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Selling House and Being Mortgage Free v Buying with Mortgage and Letting House

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BearWhite
BearWhite Posts: 600 Forumite
Part of the Furniture 500 Posts Combo Breaker Name Dropper
edited 19 January 2013 at 11:31AM in House buying, renting & selling
Hi All,


Thanks in advance and apologies for the snappy title!

Comments

  • BitterAndTwisted
    BitterAndTwisted Posts: 22,492 Forumite
    10,000 Posts Combo Breaker
    Less or no debt is always better than more debt.
  • geoffky
    geoffky Posts: 6,835 Forumite
    we are mortgage free and its a monkey off your back. i would never take a mortgage out when i had the cash in the banks because if rates rise on mortgages....good luck and stay debt free.
    It is nice to see the value of your house going up'' Why ?
    Unless you are planning to sell up and not live anywhere, I can;t see the advantage.
    If you are planning to upsize the new house will cost more.
    If you are planning to downsize your new house will cost more than it should
    If you are trying to buy your first house its almost impossible.
  • Werdnal
    Werdnal Posts: 3,780 Forumite
    Part of the Furniture Combo Breaker
    Relying on rental income to cover your mortgage is never risk free. Rent can dry up if tenant stops paying, you have voids, etc. There are also costs associated with letting, so its not all money in your pocket. You need to declare for tax, get LL insurance, gas safety certificate etc, and still have enough spare to cover unforeseen repairs and maintenance. Letting a property should really be treated as a business, and you need to re-invest in that business to keep it going.

    There are also legal obligations to becoming a LL, so you need to understand what you are letting yourself in for:

    http://forums.moneysavingexpert.com/showpost.php?p=41160642&postcount=12

    If you have an opportunity to become mortgage free, I would do it, and not land yourself with a rental property just for the sake of it!
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