Buying a house without a mortgage

Prudent

I've found this thread really interesting. I have done the pay off the mortgage in two years bit and am now saving to buy house two outright.

I bought my house 5 years ago today after a marital breakdown. At that time I was lucky enough that the housing in my area was reasonably cheap. I paid £68,500 for a three bed semi in a nice area, although it did need a fair bit of work. I worked extra hours delivering staff training and got my total outgoing down to £850 a month. I am a single parent and have one child to support. I am on fairly average earnings. Although I paid all but £100 off I had to keep that amount in the mortgage or pay redemption penalties. I am a very happy bunny today as I am now officially mortgage free

The frugal ways stuck and we live very well on £850 a month. The savings have snowballed since and I am now thinking of buying house two. I have moved jobs and the commute is really too long. I would like to keep this house because the values here continually climbing and its rental potential is good. If a local job came up I would move back as I have great neighbours and friends here.

So now I am deciding whether to save for another few years and buy house two outright or take a mortgages with a view to repaying it.

PasturesNew

nykmedia wrote: »

Save £1000 a month??? I don't even EARN £1,000 a month :laugh:

Me neither... there are some rich bugg4hs here

painted_lady

It depends on where you are thinking of buying and how the market will grow. The house a few doors from us came up for sale, we worked out the monthly mortgage payments will be around £900 a month, just over 3 times what we pay (although we bought 8 years ago). If you could save £900 a month, then I guess in the long term you will save interest, in fact earn it on your savings, so its possibly achievable, so long as you could afford it as well as your rent.
Obviously, you would need to safely invest the money you save to get the best possible return on it, without risking it. Dont know much about doing this off the top of my head though.

Frugaldom

Prudent, I'd hang off until you could buy outright. I can't see any point in having a mortgage if you don't need one and if you let out the first one just to pay the second one and then the mortgage rates jumped to 10+% (it isn't impossible) then you'd be kicking yourself. I read on the NSI site that we're allowed to have £90,000 invested in tax free savings, it could be more than that now. I worked out that the interest alone off that (once I have it) would pay my rent until I found a house to buy

Frugaldom

Just adding a little update here that may be of interest to anyone who may consider following the same route as I'm proposing - saving and buying a house for cash.

As you'll probably have gathered, by now, I am NOT a fan of all the mass publicity time/space/money devoted to highlighting the 'UK average house price' shenanigans, so I am constantly scouring the Internet for UK property bargains so I know exactly what I'm aiming for in the long run. I'm self employed and also take on part time jobs to supplement my income. This allows me to make full use of my ISA allowance, which is instant access with monthly interest payments, so I always know by how much it's increasing. It's not a lot at the moment, as I'm only onto ISA year 3, but my 2008 challenge should see that I succeed in filling it, even allowing for the 20% increase in allowance.

Anyway, I'm just about to complete the Cyberdosh 2007 Challenge, which was to live off £4,000 for the year (excluding rent & council tax) and I am extremely confident of success. I've also been searching the property sites and my findings are a total REVELATION!! There are literally hundreds and hundreds of properties available for under £50,000. In fact, I even found a little flat for £10,000!! I am now one happy chappie knowing there are so many bargain buys available if you are prepared to relocate. Working from home and basing myself online, this looks completely feasible to me. So... watch this space, because I'm aiming to buy a property as soon as I have completed my 2008 Cyberdosh Challenge whilst repeating my 2007 spending performance.

I'd love to hear from anyone else who would like to compare notes and try this

Came back to edit this after re-reading it. I am NOT intending to buy a house as soon as 2008 ends, I'm planning on buying a house as soon as I have saved enough from whatever surplus funds I have from setting up a 'cottage industry', which is my 2008 Cyberdosh Challenge. LOL Still, it would be great to think I could do it after only one year... I do still have a few Premium Bonds LOL

setmefree2

Keep us posted & Good Luck:money:

eldowardo

nykmedia wrote: »

Working from home and basing myself online, this looks completely feasible to me. So... watch this space, because I'm aiming to buy a property as soon as I have completed my 2008 Cyberdosh Challenge whilst repeating my 2007 spending performance.

Please make sure any property you purchase has access to internet. The house I bought, when I asked for broadband when I moved in they said I lived too far from the exchange. It was only when I got a telelphone line they suddenly decided I could get it, but the prospect of no internet was quite a shock cos you find when you dont have it how much use it is.

So make sure you go to bt.com and search any postcode you attempt to buy to check that one, otherwise dial-up is a very slow method of internet these days!

Frugaldom

eldowardo wrote: »

Please make sure any property you purchase has access to internet. The house I bought, when I asked for broadband when I moved in they said I lived too far from the exchange.

I only got a broadband upgrade in 2007 and where I live right now still has no digital signal. That means, there's no freeview and, when they disconnect the analogue signal next year, NO TV!!! :rotfl:

There will be a huge hiccup during the process, there's bound to be! From what I can gather, they are planning on switching off the analogue signal at the same time they introduce digital here!! How on earth can anyone find out if they can pic up a digital signal when there isn't one?

ATTENTION SKY!
If I owned Sky (oh, if only..), I'd be out canvassing door to door in this area right now to make sure all us 'skin flints', I mean MSE fans, have no loss of television service by offering incredible deals on your TV/telephone/broadband packages. With or without telephone exchange upgrades, there's always satellite broadband

Frugaldom

I thought since regular, average house prices were so high that I'd look at 'alternatives' and it's surprising how wide the choice really is! For example, does anyone live in a log cabin? These residential models look really nice for the price!! Now, has anyone got a really big back garden and a driveway big enough for an artic with an extra wide load? LOL

Toto

Well, I'm up for a buying without a mortgage note compare buddy.

I had a target for savings and I'll just scrape that by the end of the year. As we had a big family holiday, got married and are flying off to Canada next week to spend christmas with hubby's family I'm pretty proud of that. So, I'm going to double the target for 2008 because we aren't going away, aren't having a wedding and don't need anything.

I've done the budget for next year and have allowed a tight but workable monthly budget. So, every other penny will go into savings. Theoretically we would then be able to buy outright if we moved area, but my daughter is in a school for children with severe learning difficulties so moving isn't really an option. So, unless we win the lottery we don't do, I can't see it being next year... The joys of living in Hertfordshire!

It'll be a tough year, so I'll kick your @rse if you'll kick mine:rotfl: