Mortgage now or later?

Sapindus

This may seem a really dumb question.  My total cash assets are £265k.  I've made an offer on a 3 bed semi for £182k.  Obviously there are costs of moving house, keeping an emergency fund etc.  Currently in rented.

The new house needs most urgently a new driveway, but apart from that it looks clean and tidy just dated.  I'd like a big shed, new bathroom, kitchen, carpets, living room fire etc, nothing high end. Haven't had a survey yet, but didn't see any red flags looking round (it's empty).

I'm almost automatically thinking about a small mortgage after looking at several houses where I'd definitely need one, and now I'm questioning whether I should do that now as I move house, or wait until later and do it as a "remortgage" once I've spent as much cash as I'm comfortable with? Are there are any pros and cons either way?

pramsay13

As soon as you take out the mortgage you will be paying interest on the money you borrow so if you have enough money just use that as long as you keep enough for emergencies then use cash for the rest. 
Being a cash buyer will benefit you in the buying process as well as you can move a lot faster. 

Sapindus

But putting the numbers into the Mortgage Best Buy tool, it seems interest rates are lower for homemovers than remortgages?  

Mark_d

If your 265k is in cash then I'd suggest using it to buy the property.  You should be able to negotiate a lower price being a cash buyer. And the return on your investment will likely be better than any interest you'd gain by keeping the cash and taking a mortgage.

Personally we took a mortgage when buying our current place.  I believe the return on my investment portfolio exceeds any mortgage interest.  When we've needed to spend on new carpets, furniture etc. we've taken interest-free credit from the retailers.

When we get nearer to retirement we'll pay off the mortgage, so there is less exposure to movements in the economy/interest rates.

Sapindus

I've come round to not getting a mortgage.  I began to think of it like - if that was a house I was thinking of renting (oddly enough it has until recently been rented out), I would be thinking "that's fine, I can live with that for 6 months."  So if I take a while to start spending loads of money on it, you're right, I'd be paying interest on money I didn't yet need.  And I think interest rates are going to drop a bit in the next year so I could end up paying the same rate on a remortgage as I would if I took out a mortgage on purchase.