would this be worth doing?

twirlypinky

I consider myself to be reasonably financially savvy, but you guys really seem to know your stuff so i thought I'd ask...

I'm currently living with my boyfriend in his house. He is in negative equity so we're saving to pay that off, and then saving again to put down a deposit on a bigger house so we can start a family. Obviously this is going to take rather a long time - but he really doesn't want to rent, home ownership is really important to him so we're going to try that route.

However, i was just thinking this morning of an alternative to that. What if we didn't pay off his negative equity but instead stuck it out. We save up a deposit to buy another house but in my name (and hopefully house prices will be nice and low by that point) and then just ride the storm with both houses until prices go back up a bit and we can clear the loss?

Or am I simply grasping at straws because I'm so broody:rotfl:, and that's a really stupid idea because prices aren't going to go up enough to make that worth bothering with (esp considering all the one off costs involved with buying a house).:question:

BitterAndTwisted

Instead of saving to get yourselves out of debt, you're fantasising about taking on even more debt? I think you're grasping at straws

twirlypinky

i was hoping that buying a house while they're "cheap" would mean i could earn on the deal. I see your point though, it would just be more debt.

CLAPTON

is your salary alone sufficient to get a suitably sized mortgage?

if you keep his house presumably you would rent it out... would the rent be sufficient to cover the mortgage

do you want to be a landlord?

twirlypinky

I earn £31k so i guess it would depend on the prices at the time.

I'd not really thought about the full stresses of being a landlord, that would certainly be a pain and I'm not sure it would be worth it. It's all a gamble i suppose.

My boyfriend and I aren't married - so if his house is in his name and my house is in mine, we wouldn't have to worry about tax would we??

BitterAndTwisted

I think tax would be the least of your problems. You'll only be living in the one property, wouldn't you? Do not even contemplate becoming a landlord!

I think the most prudent thing to do would be to over-pay on the mortgage until you're out of negative equity.

twirlypinky

Which is what we're doing, so i suppose i should be pleased about that. thanks for the advice.

Evilm

I agree. If you can save for a new deposit then you can save and clear the negative equity instead.

Much less hassle.

lincroft1710

twirlypinky wrote: »

i was hoping that buying a house while they're "cheap" would mean i could earn on the deal.

Houses aren't cheap, they're just cheaper than they have been. If you buy now and house prices fall, you and BF may have 2 houses with neg equity. On £31K pa you would perhaps only get mortgage of 3 times that figure plus you would need a deposit of anything from 10 to 20%.

mynameisdave

twirlypinky wrote: »

We save up a deposit to buy another house but in my name (and hopefully house prices will be nice and low by that point) and then just ride the storm with both houses until prices go back up a bit and we can clear the loss?

But if the prices are nice and low (I'm reading lower than now). You'll have less equity in your house and even greater negative equity in your boyfriends house PLUS two mortgages to pay so the only way to get out then would be house prices rising.

loveGSDs

hiya,

its a great idea, but unfortunately like everything its all a gamble on the house prices rising.

how much negative equity is your bf in? i think if you stick to overpaying on the mortgage and also setting aside a little each month for a deposit ul be doing the best thing.

good luck