HOW TO TRAVEL WITH A MORTGAGE

AKM96

Hi everyone.

looking for some wisdom please.

Myself and my partner want to buy our first home in 2 years. We are currently renting at the moment. 

We will be buying in London so with a £60 - 70, 000 deposit we are probably looking at interest repayments of £1800 ish / month on a £375,000 property. 

For context, combined our salaries are about 90k.

Although we will be in a good position to buy in a couple of years. We really want to take at least 3-5 months out to go travelling.

We both have careers that will allow us to take time out with a guaranteed job upon return. 

Should I try to do this travelling before or after I buy a home?

If I do it BEFORE:

• I don’t understand if this would affect my ability to loan as would it count as a career break as I wouldn’t have a salary but would technically still be employed?

If I do it AFTER:

• how on earth will I afford to save enough money to cover mortgage payments while we are away travelling? What are the options? Is it realistic to pause mortgage payments for that amount of time or potentially front load payments to cover that period?

We could consider renting out our property while we are away. But as we are not going away for a huge amount of time and I know you have to get special licences etc to become a landlord so not sure if it’s worth it?

any help would be much appreciated as I’m currently stuck in the “you’re young you should travel while you can” dilllemma vs “I need to start saving for the future”…

MultiFuelBurner

Crystal ball says house prices will have risen in the two years you wait to buy (not least basing that on the 2007/2008 period)

Have you factored in that may only buy you something worth £300,000 now. It's worth putting that in the melting pot.

Again just my opinion some may say house prices will stagnate and some will say they will fall.

Is there anything stopping you buying now and enjoying your travels or is it the council tax and running costs that will not be nice whilst you travel?

AKM96

MultiFuelBurner said:

Crystal ball says house prices will have risen in the two years you wait to buy (not least basing that on the 2007/2008 period)

Have you factored in that may only buy you something worth £300,000 now. It's worth putting that in the melting pot.

Again just my opinion some may say house prices will stagnate and some will say they will fall.

Is there anything stopping you buying now and enjoying your travels or is it the council tax and running costs that will not be nice whilst you travel?

Thank you! We don’t have enough for a deposit yet sadly, we will have the amount I’ve quoted in 2 years time if we stick to our plan

400ixl

Once you have a mortgage, the provider will not care if you go and do some travelling as long as you are still making the monthly payments, they won't be any the wiser. Front loading to then pause payments would probably cause more of a headache that just putting the money into a savings account and then just using it to keep up the monthly payments as normal.You insurer may have a different view if the property is to be empty for more than 30 consecutive days, so you will need to find a travel friendly insurer for that period.

If you travel before and are back in employment then there shouldn't be an issue, you may just be assessed as if you are starting a new job at worst. You would just need to be able to explain the income / outgoing change in spending pattern for that period.

DullGreyGuy

AKM96 said:

• how on earth will I afford to save enough money to cover mortgage payments while we are away travelling? What are the options? Is it realistic to pause mortgage payments for that amount of time or potentially front load payments to cover that period?

We could consider renting out our property while we are away. But as we are not going away for a huge amount of time and I know you have to get special licences etc to become a landlord so not sure if it’s worth it?

Same way as you'll have managed to save up the deposit?

You can't pause a mortgage to go travelling 5 months and as you say its a fairly short time for any option of renting it out (plus you risk returning to a tenant that's refusing to leave). 

We've done it firstly by virtue that I can work remotely so dont actually need to stop earning and secondly we've been to countries which are very cheap and so actually even with an empty flat with a mortgage to pay the cost of rent, food, drinks etc is less that what we'd ordinarily be spending in London - a night out drops from £50-£75 to £5-£10 its easy to offset the £200 monthly rent 

SDLT_Geek

If you were to be overseas for over six months in the 12 months before completing a purchase in England, you might fall foul of the extra 2% stamp duty land tax for non UK residents on the purchase price.

theartfullodger

Talk to mortgage brokers see what they say.

But whatever lender's rules are today will not be the same when you will be wanting a mortgage.

Why would your employers agree - or indeed not sack you when away?

So crystal ball gazing.  Not much crystal, an awful lot of b*lls.

SiliconChip

theartfullodger said:

Why would your employers agree - or indeed not sack you when away?

The OP says "We both have careers that will allow us to take time out with a guaranteed job upon return. ", although it's not clear whether that's the same job or an easily-obtained new one.

I did option 2, but it was after I'd been on the property ladder for over 20 years, my mortgage was small by then, and I had a lot of money saved up so that I was able to travel and pay all the bills at home for 4 months. I also needed some extra cash on my return as although I had attempted to drain down everything before I went away for the winter some water was left inside the electric shower that froze and damaged it so I had to buy a new one.

Tinkertonian

We bought our first house in 2004. In 2010 we went travelling for a year, which was something we really wanted to do before we started a family. Our situation was a little different to yours I guess, as we already had the house, and with it being a whole year away we were able to rent it out. However, one relevant aspect of our experience is that we took a mortgage holiday so it didn’t actually cost us anything- in fact the rent we made partly funded the trip. Not sure if this is still possible but it is worth considering if you want to do the house first/travel later option. 

AFF8879

AKM96 said:

If I do it BEFORE:

• I don’t understand if this would affect my ability to loan as would it count as a career break as I wouldn’t have a salary but would technically still be employed?

Why would your lender care what you did before you took out the mortgage? 

The only hiccup I can think of might be not having 3 months worth of payslips when applying, but presumably you’re not going to submit an application the day you return from travelling and would need time to settle back into your job, find a property/get an offer accepted etc first 

ciderboy2009

One problem you will need to consider if you buy before travelling is the insurance on the house - most (if not all) insurers will not allow you to leave the house empty for more than 30 days.