Should we stay mortgage free or should we take on a mortgage?

ellie27

How bad are the schools were you are now? As you did say possibly move to an area which is more child friendly/safe/better schools - that would be more important to me than being mortgage free.

We moved recently into an area for better schools but that was just before my youngest started school.

needhouseadvice

scorpio73 wrote: »

We own our 3 bed end of terrace house in NW London (zone 4) outright. It's probably currently worth over £500K. We are quite happy here, a suburban area with fast links to central London but we have been thinking of moving to a more child friendly safe area (2 young kids), good schools, 3-4 beds and with maybe a nice high street, something we don't have here. It should be a tolerant cosmopolitan area as that's what we are used to here in London. It needs to be commutable to London, ideally Waterloo, max 1 hour journey.

It has been great to be mortgage free. It has enabled us to have my wife stay at home with the kids most of the time although she has worked part time for some periods. I am wondering what you would do in my shoes:

1. sell our house and try to buy a house for £500K without a mortgage. This would likely limit our options considering our above stated criteria.
2. sell our house and take a mortgage on my salary only. I think I could get £150K so a total of £650K. Would this addition make a such a big difference? It would also mean that we would stretch ourselves a bit financially as I am currently the only breadwinner.
3. wait until my wife find a job when my youngest child go full time school in Sep. She might not find a suitable job immediately and even if she manages it might take few months for the banks to accept her income but her experience and field should make an employment likely. My guess is that once she find a job we might be able to get a join mortgage of ca £300K, so would have a total budget of max £800K.
4. stay where we are until oldest child finishes her primary school in 4 years time by which time we also should know how much damage Mr Trump has done to the world economy and the world in general. Also the effects of Brexit on the economy makes me think that maybe we should be cautious. It just feels that it's very unstable worldwide which makes me think maybe not the best time to take on a mortgage?

Thanks in advance.

You're mortgage free and happy where you are. I'd stay. As you say, things are so unstable now. Why take on more debt when the economy is tanking?

Thrugelmir

I'd stay mortgage free if at all possible. Interest rates aren't going to remain this low forever. The future direction of UK interest rates is dependent on matters outside the remit of Mr Trump. More the charity of strangers to keep lending us the money........

scorpio73

Thanks.

Elie27 - the primary schools are very good but the secondary are no good. So potentially we could wait until our oldest child completes her primary i 4 years time before moving.

Carefullycauseous& Needhouseadvise & Thrugelmir- yes we are quite happy where we are although we have seen some signs that the area is changing for the worst. It's still ok but we would have to see how it develops. As mentioned, being mortgage free has been a life saver and the current situation in the UK, and in the world in general, is unstable so maybe not the best time to take on more debt.

needhouseadvice

scorpio73 wrote: »

Thanks.

Elie27 - the primary schools are very good but the secondary are no good. So potentially we could wait until our oldest child completes her primary i 4 years time before moving.

Carefullycauseous& Needhouseadvise & Thrugelmir- yes we are quite happy where we are although we have seen some signs that the area is changing for the worst. It's still ok but we would have to see how it develops. As mentioned, being mortgage free has been a life saver and the current situation in the UK, and in the world in general, is unstable so maybe not the best time to take on more debt.

I actually grew up around the Sutton area and I would say I feel much safer walking around London than suburbia but obviously I don't know what your area is like! I've just bought my first flat just before the sh*t hit the fan with Trump etc and am so wishing I hadn't. It's horrible to feel like your finances are directly linked to what's happening in the world.

What if you take on a bigger mortgage and prices drop? For peace of mind, I would veer on the side of caution.

scorpio73

You never know. Maybe it will be the best decision you have made to buy your flat now. Nobody knows what the future holds.

I will think about it very carefully and probably wait until my wife is back in work.

greggymagic

needhouseadvice wrote: »

I actually grew up around the Sutton area and I would say I feel much safer walking around London than suburbia but obviously I don't know what your area is like! I've just bought my first flat just before the sh*t hit the fan with Trump etc and am so wishing I hadn't. It's horrible to feel like your finances are directly linked to what's happening in the world.

What if you take on a bigger mortgage and prices drop? For peace of mind, I would veer on the side of caution.

Try not to worry - I bought my first flat in 2004 and I remember everyone saying that it was overpriced and interest rates were going to rocket and prices were going to crash and I felt worried afterwards - It's a natural feeling to feel worried after a big purchase but hey - you've got a flat and you're on the ladder. Good luck

As for the OP - it's a complex decision based on age/salary/future prospects etc

AdrianC

amateur_house wrote: »

ReadingTim wrote:

Of course it is! The OP will be "tolerant" of everyone who shares the same views, interests, socio-economic background as he does, whilst "cosmopolitan" refers to a desire for a wide range of ethic restaurants and delicatessens. Whilst triumphing diversity, he doesn't want to live anywhere too diverse, as that will contain people who are uncomfortably poorer, more foreign and generally different to him.

Ideally, he wants to move to an Enid Blyton novel.

I don't think we can assume that much about the OP from a single post. I would like to live in a nice safe area, yet I read the Daily Mail instead of the Guardian, and grew up on a council estate often referred to as one of the most deprived in the UK. I would consider myself to be tolerant of those who are poorer than me.

<double-take> ReadingTim seems to be describing the Daily Mail world view to a tee.