Selling up and using monthly mortgage payments to buy another house?

scrooge786

Hi if this makes any sense I wanted to find out fellow moneysavers views, as i am thinking about selling our house and moving to an area where we can buy a house outright and then use the money we pay to make our current mortgage payments to pay for a mortgage on another house.
I have had our home valued and the estate agent reckons £300,000 we have a mortgage with £115,000 outstanding which would leave £185,000. I was thinking about moving somewhere not too far from London where we could buy a house for that money. We would be mortgage free as we currently pay £840 a month. Would it be worthwile to use that money to buy another house?

PasturesNew

So you want to buy two houses:
- to live in, completely paid for
- one on a BTL mortgage, which you will be able to afford even if it's empty because you aren't paying mortgage on your own house

By all means sell/buy a house for cash to live in, but with house prices falling why would you buy TWO?

scrooge786

Thanks for your quick reply one would have to be on a mortgage a BTL i guess? would you advise to wait for prices to drop further?

PasturesNew

Absolutely. Have you researched the BTL market?
Do you understand the issues landlords are facing?
Rents are dropping in many areas (I believe London is falling before other areas)
Agents are swamped with property to let.
Yield is low and risk is high.

If you don't know the market intimately, why would you want to start a business in a risky sector at a time when the country's just started a recession that is often considered might end up being the WORST recession/dip/downturn, (perhaps DEpression) for over 80 years?

Numbers on a spreadsheet can add up, but reality is a different ball game.

hethmar

Remember that your house price will also be dropping and whether you can sell it at your proposed price is another matter.

scrooge786

So should we buy and sell in a cheaper area now and then wait to use the money going towards our mortgage payments at the moment to fund a BTL mortgage or should we wait altogether i.e. selling our current home?

Swishy_bell

Why not buy one house to live in for cash. Save the £840 a month and buy the second when the market calms down a little with a much smaller mortgage?

McKneff

if youre wanting to make money, buy a bigger house with a granny flat or something similar and rent that out.

scrooge786

I was thinking about my childrens future i.e. i wanted to be able to have something for them just so they dont have tostruggle with buying their homes to live in like we did.

dopester

Crazy.

What about your children's children? Maybe you ought to buy a 3rd house for them as well.... at the start of the greatest house price crash this country has ever seen.

honeypop

scrooge786 wrote: »

I was thinking about moving somewhere not too far from London where we could buy a house for that money.

Not of much help to your question, but just wondering where you were thinking of 'not too far from London', as where I am we consider ourselves as not too far from London, ie 45 mins drive to the outskirts and all £180,000 would get your here is a small house in a very undesirable area!