New House Purchase. Am I going MAD?!?

tyllwyd · 22 May 2006 at 11:55AM

Martinslovechild wrote:

[This is the reason that i'm so undecided. We have really looking forward to being mortgage free, I just feel really pulled in both directions. The biggest reason pulling me in the direction of moving is that we'd be able to accue larger amounts of equity more quickly than our current property. By that, I mean - let's assume that our current property doubles in the next 10 years. After this time, it's then worth £440,000. If I purchase the new property, assuming the same rule, it's then worth £1,000,000 giving us a guaranteed minimum of £700,000 equity. Dunno - I may still be mad!!

If you take on the mortgage you will be a lot poorer over the next 17 or so years - then hopefully you will have a large pot of equity in your house. Do you think the money will be more useful to you now or then? Have you got a plan for what you want to do with it?

Is there a compromise - move to a slightly bigger house but not one that doubles your mortgage?

Martinslovechild · 22 May 2006 at 12:28PM

Tyllwyd,

Thanks for your comments - the interest charges would add up to a lot of cash which we could certainly do without paying out each month. A slightly bigger house would be a good comprimise providing that it has good size bedrooms (and is in the right area). Unfortunately, a lot of the time, moving to the 'right area' in itself means a jump in the mortgage for the same-sized house. I certainly don't want to consider moving to a bigger house in the 'wrong area'. Having lived previously opposite a drug dealer and kids with ASBOs, i'm not tempted to go back there!

Our other option is to do as you suggest and save/invest the cash until something else comes along in the future. I run my own investments in Stocks & Shares, so I figure that providing I make at least 12% a year (which is the long term average for the stock market), then i'll be outperforming property, so even if property increases in value in the future, I shouldn't be overly concerned that a move is unaffordable.

tyllwyd · 22 May 2006 at 2:16PM

Oh, and is going for a part-exchange with the builder the only way forward? Do you think that you might get more for your current house on the open market, or would other things cancel that out?

Martinslovechild · 22 May 2006 at 5:31PM

A part-ex is not the only option, but all options work out about equal. We could put it onto the open market at a higher price, but we're then taking the chance that a buyer comes along pretty quickly before somebody else puts down a deposit on the builder's property.

The house that we're interested in is the first one we've seen that we've both really liked, so to put our house up for sale on the open market and then to lose the other property would kind of remove the requirement to sell our current property. Renting really is not an option for me.

silvercar · 22 May 2006 at 7:44PM

I hope your not mad because we are about to do exactly the same thing!

Selling our home of 13 years to buy something bigger and in a better area.

We did think of buying something the same size as our current home but in a nicer area but didn't feel we wanted a larger mortgage to live in the same size house. Bying a bigger house in the current area wouldn't work because if we could find one it wouldn't get the same growth in value because of the area.

The only optons were stay put (which initially I was happy to do but OH wanted to move) or get a wacking great mortgage and double the property value. We are moving a little over a mile away! our current mortgage could have been paid off later this year, instead we will saddle ourselves with a mortgage over 300k. Totally mad I know!

If property does double in 10 years we would be able to sell the new home, pay off the mortgage, buy the equivalent of our current home and have half a million in the bank! Not that I'm relying on that happening, but we can dream!

Martinslovechild · 22 May 2006 at 10:08PM

Silvercar,

You sound like my doppleganger!! Good luck - let me know how you get on with your house purchase.

MLC.

nearlyrich · 22 May 2006 at 10:39PM

Martinslovechild wrote:

but we definitely need more space (for my CDs rather than kids!!).

Hey MLC not seen you around for ages....:beer:

How about getting all your music on a hard drive and streaming it around your current (almost) mortgage free home;)

jonesMUFCforever · 22 May 2006 at 10:44PM

ejones999 - i'm afraid that it would be out of the question. I'm 95% that the council would reject any planning application due to us living on an estate where all 40 properties are pretty much the same and any extension would cause us to block our neighbours' light. Building an extra floor would be ideal but the house would like a tad out of place methinks

Even a loft conversion or building an extra room over the garage??

Martinslovechild · 25 May 2006 at 11:48PM

nearlyrich wrote:

Hey MLC not seen you around for ages....:beer:

How about getting all your music on a hard drive and streaming it around your current (almost) mortgage free home;)

Hiya NearlyRich,

Hope you're keeping well

I'm a bit old fashioned really in that I still like the idea of owning a material object when it comes to my music. When CDs were first introduced back in the 1980's, I remember thinking that I didn't get as much enjoyment studying the artwork or the packaging as with an LP (mainly due to the sheer reduction in size) - not that you would really 'enjoy' a Britney Spears CD cover, but the packaging was fabulous, for instance, on record covers on the 4AD label; each and every cover on 4AD is a piece of art in its own right whether it's Throwing Muses, Pixies, Dead Can Dance, Lush, Clan of Xymox or Dif Juz.

With CDs, I believe that you don't really experience the 'whole' package, and with downloads I think that the entire music experience is degraded altogether. A band doesn't spend months, sometimes years (especially in the case of Kate Bush) in a studio to record an album only for a fan to buy track 3 on iTunes which is also compressed so heavily, it's a million miles away from hi-fi quality. Downloads really are a step backwards, until such a time as everybody has much faster broadband when compression rates can be reduced (and file sizes increase) so as to eventually exceed DVD Audio/Super Audio CD sound quality.

So, in answer to this sorry little lot, it's a great idea, but not for me, i'm afraid.

Martinslovechild · 25 May 2006 at 11:51PM

ejones999 wrote:

Even a loft conversion or building an extra room over the garage??

I think that the loft is too small to convert into a room. A room could be created above the garage, but it would be right next door to the neighbours and I'll probably start getting complaints when I'm playing my music at full pelt at 3am !!

New House Purchase. Am I going MAD?!?

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