To sell and pay off or not to sell?

durnessboy

Hi,
I live with my girlfriend and we are in the fortunate position of each owning a property. Hers is a two bedroom worth about £120K (£60K mmortgage outstanding over 19 years), mine is a one bedroom worth about the same (£100K mortgage outstanding over 19 years) as it's in a better part of town. I'm in a dilema as to whether or not to sell my property and use the equity to pay a big chunk of my girlfriends mortgage off.

I rent my property out, the rent means that I actually still need to pay about £300 to the mortgage for my flat though.

If I sell my flat I've worked out that I would have approx £20k in equity to pay a chunk of my girlfriends mortgage. This would leave us with £40k to pay off. With the extra £300 a month which is freed up by my not having to pay off the rest of my mortgage not covered by the rent I have calculated we could pay off the £40k mortgage in about 5years.

So, do I sell and pay off girflriends mortgage 15 years early, or, keep my flat and continue to rent it out and use it as a longterm retirement fund?

Any thoughts would be appreciated

Many thanks

Durnessboy

getmore4less

You are losing money twice on your flat , rent* and equity as prices drop will you ever make money if you keep it?

Can you see any reason to keep the place?


* If the rent is more than the interest then you are building up equity against the falling price so not losing real money till you sell so long term his could work as long as you keep it rented and costs are low.(high risk) so do you want to be in the landlord game if not why keep it?

durnessboy

Hi thanks for the reply.

The only reason i can think of for keeping it is that in say 20 years time I'll have a nice pot of cash for helping with retirement. That's about it I would say.

Durnessboy

getmore4less

Mortgage free in 5y also gives a lot of savings opportunities to build up that pot of dosh.

Ok just so you are aware of the issues you can get by entering into a joint equity/mortgage situation have a look at the posts that say things like getting off a morgage after breakup etc.

You need to think/plan it through carefully and think about all the possibilities especialy as it looks like she allready has £60k equity and you will be bringing £20k to the pot.

durnessboy

Hi,

Thanks for the advice, it's been very helpful.

I feel like I'm erring towards selling. We're getting married in May as well, so am not too worried about the equity issue.