good time to buy?

want2bmortgage3

I alreeady have one property which is let out on a long term basis, but I currently lodge myself.

Using equity in my first property I've spoken to a broker and can just about afford to buy a second property, which I could live in.

So my question, is now a good time to buy? Is it a good thing to own more than one property? Or would I be better off carrying on lodging and overpaying on my first mortgage?

Mickygg

String...piece....long.......crystal ball......

Who knows. Do the maths and if it works for you without over stretching then it would be a good time to buy.

want2bmortgage3

The advantage of buying another that I can see would be potential house prices rises, but this is obviously uncertain.

What other factors should I consider? To rent a studio flat I'd have to pay 550/month but to buy a 1 bedroom in the same block with a new mortgage would be 500/month.

Graham_Devon

If you are looking to gain on house price rises, a studio flat probably isn't the way to go.

want2bmortgage3

what about a 1 bed? that is what i'm looking at buying.

BitterAndTwisted

In my opinion one-bedroomed properties are a gamble as they are not as easy to sell as something more akin to a family home. Most people who are looking to buy now should be looking rather more long-term than just the next year or two.

Look at the worst-case scenario and then decide if you could afford to pay two mortgages on only your own salary.

People lose their jobs and that could be either you or your current tenant. What then?

I think, if you're not buying in Central London, property-prices in the next few years will either remain static or drop further down.

You could be better off staying in rented and paying down your current mortgage until you have really substantial equity in the property.

want2bmortgage3

Thanks B+T. I have no worries about my tenant not paying as they don't work anyway the council pays for it. They have a queue of other tenants if these ones moved out.

When you say substantial equity what sort of % would you be talking? I think I currently have 30-35%.

dimbo61

Housing benefit is being cut !!!
Its now £65 per week for a single person, many more changes are on the way.

marathonic

want2bmortgage3 wrote: »

When you say substantial equity what sort of % would you be talking? I think I currently have 30-35%.

If you're buying another property, I think it would be prudent to pay down your mortgage until you have 40% equity and then move to the cheapest mortgage available with as long a term as possible. Then save a 10% deposit for your new place.

With 60% LTV, you'll get access to the cheapest mortgage deals available and this will make it easier to save the deposit for the next place.

If you can't do the above, I'd question how affordable it is to purchase a new place.

Fire_Fox

Depends if you can pay two mortgage if your tenant does not pay or trashes the place so it cannot be let, you fall ill, injured or made redundant and cannot work.

want2bmortgage3

that's interesting, learned something new, didnt realise you got better rates @ higher LTVs. my current rate is 3.49% that was at a LTV rate of property value £150k and loan £100k? is that 67%? now my mortgage is below 90k and if i carried on overpaying instead of buying another place it would be 80k come re-mortgage time, so i could get a lower rate?