Getting rid of a London-sized Mortgage

NorthernPeach

Can totally relate, I'm off for an interview tomorrow but I'm not sure whether I want to make the decision to leave or not if I get offered the job :rotfl:

Runders

Hey Tropically,

Glad you had a wonderful break. I'm often in Norway, Denmark etc. and the prices there are eye watering too! I once ordered a Gin and Tonic and then got the bill of £15 - ouch!

That is so annoying you haven't heard anything about the job yet, can you chase them up at all?

I've literally just put my application in for a new role this morning, It would be a change to what I do now, but still in the Env sector. Like you and Northern Peach, I'd be terrified if I was offered it, but I guess sometimes in life we have to just make a leap. Remind me I said this when I am dilly dathering around any job offers in the future

gallygirl

Tropically wrote: »

The hardest part of the MFW journey is realising just how long it is, and how much consistency you need to put in.

I once remarked to someone that I was thinking of doing an OU degree, but six years was a long time. He replied 'yes, six years IS a long time - it's going to pass anyway, you might as well have something to show for it'. That stuck with me, I did the OU degree then applied the same to paying off the mortgage (except in reverse - I wanted to have NOTHING to show for it ).

Tropically wrote: »

Thank you Northern Peach! I don't know what I want to do, I'll be so terrified if they offer it to me! The most straightforward would be if they don't. Then I could grumble about it, without having had to make any scary decisions on my own.

That made me laugh, sorry :rotfl:. Be careful what you wish for .

Tropically

Well they offered me the job and I've accepted so in September I will be moving abroad. How is that for a spanner in the MFW works. The salary, when taking into account the difference in currency and cost of living, is slightly more than my partner makes now. So um. I think this is happening?

chelseablue

Congratulations! Is your partner moving abroad with you?

Tropically

Yes, he is! I don't need a visa but he does, so he could have a couple of months in between jobs. We are trying to work it to maximum income, but in any case my new salary would be higher than his here (and also income tax free). I think it's going to work out well. The Cayman Islands has very high VAT on everything and high import costs, but it doesn't have any income tax.

Being the frugal MFW that we are, I think we could work it quite well. On just my salary, we are down about £800/month so every month before he gets a job we are slightly worse off. He is quite employable and still going through a weird time at his current employer.

NorthernPeach

Congratulations on the job offer! :beer:It sounds very exciting!

Where does this leave you on your quest for mortgage freedom, will you be looking to sell up or keeping the house on as security and renting it out?

mfmaybe

Congrats on the job. I lived there for a bit as did another family member, and still have contacts there. It's a very very expensive place to live though - don't underestimate the cost of your electricity (with A/C, bills can be huge) never mind the food bill, rent, water bill etc. Cars can be quite expensive to buy but you don't spend much on fuel. Some things are cheap (childcare is cheaper than the UK but that doesn't help you!) but not much. I did ok but I rented out my spare room; I don't think I'd have wanted to support 2 of us.

Tropically

Northern Peach, I think we will keep the London house and rent it out. In retrospect, it probably wasn't a smart move to buy it, if I think this was on the cards.

For the house, we spent:
£200 on a house sale we pulled out of
£300 for surveys on new house
£250 on movers
£26 on certified things
£770 on HomeBuyers survey
£120 on mail redirection
£1,113.55 conveyance
£11,250 stamp duty
£13,785.10 new kitchen
£180 x 2 house insurance
£130 to remove waste from previous people
£560 on boiler repairs
£155 on new cupboards

So, £29,019.65 on this house since we started. I don’t seem to have recorded the little things like paint, and some big things like furniture. I think we probably spent another £2000 on furniture which would bring the total up to £31,019.65.

For renting:
We were paying £1300 in rent before, and we had to pay our pound of flesh to the estate agent each year, usually £200-ish. I don’t know if we would have stayed in our 1-bed flat had we not bought – I think so, but I really disliked the estate agent that was running the house and the landlord didn’t want to go straight to us, despite living 2 streets over, because they thought that the relationship with the estate agent was one they wanted to maintain. They also were trying to raise our rent, but I later saw that they reduced the rental asking price.

£1300 x 24 months + £200 x 2 = £31,600

In short, if we had continued to rent we would have paid £31,600 but we outlaid £31,019.65 in the first two years of owning the house. That makes me feel a bit better about moving. If we hadn’t bought the house, we wouldn’t have had a second bedroom to rent on Airbnb or with a lodger. Our total rent since we bought the house is £5,778.96.

We've overpaid by £7001, and have gained £26,572 in equity (not including any house price gain - I don't think there is any).

So even if we move now, we will be better off than if we were renting during that time. We will have spent a net £5,669.69 to live in this house for two years.

For the economists out there, I haven't factored in any opportunity costs, nor the change between having cash versus a non-liquid asset and a giant debt.

Future Plans

We will rent out the house, and I have devised a flow chart for how we will approach finances in the future. We don't currently have any credit card debt but we might by the time we move.

Moneyfordreams

good luck with your future plans, so exciting