What wld u do? Save for deposit or be MF

MarieAAP

Hi Folks

I am hoping to move in the next 1-2 yrs, and have thought about doing the following, but let me explain a little background first.

I have just received a statement stating we still owe £2,750+£175 EPC on my mortgage (orig £15k) left WOOTTT :rotfl:, with the endowment due in 2022 (with a current shortfall of £7.5k). The current plan is to rent out my 2 bed place for £400-450 / mth gross. This house will become our pension pot (current value £110k).

And then get a £70-90k mortgage based on our 2 salaries (£35k), and a “donation” / part house share from mum of £20-40k, depending on the price of property she buys, and whatever deposit we can raise. We don’t want to take out an extended mortgage on my current home. The aim is that the new home will be ours. [And on the unlikely chance that my OH and I break up, only the new home will be divided up, and the old home (current), he only contributes living expenses, to will be solely mine. We plan to sign a prenup, and although they are not legally binding, they show intent.]

We currently only have £1k in the emergency fund, but between paying for the new roof and wedding, that account has got shafted. After the wedding (in 2mths), this is the primary fund that will be filled up (cash ISA max).

My Q is this:

After the emergency fund has been filled, should we

a) pay off the rest of the mortgage so we are MF (current OP is £120, but could make that bigger) and then work on the deposit?

b) primarily build up a bigger deposit?

c) other idea?

Now I know house prices / mortgage amounts will change, so I am looking for some opinions at theis current moment in time.

Cheers
Marie

SimbaSimon

MarieAAP wrote: »

Hi Folks

I am hoping to move in the next 1-2 yrs, and have thought about doing the following, but let me explain a little background first.

I have just received a statement stating we still owe £2,750+£175 EPC on my mortgage (orig £15k) left WOOTTT :rotfl:, with the endowment due in 2022 (with a current shortfall of £7.5k). The current plan is to rent out my 2 bed place for £400-450 / mth gross. This house will become our pension pot (current value £110k).

And then get a £70-90k mortgage based on our 2 salaries (£35k), and a “donation” / part house share from mum of £20-40k, depending on the price of property she buys, and whatever deposit we can raise. We don’t want to take out an extended mortgage on my current home. The aim is that the new home will be ours. [And on the unlikely chance that my OH and I break up, only the new home will be divided up, and the old home (current), he only contributes living expenses, to will be solely mine. We plan to sign a prenup, and although they are not legally binding, they show intent.]

We currently only have £1k in the emergency fund, but between paying for the new roof and wedding, that account has got shafted. After the wedding (in 2mths), this is the primary fund that will be filled up (cash ISA max).

My Q is this:

After the emergency fund has been filled, should we

a) pay off the rest of the mortgage so we are MF (current OP is £120, but could make that bigger) and then work on the deposit?

b) primarily build up a bigger deposit?

c) other idea?

Now I know house prices / mortgage amounts will change, so I am looking for some opinions at theis current moment in time.

Cheers
Marie

Personally I'd go for a. It'll be more difficult to get a second mortgage when you already have one so paying the main one off clears that problem and saves paying 2 lots of interest (albeit a small amount of interest). With your payments then freed up you can work on quickly building a large deposit for the second house.

Or do a 2 way split but wait until you've paid the first one off before looking at mortgages for the second one.

MarieAAP

cheeky bump for some more suggestions.

Oh if i pay off the mortgage, I dont need to contact the bank to let them know do I?

M