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Do I need a mortgage?
Robzilla
Posts: 4 Newbie
Hi everyone,
I am currently living in a two bedroom apartment with my flat mate and we combined pay about 550 in rent per month. After one year living here we negotiated another year verbal agreement with the owner. However, as it currently stands she recently called to say she is looking to sell the apartment and would only sell to a landlord who would agree the same terms which we currently have.
She firstly offered the option for us to buy the apartment which is her preferred outcome. As it so happened I recently came in to some money and can likely afford to buy outright without a mortgage. Is there any benefit for me to have a mortgage? My flatmate will continue to live with me but pay the rent to me. If I can afford the house without a mortgage will this also afford me any bargaining power when it comes to the price. She has offered the apartment to me at £125,000 which is the price a similar property went for four months ago on the same street.
This will be my first property purchase so all advise welcome.
I am currently living in a two bedroom apartment with my flat mate and we combined pay about 550 in rent per month. After one year living here we negotiated another year verbal agreement with the owner. However, as it currently stands she recently called to say she is looking to sell the apartment and would only sell to a landlord who would agree the same terms which we currently have.
She firstly offered the option for us to buy the apartment which is her preferred outcome. As it so happened I recently came in to some money and can likely afford to buy outright without a mortgage. Is there any benefit for me to have a mortgage? My flatmate will continue to live with me but pay the rent to me. If I can afford the house without a mortgage will this also afford me any bargaining power when it comes to the price. She has offered the apartment to me at £125,000 which is the price a similar property went for four months ago on the same street.
This will be my first property purchase so all advise welcome.
0
Comments
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No mortgage offers the chance of a more rapid exchange and sale so it offers an improved negotiating position. What I did was offer a lower price without mortgage than with mortgage and let the seller choose. They may have regretted that: my mortgage lender didn't get me a correct contract until the fifth try.
There's a major advantage to using a mortgage. Your money isn't all tied up in the property, so you can invest it to make more money. Mortgage interest rates are low and typically always lower than long term investment returns. Those are over 5% plus inflation. Inflation is the friend of the mortgage borrower because it reduces the capital value of the debt compared to income, if income keeps up with or beats inflation. Incomes in general increase by inflation plus about 1%, not including individual pay rises for promotions and such, so that does generally happen.
You can buy without mortgage then get a mortgage later. You may have to wait six months to do that.0
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