bigger house V mortgage free?

A_Nice_Englishman

money-savvy-suzy wrote: »

Maybe I will be able to join the MFW club - can't do this just yet as I'm tied into a deal until next year. After that I definately want to start overpaying : )

Make a start now by saving the money you would have overpaid into a cash ISA. You will get used to spending less and be able to pay a lump sum off the mortgage as soon as the deal you're tied into allows.

money-savvy-suzy

A_Nice_Englishman wrote: »

Make a start now by saving the money you would have overpaid into a cash ISA. You will get used to spending less and be able to pay a lump sum off the mortgage as soon as the deal you're tied into allows.

Thanks I think I will start doing that. I'm not very clued up when it comes to mortgage deals (which is probably why I ended up with a really bad one). Can you get mortgages where you can put in extra amounts when you've got some spare and does this affect the rate?

bunking_off

silvercar wrote: »

We reached the point where we could pay off the mortgage and decided to move to a bigger house.

That's my line of thought as well. We should have our mortgage paid off in a couple of years.

Plan was always to pay off the mortgage ASAP, then concentrate on putting money away to augment my pension / allow me to retire early...put what I'd been paying towards the mortgage into investments. But now, the thought of a house with bigger gardens is sorely tempting...£100k moves you into a different league around here.

I'm going to wait until the mortgage is gone, then decide what to do. At least that way I'll have the euphoria day of not owing anything. Of course, if house prices continue the upward trend over the next couple of years, that'll mean I get less for my extra £100k. But I don't think the previous leaps in house prices will occur in the short term.

One way to justify getting a bigger place rather than saving is to say that the extra money borrowed is an investment in property, and that if I downsize to something the size of what we already have (either at retirement or due to unforeseen things like job loss), I can recoup that investment - obviously the implies that house prices rise at more than the cost of the investment aka interest rates...far from clear in the short term but probably realistic over 20 years; it also ignores the "emotional investment" there might be in the bigger place.

I'm undecided. I'm hoping the answer's clearer in a couple of years...

A_Nice_Englishman

money-savvy-suzy wrote: »

Thanks I think I will start doing that. I'm not very clued up when it comes to mortgage deals (which is probably why I ended up with a really bad one). Can you get mortgages where you can put in extra amounts when you've got some spare and does this affect the rate?

Yes you can. That's what I used to do.

I'm not up to date with the mortgage market now but the usual advice people give in this forum is to see an independent mortage adviser who will be able understand your requirements and recommend the best mortgage for you.

money-savvy-suzy

Yippeee! I'm now on my way to becoming mortage free!

The advice given by several people on this thread is to try and pay off as much of my mortgage as possible and then if I still feel pulled to move to a bigger house then at least I'll have more equity to re-invest.

I don't know why I didn't think of this before because it seems so obvious now! I guess I was looking at it as either doing one or the other. For the short term anyway I've decided to concentrate on trying to get this mortgage paid asap.

After reading through previous posts, I've got myself a mortgage pig and opened an online savings account so that I can build up an amount to use to reduce the mortgage when my current deal runs out. I am currently selling a load of old stuff on ebay so I'm going to put the proceeds straight into my mortgage account. I'm also going to do a car boot on Sunday to get rid of the stuff I can't really sell on ebay - small steps, but every bit helps.

I've done a signature so that it will spur me on to save as much as possible. Thanks for all the advice, it has really given me the push I needed :beer:

Cazzdevil

Excellent to hear that Suzy

Sadly we won't be able to join the MFW club just yet, we're saving up for a new car and have a couple of niggly debts to clear first, but hopefully we'll be joining up in the new year :T If I can stick with the plan I'll be mortgage free at 35

~daisy~_2

money-savvy-suzy wrote: »

I've been a lurker for a while and I have always loved the idea of being mortgage free. However I have been putting off doing anything about it because I feel in my head that I should be moving to a bigger better house. I have a nice 2 bed house with a £70k mortgage and feel extremely lucky to have bought at the right time, but I'm in 2 minds about whether I should be trying to climb the property ladder or staying put and paying off my mortgage earlier (currently has 18 years left to run).

On the plus side my small 2 bed house is really lovely and just the right size for us and I know that moving would mean a substantial bigger mortgage with no chance of paying it off early.

Does anyone else feel in a bit of a dilema about this?

hub and i have exactly the same discussion frequently !! i could have written the post myself but we have now committed ourselves to getting rid of the mortgage so we can buy abroad and if that means we have to stay in our perfectly adequate and nicely done 3bedroomed home then so be it !!

it makes it a little harder when family and friends all have bigger and flashier homes - i know it shouldnt matter but when ppl have some idea of our financial status and hubs work situation you feel you should have the home to match the car and the job - does that make sense ??

great to hear you have come to a decision and lets make a vow to sop reading the property pages each week !!!

money-savvy-suzy

Hi Daisy,

I know exactly what you mean about the perception of what you should have because of your job. I have quite a decent paid job and am studying as well, so hopefully will be earning a lot more money in a couple of years. I think you percive it as a status symbol and a reflection of how well you have done for yourself.

But the thing I'm thinking now is rather than slog my guts out until I retire in order to feed a huge mortgage, I can now slog my guts out for a few years until the mortgage has been paid, and then go and 'live off the fat of the land'.

~daisy~_2

when discussing this with my cousin recently he said but everyone always has a huge mortgage till they die then it gets paid off and i just thought no no your so wrong but i guess its just horses for courses - he has a huge big house with a horrendous and nightmare inducing (for me) mortgage and it will never ever be paid off

Alion

We're overpaying on our £200k mortgage so that we'll have more equity etc when we want to move to a bigger property in the future, meaning we will have more equity, more likely to be able to get what we want, more able to afford it. I see it as a sort of saving up for when we really need the cash!

I think you can still be a MFW, even if your ultimate aim is to take on a bigger mortgage...it's all in the attitude