Become mortgage free and then take on an even bigger mortgage?????

silvercarsilvercar Forumite, Ambassador
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Temptation, temptation.

Reached the stage (at 42) where the children are at secondary school, so more time available to have two of us earning, hubby settled and secure in career etc. My income relatively high but volatile (own business).

Have made massive inroads into mortgage (was over 100k) and in all likelihood it will be completely offset (or paid off) in next couple of months.

We live in a house we love in a not so brilliant area.

To move to another area for the same sort of house will cost loads. We don't really fancy living in the same size house but paying out loads on a mortgage.

So we've found a bigger house in a better area. This will cost mega loads more. But we can see the benefit, for us and the kids, of being there.

Can't help feeling complacent that we paid off one mortgage in a few years we can pay off another one (much bigger) in another few years, give or take.

New mortgage would be about 3 to 3.5 x hubby's salary. We reckon we could afford our current living style and new mortgage etc on his salary. My income would be used to make lump sum repayments on the mortgage. Provided my income continues for a few years we would be fine, if it stopped we could still manage the mortgage, just wouldn't be able to pay extra off it.

Our we totally mad? Should we be happy to have reached where we are?

Anyone else consider doing similar?
I'm a Forum Ambassador on The Coronavirus Boards as well as the housing, in my home and student money saving boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Forum Ambassadors are not moderators and don't read every post. If you spot an illegal or inappropriate post then please report it to [email protected] (it's not part of my role to deal with this). Any views are mine and not the official line of MoneySavingExpert.com.
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  • gentlepurrgentlepurr Forumite
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    no you're not totally mad. would do, or should i say have done (in the past) exactly the same.

    at 42 you are still young enough to stick your neck out and go for as big a mort. as you want to afford for a 23 yr term (some blding soc will go beyond that) and in my book, you never lose money in the long term when investing in property.

    when my oh was 42, we moved from a terraced house (sold for £42,000) to a 4 bed detached (cost exactly double) at the time our son was 18 months old and was in full time nursery. 6 years later, we sold that house, and downsized to another 4 bed detached with half an acre, and a very small mortgage. we now own a house worth £280,000. if we hadn't moved from the terraced house 11 years ago, we would have had a property worth £100,000. so, the moral of the tale is............

    if you can afford it, go for it, and then, if your lifestyle permits, overpay, and get shut of the mortgage asap.

    xx
    "It is not uncommon for slight acquaintances to get married, but a couple really have to know each other to get divorced." - Anonymous
    :)
  • I would not worry about house prices going up

    A house is somewhere where you have to be happy living

    Sounds like he has a reasonable itch to be away so probably worth doing

    I am in our forever house so quite happy
  • lisyloolisyloo Forumite
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    There is no right or wrong answer.

    Personally I think the idea of being debt free and not vulberable to shocks (like illness or redundancy) sound fantastic.
    You could also have great holidays etc. if you are earning but not having to pay a mortgage.

    You need to work out whether the cost is worth it TO YOU.

    Don't forget the house will be an investment and when you are older and need the money you can always downsize.
  • andi2andi2 Forumite
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    It's exactly what we did 17 months ago.

    We paid off our 24k mortgage in 4 years (basically coz we had one rubbish salary when we bought & I was still at uni - then hubby got a better job & I got a job) & were living mortgage free. Decided to have a baby though, so moved to a bigger house in a much better area.

    Have paid 30k off the new mortgage. Will have to slow down now though as little one is 4months old & I'm staying at home to look after her. Have now got to pay the remaining 74k off.

    (I'm 29 by the way)

    Basically I'd say go for it - we're so much happier here cozI don't jump at every noise & wonder what's happening!

