How to be mortgage free after 8 years

Thefunkygibbons · 6 January 2006 at 3:19PM

Apparently too many think about what the Jones think

My last pair of jeans came from Cheshire Oaks and cost £9

Not a brand name but I don't care, but clearly a lot of people do care otherwise Levis would be out of business

tony1959 · 6 January 2006 at 3:43PM

Hi TFG,

Haven't you visited Asda jeans as low as £4 for us chaps!!

Interest-Ed · 6 January 2006 at 7:41PM

What an entertaining thread - running since September last year!

I'm going to read tfg's original post with interest. Thanks.

Rave · 7 January 2006 at 5:33AM

Thefunkygibbons wrote:

Just kidding, in reality I expect to sell the house and split the money between us and the kids so that they can get a start on the housing slippery ladder

How old are your kids TFG? Personally if I were you, rather than rely on the equity in your own house to help them, I'd try and call the bottom of the forthcoming house price crash and just buy them all flats/houses on the cheap. If you rent them out until they leave home (or leave university etc.), and top up the mortgages with your own salary (which may increase, even?), you could be in a position to simply give them a house as and when they need it.

Buy-to-let is a quite shockingly poor investment at the moment of course- but its time will come again. The housing market is always cyclical; although I would rather that house prices remained at a constant, affordable level, I doubt it's ever going to happen. Of course, calling the bottom of a bear market is difficult- but if you buy at the point when a market rental income would cover the payments on a 20yr repayment mortgage with enough left over to cover maintenance etc. then I think the odds are that you'll do alright:).

Whether a Chartered Accountant should be taking advice from an unemployed bloke who rents his flat is debatable- but once I've got a job I plan to save hard and attempt to call the bottom of the market- if I have kids by then I'll be buying property for them too:).

lisa_shaun · 7 January 2006 at 1:09PM

i have just taken my morgage out and at the moment i an unemployed my father went garentor, so i took out an interest paying morgage at 6.7% interest and got a £1800 cash back, well now i have been offered a job of which i am considering taken but know it would be very silly to keep this type of morgage on as there is obviously nothing coming off the balance, if anyone could advise me, the morgage advisor said if i wanted to change this i would have to repay the the cash back and i would get a lower interest rate 4.7% i think he says, also i was left £13.000 from my grandad and am curious should i put some of this monjey into the the morgage to reduce my monthly payment or invest it?

kinster_2 · 7 January 2006 at 2:38PM

Rave wrote:

How old are your kids TFG? Personally if I were you, rather than rely on the equity in your own house to help them, I'd try and call the bottom of the forthcoming house price crash and just buy them all flats/houses on the cheap. If you rent them out until they leave home (or leave university etc.), and top up the mortgages with your own salary (which may increase, even?), you could be in a position to simply give them a house as and when they need it.

Buy-to-let is a quite shockingly poor investment at the moment of course- but its time will come again. The housing market is always cyclical; although I would rather that house prices remained at a constant, affordable level, I doubt it's ever going to happen. Of course, calling the bottom of a bear market is difficult- but if you buy at the point when a market rental income would cover the payments on a 20yr repayment mortgage with enough left over to cover maintenance etc. then I think the odds are that you'll do alright:).

Whether a Chartered Accountant should be taking advice from an unemployed bloke who rents his flat is debatable- but once I've got a job I plan to save hard and attempt to call the bottom of the market- if I have kids by then I'll be buying property for them too:).

Yeah, and so would everybody else if that happens

Thefunkygibbons · 9 January 2006 at 10:41AM

Worrying about the kids is a natural thing for us parents

I may see whether I can pick up a flat or two once I have cleared my mortgage

However, I cannot se me being able to afford 5 by the time the kids need them, so that is why I will sell the current house

Besides, me and Mrs Funky will not want to be rattling around a 7 bed house once we do get rid of all the gang

Reading around the subject, it looks like kids will happily stay until they are 30+ these days anyway so I guess it is a long term plan

Thefunkygibbons · 10 January 2006 at 12:11PM

lisa_shaun wrote:

i have just taken my morgage out and at the moment i an unemployed my father went garentor, so i took out an interest paying morgage at 6.7% interest and got a £1800 cash back, well now i have been offered a job of which i am considering taken but know it would be very silly to keep this type of morgage on as there is obviously nothing coming off the balance, if anyone could advise me, the morgage advisor said if i wanted to change this i would have to repay the the cash back and i would get a lower interest rate 4.7% i think he says, also i was left £13.000 from my grandad and am curious should i put some of this monjey into the the morgage to reduce my monthly payment or invest it?

I would wait and see if you like the job and whether it is going to be stable

However, you do need to plan on paying down the capital and that 2% gap in interest rates is tens of £000 over the life of the mortgage, certainly much more than the £1800 cash back

Of the lump sum, I assume you have cleared all other debts

Then put some in a rainy day fund (say 6 months of your absolute must pay expenses such as mortgage, utilities etc) and then use the rest to pay down the mortgage. Otherwise, it will just burn a hole in the pocket.