Should I Downsize To Pay Off Mortgage ?

DCodd

Really the thing to do is find a good financial advisor and run it past them. As you can give them all the info needed i.e. current ISA's, investments and available investments etc etc.

You will have £485,000.00 worth of assets (at todays money) in 9.5 years time, if you stay as you are.

If you move to a £250k house and keep the Ski Apartment you will have £310,000.00 of assets in 9.5 years time with (at a rough guess) £305,000.00 in the Bank, if you save all the £2,500.00 mortgage payments in 2 crap 3.5% 5 year bonds (after tax). VERY VERY ROUGHLY.

Do you expect your properties to increase by £130k + in 9.5 years?

Bear in mind that your figures do not add up. If you have a house worth £425,000.00 and a Mortgage of £225,000.00 the you will have £200,000.00 left and not £250,000.00, unless you are keeping £50,000.00 mortgage on the Ski apartment? in which case you will only be saving around £1,900.00 on mortage payments each month.

You need good professional financial advice!

gaz1000gaz

Hi,

I think you are right. We do need financial advice.

Whats harder now is 3 estate agents came today and valued the house at
1. £400,000
2. £425,000 - £450,000
3. Offers in excess of £475,000 - or to try £495,000

!!!!!!!!!!!!!!!

Maybe £450,000 asking price is the way to go and look to achieve around or over £425,000.

In answer to the apartment question, we were looking to either sell both and back around £250,000 after fees etc, or sell house, and raise a £60,000 mortgage on the ski apartment over 20 years art around £275pcm. The gross return os £7k per year on the apartment, less £2k fees and tax, so should still clear £2k.

Then we would live in a £250k hosue mtge free, and have a £60k mtge in France which pays for its self and gives us a £2k profit.

What do you think ?

Thanks

ShineOn

DD7 makes some valid points, although the costings can vary wildly. We took advantage of an excellent deal with the property developers which included having all estate agent, solicitors and stamp duty paid and a very nice convervatory thrown in.

It's probably more luck than judgment, but the new place (£300k) would appear to have gone up in value since our move 3 years ago while the old place (£390k) has gone down.

The way I see it, it's all a question of peace of mind. If you're happy seeing all your hard-earned tied up in a whopping mortgage and if you can sleep easy knowing illness or loss of work could risk everything you have, then stay where you are.

As someone 10 years or so older and maybe wiser, I'd rather settle for something a little less big and enjoy the benefits that come from all my hard work...

gaz1000gaz

I think you have hit the nail on the head really - perhaps I made a mistake last year reducing the mortgage to 10 years and doubling the monthly payment. I rang the bank today to ask if i could increase the term. They said yes, with no penalty. So i could increase to 25 years and pay £1150 a month.

Could be a good option short term until i make a firm decision ?

All the best

Paul

missindecisive

STAY.

Have you thought about what it would be like to live in the type of house you describe? the house would be fine im sure, but have you ever lived on a housing development? it might be quite a different set up to what you are currently used to.

Debt_Free_Dreamer

I live in a good sized house and I often think, we should have spent less, had more holiday's etc., But each time I visit a friend, who has a smaller (but still very nice) house, I think. I could not live here. I could not put up with the limited space.

When we were house hunting I would look at the size of the 4th bedroom and if it was less that 10ft x 8ft I gave the details back and would not even view it. For me it was about space, nothing else. We eventually got the space by buying a property that needed lots of work (and we are still doing the work now several years later)

Could you live in a (possibly) smaller house and still be happy?

Would I move? No, our junk would never fit in a smaller house. Have you considered that?