What would you do? 23 June 2007 at 5:31PM in Mortgage-free wannabe 4 replies 717 views

h158

House been valued at £235k, got a £70k mortgage. Looking at 2 options. Do the usual 'hike the mortgage up a bit' to move up the ladder a bit....or move down slightly and be mortgage free. We've seen a house that would mean the only compromise we're making is no garage/drive and a small courtyard garden (but that doesn't bother me - no weeds!) and we seem to be gaining bigger spaces room wise (old house).

But if I free up £500 a month (mortgage payment), not sure I'd know what to do with it and where better an investment for your money but property? Would you save this or would you buy a small 2 bedroom terraced house as an investment to rent out?

Thoughts?

Bogof_Babe

I wouldn't buy anywhere without off-road parking. Apart from your own needs, it could put off future buyers should you decide to move on.

No probs re. the garden, as not everyone wants the hassle of tending one.

Could you look around for a property with a driveway, that is still within your price range? Some purpose built blocks of flats have garages. It doesn't seem like you are in any rush, so don't do anything hasty if you have doubts.

daisyroots_2

Property IS a good investment, but remember the old adage about not putting all your eggs in one basket. That £500 a month could buy you an annual ISA, that way you'd be "hedging your bets". If the property market did take a tumble, shares would (probably) go up, and if you needed cash in a hurry, much easier to sell one ISA than to break open a whole house, if you see what I mean.

The second property to let out is a good idea, but might involve more work than you think. And of course, all your eggs would be in the property market.

I've never driven a car in my life so no point asking me about parking, but I'd need to know where the bus stop was!

My gut feeling: downsize to the house you've seen, stash some money in ISAs for a couple of years, then have a look around for the perfect letting property and buy when you're ready.

h158

Thanks for the replies - there is a space cordoned off from the road with enough room to park about 5 cars, only problem is this space doesn't belong to anyone and it's outside the house I'm looking at and next doors. So anyone could park there, but there are only 4 houses in this street so no one else would want to park there really, apart from visitors I suppose.

Bonus that I forgot to mention...It's opposite work for me....not that I travel far at the moment but to all intents and purposes I could sell my car!

I'm swaying towards going for this house, paying off the mortgage, and putting some spare money into ISAs and some into longer term savings.

Let's just hope our house sells now! Board only goes up this week so ...fingers crossed!

daisyroots_2

In my opinion, the time, money and stress saved by being able to walk to work is a huge advantage. The only drawback might be that your colleagues know where you live, and you might not want to be quite so close to work. My husband lived nearest to the office for many years and whenever there was a break in - usually at 1-2am - the Police always called him, nobody else. If you like the house, go for it - is there anywhere at work you could park your car ? If not, try selling it and maybe hiring one for the odd weekend if you need to. They always seem such a liability to me. Good Luck with the sale of your current house - this is a good time of the year to sell.