compromise to have no mortgage

tiger135

i am single looking to buy and have almost enough for a one bed flat without needing a mortgage.
ideally in the future i would want a two bed. it is appealing to not have to get a mortgage though and then keep saving say 1k a month and in 5 years move again to a two bed.
any thoughts on this? i find it hard work and time consuming contemplating having a mortgage again.

ThisIsWeird

If you can buy mortgage free, then do so.

Easier, and it'll be savings all round.

You can join us saddos with mortgages at any time. Or, you can use a small mortgage to release equity - new car? Renovations?

Being a cash buyer could also help you get a better deal on a property, or help make you the preferred buyer if it's a popular place.

I'm not aware of any downsides.

bouicca21

A one bed will be harder to sell than a 2 bed.  Surely the price difference isn’t that great so you wouldn’t be looking at a huge mortgage, and if you have a spare £1k a month it wouldn’t be difficult to pay it off.  

Mind you, I’m prejudiced - there is no way I could be comfortable in such a small space.  I’m far too messy. 

housebuyer143

I don't think it's worth buying the 1 bed just because you will be mortgage free, especially if you know you will need to move soon. 
Moving is expensive and it's likely to exceed any saving on you not having a mortgage for a short time.

UnderOffer

It’s so expensive to buy and move, stamp duty, solicitor fees, moving costs etc., I’d save longer and go for 2 bed or take out small mortgage so you have a longer term home. 

stuhse

My observations  would be as the others: the costs of buying/selling / moving/stamp duty  are prohibitive.  Take out a mortgage which clearly isnt going to be that large and buy the 2 bed straight off. Make sure its one you can repay early, and once in and settled focus on maximising those repayments to clear the mortgage.  You are in a strong buying position and the market i believe is currently slow...so to your advantage.

lookstraightahead

bouicca21 said:

A one bed will be harder to sell than a 2 bed.  Surely the price difference isn’t that great so you wouldn’t be looking at a huge mortgage, and if you have a spare £1k a month it wouldn’t be difficult to pay it off.  

Mind you, I’m prejudiced - there is no way I could be comfortable in such a small space.  I’m far too messy. 

I lived in a beautiful flat which was two bed but the ground floor of a Victorian 'mansion'. It was huge and much bigger than most new houses.

lookstraightahead

Personally I would save a bit more now then buy a two bed with a small / no mortgage.
it's great not having a mortgage and being held hostage to the bank. It really is your property then. And if you already have had a mortgage then yes I see why you don't want one. 

MFWannabe

How long would it take you to save for a 2 bed without having to have a mortgage? 

What’s the price difference between 1 bed and two in your area? 

Factor in the costs of moving and it should help you decide if getting a mortgage is worth it; I assume it would be quite a small mortgage if you have almost enough to buy a 1 bed 

ThisIsWeird

Have to 'fess that I misunderstood what Tiger was asking. I'd read it as a choice between putting all their money into buying with no mortgage, and taking out a smallish mortgage so's to have some funds available. With current interest rates being quite high, I'd suggest the former - ultimately less money 'lost'.

But if having a 2-bed flat at this stage is quite an attractive bonus, then it complicates matters, and I guess it comes down to how much Tiger wants a 2-bed at this point?

In general, tho', 2-bed all the way - just sooo much better when having guests, a separate study, everything.

Jude57

I agree with everyone saying they'd prefer a two bed with a small mortgage, especially if you're planning to move in just a few years. The extra bedroom will be handy to use as an office, for when friends or family visit and, if you should need it, could generate income from a lodger - with the permission of your mortgage lender of course.

Why not speak to an independent financial adviser to look at short-term mortgages if you're keen to be mortgage free as soon as possible? If you're able to pay it down without penalty (or minimal penalty) surely that's worth looking into?