to phone an estate agent to go back into a property which was once your family home? How would it feel to look your children in the eye when you are in the waiting room at the council emergency housing office?
Repossession is not the end of the matter however. What most people don't realise is that you still have responsibility for the property until it is sold. When the locks get changed - you are charged. Also, with today's market it is not guaranteed that the property will sell quickly. As the market shrinks the debt piles up and the likelihood of a repossessed owner getting on the ladder again shrinks and shrinks.
So what should you do as a homeowner with negative equity? Well the answer to that is really based on your own circumstances and independent advice should be sought. It is universally the case, however, that you can create equity more easily than you first realise. By channelling cash into the right funds, taking a long term view and paying yourself first, Negative Equity can quickly become a thing of the past.
Wednesday, 30 July 2008
Save Money by Giving up Work!
In “Mortgages, Money and Magic” I relay a plan where anyone on an average wage can pay off their mortgage within 10 years. As a mortgage (or rent for those who let) is one of life’s biggest costs it makes sense to shake off the debt as soon as possible. Once the mortgage has gone it could create the freedom in your life to:
Spend quality time with your family and friends.
Be more full of life as opposed to living Groundhog Day.
Follow opportunities that you wouldn’t have time for before.
Make a contribution to the world.
Take on a job which reflected your values or interests as opposed to being a wage slave.
For me, being Mortgage free would mean the end of the 9-5 routine. I could get up when I wanted, read the books I wanted to read, participate in hobbies, and most importantly spend time with my loved ones. Live would be for living!
However, there are still bills to pay when your mortgage is finished. There is still council tax and utility bills. Insurances and food. I have dealt separately with building residual income streams, but in this article I wanted to show that ending your job can actually free up cash. Look at it this way:
Commuting – by not working we no longer have to indulge in the tedious daily pursuit of commuting. The average distance traveled by UK workers is 8.5 miles to work making a round trip of 17 miles. At 15p a mile that makes the weekly petrol cost up to £12.75 or £55.25 per month. We should also take into account wear and tear, road tax, car insurance and parking. Therefore by giving up work you could save roughly £100 per month on traveling.
Work clothes – if you no longer work, or work from home there is nothing stopping you staying in your pyjama’s for the whole day. There’s no need to get a new suit every six months, makeup, fancy shoes, briefcases or even shaving foam! In total, another saving of at least £25 per month.
Meals – it’s hard to get away from shelling out at least a couple of quid on meals everyday but if your no longer in the rat race you’ll have had such a healthy breakfast you’ll no longer need the midday sugar rush.
Childcare – if you are no longer in full time work you’re going to make a saving in Child Care cost. Remember the Golden Rule with Kids – Presence is more important than presents. A day spent having fun with your kids is worth a million nights of coming home knackered and slumping in front of the TV, irritated by the children’s noise. £140 per month saved for those with kids.
Escape Costs – if you day is spent doing worthwhile and rewarding activities they’ll be less need to “treat yourself” with escapist activities such as boozing, meals out, cinema trips, ten pin bowling etc. We shall quantify this as a saving of £50 per month.
No more daily grind – we refer to work as the daily grind because that is exactly what it is. By avoiding it our health will naturally improve. When others are in their 1m x 1m cubicle you could be in the park with the kids, down at the sauna or hiking round your local hills. Which do you think is healthier? It’s hard to put a monetary value on your health but it’s obvious that savings are there to be made. Prescriptions and medicine are the obvious ones. Let’s average it out at £10 per month.
In “Mortgages, Money and Magic” I recommend avoiding Foreign Holidays as a means to making overpayments on your mortgage. This sacrifice is easier to make if you no longer have a 9-5 job – every day is a holiday! Save yourself £100 per month easy.
There are numerous over little savings that can be made too: reduced mobile phone bills, less mileage to Conferences etc, trade magazines no longer required, less need to buy raffle tickets/ sponsor workmates. The list goes on.
In summary if you need £1000 to live on when you are a worker; this could easily be reduced to about £750 when “work-related” costs are removed. Think about these when planning your future after your mortgage is paid off.
Spend quality time with your family and friends.
Be more full of life as opposed to living Groundhog Day.
Follow opportunities that you wouldn’t have time for before.
Make a contribution to the world.
