What would you do - houses

Mr. Anderson · 3 Dec 2009 at 01:09

Get a caravan.

HangTime · 3 Dec 2009 at 01:47

I don't recommend saving much when you have big debts, normally a mortgage is more costly than the gain from most savings. I have both a mortgage and reasonable savings simply because our mortgage is fairly cheap (+0.59% tracker).

Of course, you may want to keep a little bit aside for a 'rainy day' as it were, but in general ploughing money into your mortgage is fairly sound, especially if it's a flexible product where you can claw back overpayments.

Finally be very careful with your choice of product as with interest rates being at an all-time low, it's extremely likely that they will rise significantly during the course of your mortgage term. Therefore make sure you would be able to cope with say a 3-5% rise in rates over the next couple of years when choosing your product

cheets64 · 3 Dec 2009 at 02:03

Buy/rent a flat, simple, a 2 bed is not exactly a big house, I mean you could only have 1 kid in the future and having a house means you are paying out more for decorating and possible problems with roofing, windows, plumbing, electrics in an older property. Maintenance of a flat is generally cheaper.

Mr. Anderson · 3 Dec 2009 at 02:34

cheets64 said:
Buy/rent a flat, simple, a 2 bed is not exactly a big house, I mean you could only have 1 kid in the future and having a house means you are paying out more for decorating and possible problems with roofing, windows, plumbing, electrics in an older property. Maintenance of a flat is generally cheaper.

I doubt living with your parents in a house puts you in the correct shoes for consultation.

danza · 3 Dec 2009 at 07:51

vonhelmet said:
Big and long.

YEAH BABY!!

+1

Freefaller · 3 Dec 2009 at 07:59

Would you sell the flat if you bought it or rent it out and keep it as an investment afterwards?

What's your lifestyle like? Could you cope with a flat?

I personally like to have some savings and put money aside - I put anything between £100-£200 (sometimes more depending on how things are) away every month (for holidays, savings accounts, ISA (I put in a lump sum at the end of the year, etc...). It's nice to have a bit of security for the unexpected, though of course you can always remortgage but that's up to you.

Only you know your lifestyle so you can gauge your decision on some of the replies from the people in this thread which are quite diverse but very interesting.

NotAGolf · 3 Dec 2009 at 13:03

Freefaller said:
Would you sell the flat if you bought it or rent it out and keep it as an investment afterwards?

What's your lifestyle like? Could you cope with a flat?

Keep it as an investment if we could afford it, that's fairly unlikely though I'd imagine unless we stayed there for a long time.

We could cope with a flat, but it wouldn't be as nice as a house. Everything just feels more restrictive.

Trying to calculate how much we could afford is the difficult part!

Skiddley · 3 Dec 2009 at 13:05

BIG. longer mortgage. Overpay when incomes increase, gain more capital appreciation when prices rise.

NotAGolf · 3 Dec 2009 at 13:07

Skiddley said:
gain more capital appreciation when prices rise.

Trying not to sound like a plonka here but what does this mean?

Vonhelmet · 3 Dec 2009 at 13:34

mpledge52 said:
Trying not to sound like a plonka here but what does this mean?

It means when the value of the house goes up, you own a more expensive house.

Which is utterly pointless, given that when the time comes any house you buy with the proceeds of sale of this house-of-increased-value will be spent on buying a house that has similarly appreciated.

The only way you'd ever benefit from capital appreciation is if you owned multiple houses, or were planning to sell up and rent or something.