Buy outright or buy with mortgage?

ognum

thisisnotthetruth wrote: »

My Hometown(where I live now) is rather deprived and you can get 3 bed houses for 39ishk. Also there are nicer houses here that are more expensive, but if I got a mortgage I would probably move to my nearest city, just because I may as well be in a better area for the money.

So, what do you want to do?

Pixie5740

What is the area with the £39k houses like? Is it somewhere you would be happy living? You can change just about anything you want to with a property except for location, it's the one thing you're stuck with. So it's important you buy a property somewhere you like.

Also think about what the neighbours are like. Are many of the properties owner occupier or rented. In other words are you likely to have the same neighbours for years or are they likely to keep changing. If you're looking at semi-detached or terraced properties then will you be relying on a landlord to fix adjoining walls etc that might impact your property.

thisisnotthetruth

Think it is going to have to be mortgage if I can hold out. I need a detached house, my noisy neighbors are driving me crazy(hence the urgency to buy a property.)

I am also sick of the area I live in now which is another push. Just really don't like the idea of having to keep up with monthly repayments. Anyhow... still a couple of years before this plan can be set into motion because I haven't graduated uni and got a stable job yet.

Kynthia

Would you be happy in the £30k and the area it's in? Will the property meet your deeds for the next 5+ years. Will it sell when you want to sell it?

Would you be happy in the £150k+ house and the area its in? Do you need to spend that much to get what you want? Will a mortgage company lend you £120k at a good rate and can you afford the repayments now and in the future as far as you know. Does the property meet your needs for the next 5+ years, or does it exceed them to the extent that you should buy something cheaper and save money?

We can't answer these questions, only you can.

silvercar

thisisnotthetruth wrote: »

Is it better to buy a cheap, £30,000 house outright or get a mortgage for a £150,000+ house. I don't like the idea of being in debt but worry a cheaper house would be an awful place to live.

Other things being equal (which they are clearly not) if both properties are going to be subject to say 50% growth over 10 years then the cheap property will be worth 60k, the more expensive one 300k. Off that 300k take the mortgage of 120k and take interest only mortgage payments of say 5% for 10 yrs would be 60k, so you are left with 300-120-60=120k So you end up with twice as much equity and you've lived in a better area/bigger property for the last 10 years.

LplateSaver

You're very lucky that you have the option of a 30k house. That is a lot less than houses here, unbelievable really. Anyway mortgage interests rates arent high at the minute so a mortgage wouldn't be that expensive, or you could buy the 30k property and save up to move but that would take longer.

thisisnotthetruth

Thanks guys. You've been really helpful. I feel more informed now.