Take on a job which reflected your values or interests as opposed to being a wage slave.
For me, being Mortgage free would mean the end of the 9-5 routine. I could get up when I wanted, read the books I wanted to read, participate in hobbies, and most importantly spend time with my loved ones. Live would be for living!
However, there are still bills to pay when your mortgage is finished. There is still council tax and utility bills. Insurances and food. I have dealt separately with building residual income streams, but in this article I wanted to show that ending your job can actually free up cash. Look at it this way:
Commuting – by not working we no longer have to indulge in the tedious daily pursuit of commuting. The average distance traveled by UK workers is 8.5 miles to work making a round trip of 17 miles. At 15p a mile that makes the weekly petrol cost up to £12.75 or £55.25 per month. We should also take into account wear and tear, road tax, car insurance and parking. Therefore by giving up work you could save roughly £100 per month on traveling.
Work clothes – if you no longer work, or work from home there is nothing stopping you staying in your pyjama’s for the whole day. There’s no need to get a new suit every six months, makeup, fancy shoes, briefcases or even shaving foam! In total, another saving of at least £25 per month.
Meals – it’s hard to get away from shelling out at least a couple of quid on meals everyday but if your no longer in the rat race you’ll have had such a healthy breakfast you’ll no longer need the midday sugar rush.
Childcare – if you are no longer in full time work you’re going to make a saving in Child Care cost. Remember the Golden Rule with Kids – Presence is more important than presents. A day spent having fun with your kids is worth a million nights of coming home knackered and slumping in front of the TV, irritated by the children’s noise. £140 per month saved for those with kids.
Escape Costs – if you day is spent doing worthwhile and rewarding activities they’ll be less need to “treat yourself” with escapist activities such as boozing, meals out, cinema trips, ten pin bowling etc. We shall quantify this as a saving of £50 per month.
No more daily grind – we refer to work as the daily grind because that is exactly what it is. By avoiding it our health will naturally improve. When others are in their 1m x 1m cubicle you could be in the park with the kids, down at the sauna or hiking round your local hills. Which do you think is healthier? It’s hard to put a monetary value on your health but it’s obvious that savings are there to be made. Prescriptions and medicine are the obvious ones. Let’s average it out at £10 per month.
In “Mortgages, Money and Magic” I recommend avoiding Foreign Holidays as a means to making overpayments on your mortgage. This sacrifice is easier to make if you no longer have a 9-5 job – every day is a holiday! Save yourself £100 per month easy.
There are numerous over little savings that can be made too: reduced mobile phone bills, less mileage to Conferences etc, trade magazines no longer required, less need to buy raffle tickets/ sponsor workmates. The list goes on.
In summary if you need £1000 to live on when you are a worker; this could easily be reduced to about £750 when “work-related” costs are removed. Think about these when planning your future after your mortgage is paid off.
Monday, 28 July 2008
Pay off your Mortgage in 10 years - avoid the 7 Deadly Sins!
It’s amazing how many of the new ideas and theory’s that come out are simply a rehash of previous doctrines. Look at the Law of Attraction – and then compare it to ideas set out in the bible 2000 years ago, “ask and it shall be given unto you, seek and ye shall find”. In “Mortgages, Money and Magic” I set out a plan as to how any average couple can buy a property without requiring a deposit and then go on to own that property outright within 10 years. Obviously you can’t make an omelette without breaking some eggs. Sacrifices have to be made. Here I will look at the 7 main sacrifices as they relate to the 7 deadly sins.
Envy – When someone buys themselves a new car or a new holiday you are going to be jealous. You have to realise though that you don’t need material things to make yourself feel better. The person with the new car has probably dug themselves deeper into debt to get the short lived buzz of having something new. Think of the car, the holiday or anything else that will be available to you when the millstone of a mortgage is taken off your neck. Sacrifice getting a new car – stick to secondhand.
Pride – It’s good to support your team, but with the average in the Premiership season ticket at £615 it’s not cheap. Try to achieve value for money in everything you do. Learn to do without. I can guarantee you that going to football matches is something that can quite easily be substituted for other less expensive pastimes. Sacrifice going to the Football.