    Good luck!
    Smile and be happy, things can usually get worse!
  • PrudentPrudent Forumite
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    It sounds like this would be a good move for you. I am mortgage free after paying off my mortgage in two years. I could have bought a similar house as the one I did without a mortgage, but not in such a good area (although my house is modest to what you are talking about). I do not regret buying where I wanted and having a few years hard struglle to pay off the mortgage.
  • I'd say go for it silvercar! Provided your OH is in a secure job its a risk worth taking, youve paid one mortgage off i am sure you will be well motivated to do it again.
    What is your volatile business??
  • So Silvercar? what have you decided to do? Keep us in the picture......
  • SC, I will be in a similar position in 12 months time, ie will be paying no interest on the mortgage at all.

    This is a rare scenario, and I'm going to exploit it for at least 3 years I reckon.

    I'm going to either pay it off fully, hopefully in a further 5 years, or the other alternative would be to clear it completely, and save like a demon for 1/2/3 years so you have that much less you need to borrow - if you work out the figures, and what interest you will save, it might well make sense.

    Dan
  • alanobrienalanobrien Forumite
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    silvercar wrote:
    Temptation, temptation.

    Reached the stage (at 42) where the children are at secondary school, so more time available to have two of us earning, hubby settled and secure in career etc. My income relatively high but volatile (own business).

    Have made massive inroads into mortgage (was over 100k) and in all likelihood it will be completely offset (or paid off) in next couple of months.

    We live in a house we love in a not so brilliant area.

    To move to another area for the same sort of house will cost loads. We don't really fancy living in the same size house but paying out loads on a mortgage.

    So we've found a bigger house in a better area. This will cost mega loads more. But we can see the benefit, for us and the kids, of being there.

    Can't help feeling complacent that we paid off one mortgage in a few years we can pay off another one (much bigger) in another few years, give or take.

    New mortgage would be about 3 to 3.5 x hubby's salary. We reckon we could afford our current living style and new mortgage etc on his salary. My income would be used to make lump sum repayments on the mortgage. Provided my income continues for a few years we would be fine, if it stopped we could still manage the mortgage, just wouldn't be able to pay extra off it.

    Our we totally mad? Should we be happy to have reached where we are?

    Anyone else consider doing similar?


    I did exactly this last year and our kids are only 6 and 3.
    My mortgage was all but paid off and we had a nice house in an area that was rapidly going downhill.

    In the end for the kids sake and our sanity we bit the bullett and moved to a bigger place in an expensive area taking on a new mortgage of 6 figures.

    I don't regret it for a second.
  • silvercarsilvercar Forumite, Ambassador
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    What did I decide to do???

    Our current view is we are going for it. I just wanted to know if people thought we are as mad as I think we are for doing it.

    At the moment we are held up waiting to exchange until the women at the top of the chain agrees to exchange. She wants to sort out her late husband's estate before exchanging, though she has no real need to do this as she is the sole owner of her house. She said in January she needed 2 to 4 weeks; she doesn't seem to be able to count! The FTB at the other end of the chain have told my buyer's to exchange this week with completion first week of April or they are pulling out. We won't put ourselves in the position of exchanging on our sale without exchanging on our purchase because we like our house and have no real need to move; I might be doing something mad, but I'm not totally stupid. Our buyer's will do it though as they are desparate to move and have waited 2 years for buyers.

    Apparently our buyer's are going to put an offer in on another property this week so that if they don't get our house they will have another option. I doubt the other seller will take them seriously when they are also pursuing another property (same EA). I know the other seller is planning on emigrating in July so he has time on his side and there are 2 others interested in his house. Our house is bigger and detached so if we can exchange in the time it would take to do all the paperwork on the other property we still have a good chance of keeping our buyer.

    Fingers crossed it all holds together, if it doesn't then it clearly wasn't meant to be.
    I'm a Forum Ambassador on The Coronavirus Boards as well as the housing, in my home and student money saving boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Forum Ambassadors are not moderators and don't read every post. If you spot an illegal or inappropriate post then please report it to [email protected] (it's not part of my role to deal with this). Any views are mine and not the official line of MoneySavingExpert.com.
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