To buy or not to buy, that is the question!

Thrugelmir

finnad wrote: »

I have just inherited £60,000 and im usnsure whether to pay off the remainder of the mortgage and save for a new deposit and rent this property out, or to just sell the property and buy the family home we have always wanted.

Why not just the mortgage off. Then take your time in deciding what to do next. Personally I would use the freed up money in various ways. Enjoy life, along with both short and long term savings. Then it's the best of all worlds.

Humphrey2012

I'm sure the OP has discussed it with his wife too!!

My view would be to get the lovely family home, but as said above, paying off your current mortgage and enjoying some of the money, perhaps starting some savings still puts you in a great position to get that family home when you are ready. I personally wouldn't go down the renting route.

JimmyTheWig

Thrugelmir wrote: »

Why not just [pay] the mortgage off.

My only concern is what the deal is, in terms of income tax, with doing this and letting it out later.
I've never quite made sense of the rules as to what loans you can offset the interest from and what loans you can't.

Thrugelmir

JimmyTheWig wrote: »

My only concern is what the deal is, in terms of income tax, with doing this and letting it out later.

As most peoples largest single asset is their home. Buying another merely exposes their portfolio to a single market. Diversification is an important factor in any portfolio. I'd put access to instant cash and a well funded pension. Before leveraging up with another property.

JimmyTheWig

Thrugelmir wrote: »

As most peoples largest single asset is their home. Buying another merely exposes their portfolio to a single market. Diversification is an important factor in any portfolio. I'd put access to instant cash and a well funded pension. Before leveraging up with another property.

I agree. It's a somewhat risky strategy.

However the OP has suggested that they want to do this. It would be a shame to lose a significant tax break if they do go down that route.