Is MF the best course of action?

bodmil

I realise I might be preaching to the choir in some way here but hopefully I can reduce my confusion some how...

Obviously a mortgage is a debt incurring interest so the clear answer is yes, it's best to get rid of it as quick as possible. So with that in mind, for my first property I am looking to borrow as little as possible.

But is a mortgage such a bad thing, and would I be silly to increase my borrowing (still within a manageable amount) to buy in a nicer area?

It's not to say I would be limiting my quality of life with a cheaper property and I could end up with the same amount of money spare at the end of the month if I compare overpayments on a small mortgage to minimum on another.


It does seem an obvious answer, but with the banks increasing their lending and rightmove teasing me with all these lovely photos I find myself wondering if another 10, 15, 20k could be worth it....
If it's of any help, I'm young free and single at the moment and plan to have lodgers to help to cover the cost of everything and keep me company. I'm not looking at a forever family house, just looking to do everything I can to help buy a fantastic one in 10-15 years time, in case that makes any difference.


Many thanks all.

deedee71

In your circumstance I would look at buying a house with "income/investment" in mind.

If you can get a room mate in the cheaper area, and aren't fussed about it being a family home/your castle etc, then that is what you should focus on....as a way of financing your future.

bodmil

... so should I increase my debt to increase my investment potential?

deedee71

Income from room rental and getting equity in the property are two different things. You need to decide what your strategy is.

I would go for a cheaper property, rent out a room, pay off lots of the mortgage so when you do trade up to your dream family home you can do so with less financial pain/burden.

If you buy a more expensive property, would you really be able to charge a sufficiently higher rent for a room in it to justify the extra mortgage payments? Who knows what the future mortgage and property scenarios will be. But you only need to read through some of the other threads on here to see the pain a large mortgage can cause.

Lara44

Make sure you choose somewhere that you like, that is a safe place to live. After all you will be living here and also hoping to attract tenants too.

Look at the price increases in terms of value - what do they deliver? Is the 10k more house (for example) much bigger, is it better placed for transport links? If 10k would take you from the roughest part of town to a safe and quiet neighbourhood then for me it would certainly be worth it. However if it takes you from one nice neighbourhood to a slightly nicer neighbourhood then maybe not. HTH