Sloth – You get nothing for nothing. In order to pay off your mortgage within a decade it is necessary to get off your bottom and actually earn some cash. The beauty of my plan however is that I can show you how to do it without being a city whiz kind. An “average” job paying £22,000 to £26,000 would be sufficient. If necessary sacrifice evenings and weekends now so that your mortgage is paid off by the time you reach middle age. You’ll have more time than ever when your mortgage is paid off whilst your contemporaries are still struggling.
Greed – it’s never good to have too much of something so make your money compartmentalized. You should have a fund for repairs, a fund for food, a fund for clothes etc. By separating your cash out it makes it much harder to get greedy. All greed is ultimately self-destructive but make sure you sacrifice the worst source of greed – alcohol.
Wrath – Don’t get angry when someone lights up next to you, think of the money they are burning away when they buy that packet of ciggies – and feel safe in the knowledge that you will be mortgage free whilst they are literally burning cash daily. Sacrifice the fags.
Gluttony – there is no need to be a glutton with takeaway after takeaway when it is possible to eat like a king for 50p a night. Get creative in the kitchen and your wallet AND waistline will benefit.
Lust – having a sex drive can be the impetus for a lot of good change in your life, but draw the line when the lust inside you means you are throwing money down the pan. Make sure you embark on this plan with the person you intend to be with for the duration. Sacrifice the casual relationships.
In summary, without winning the lottery or having a massive life insurance payout, paying off your mortgage within 10 years is going to take many sacrifices. Deep down we know that these sacrifices are for the best because the Seven Deadly sins are all instinctive. They are innate. To achieve the goal you must: sacrifice the new car; sacrifice the foreign holiday; bring in at least an average wage; sacrifice cigarettes and alcohol; sacrifice the takeaways and sacrifice the casual sex.
If you have the strength of character to achieve this then you are well on the way to being able to pay your mortgage off in a decade.
Envy – When someone buys themselves a new car or a new holiday you are going to be jealous. You have to realise though that you don’t need material things to make yourself feel better. The person with the new car has probably dug themselves deeper into debt to get the short lived buzz of having something new. Think of the car, the holiday or anything else that will be available to you when the millstone of a mortgage is taken off your neck. Sacrifice getting a new car – stick to secondhand.
Pride – It’s good to support your team, but with the average in the Premiership season ticket at £615 it’s not cheap. Try to achieve value for money in everything you do. Learn to do without. I can guarantee you that going to football matches is something that can quite easily be substituted for other less expensive pastimes. Sacrifice going to the Football.
Sloth – You get nothing for nothing. In order to pay off your mortgage within a decade it is necessary to get off your bottom and actually earn some cash. The beauty of my plan however is that I can show you how to do it without being a city whiz kind. An “average” job paying £22,000 to £26,000 would be sufficient. If necessary sacrifice evenings and weekends now so that your mortgage is paid off by the time you reach middle age. You’ll have more time than ever when your mortgage is paid off whilst your contemporaries are still struggling.
Greed – it’s never good to have too much of something so make your money compartmentalized. You should have a fund for repairs, a fund for food, a fund for clothes etc. By separating your cash out it makes it much harder to get greedy. All greed is ultimately self-destructive but make sure you sacrifice the worst source of greed – alcohol.
Wrath – Don’t get angry when someone lights up next to you, think of the money they are burning away when they buy that packet of ciggies – and feel safe in the knowledge that you will be mortgage free whilst they are literally burning cash daily. Sacrifice the fags.
Gluttony – there is no need to be a glutton with takeaway after takeaway when it is possible to eat like a king for 50p a night. Get creative in the kitchen and your wallet AND waistline will benefit.
Lust – having a sex drive can be the impetus for a lot of good change in your life, but draw the line when the lust inside you means you are throwing money down the pan. Make sure you embark on this plan with the person you intend to be with for the duration. Sacrifice the casual relationships.
In summary, without winning the lottery or having a massive life insurance payout, paying off your mortgage within 10 years is going to take many sacrifices. Deep down we know that these sacrifices are for the best because the Seven Deadly sins are all instinctive. They are innate. To achieve the goal you must: sacrifice the new car; sacrifice the foreign holiday; bring in at least an average wage; sacrifice cigarettes and alcohol; sacrifice the takeaways and sacrifice the casual sex.
If you have the strength of character to achieve this then you are well on the way to being able to pay your mortgage off in a decade.
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