House / Mortgage Advice
Discussion
Finance is not my strong point, so I'm after a bit of advice.
I currently have about a year or two left on my mortgage and have just started looking at other properties. I've always fancied a country cottage with a large garden, detached garage,etc. My current house is nice enough, in a quiet cul-de-sac, two minutes from work. In all honesty its fine for our needs.
As much as I'd like to buy a new place, I'd be looking to borrow another £150-180k to get the house I want. I'm 41 and I've been in my job now for 3 years.
There are a couple of things that are putting me off, these being interest rates (surely will begin to rise again shortly), and employment. The interest rates will rise and as a guide, I think the average is 5% over the last 15/20 years. How much should you really leave from your salary to cover yourself for future rises?
The other thing is the employment market. I have a degree in Computer Science, but this was obtained just under 20 years ago and is therefore pretty obsolete in my mind. I'm currently in a job where the only prerequisite was a degree, the job itself does not qualify you for anything, its a mixture of lab work and quality assurance. So the fear I have is based on not having a profession to fall back on should this job go down the pan.
I could stay here and live care-free (on the basis of being mortgage free) for the rest of my days as far as finances go, or I could jump into another 25 year mortgage and live in a nice place with a bit of land.
Has anyone else done something similar, if so how do you feel now, happy or regretting it?
Opinions?
Thanks
I currently have about a year or two left on my mortgage and have just started looking at other properties. I've always fancied a country cottage with a large garden, detached garage,etc. My current house is nice enough, in a quiet cul-de-sac, two minutes from work. In all honesty its fine for our needs.
As much as I'd like to buy a new place, I'd be looking to borrow another £150-180k to get the house I want. I'm 41 and I've been in my job now for 3 years.
There are a couple of things that are putting me off, these being interest rates (surely will begin to rise again shortly), and employment. The interest rates will rise and as a guide, I think the average is 5% over the last 15/20 years. How much should you really leave from your salary to cover yourself for future rises?
The other thing is the employment market. I have a degree in Computer Science, but this was obtained just under 20 years ago and is therefore pretty obsolete in my mind. I'm currently in a job where the only prerequisite was a degree, the job itself does not qualify you for anything, its a mixture of lab work and quality assurance. So the fear I have is based on not having a profession to fall back on should this job go down the pan.
I could stay here and live care-free (on the basis of being mortgage free) for the rest of my days as far as finances go, or I could jump into another 25 year mortgage and live in a nice place with a bit of land.
Has anyone else done something similar, if so how do you feel now, happy or regretting it?
Opinions?
Thanks
RowntreesCabana said:
I'm a natural worrier, so that's alien to me. Sad I know as you're only here once.
I was in a similar position 12 years ago , stay in a nice house paid off in full or move up to a bigger house .I moved , best thing I ever did , less commuting , more room inside and out , met loads of new people .
As a plus point but secondary to my reasons for moving , my old house is now worth about £50k more than when I sold it , whilst this one has gone up over £150k during the same time , those valuations on houses sold not estate agent valuations.
I guess it depends how much you want to move house. We moved recently to what I'd say is a forever house and I'm over the moon, it really puts a spring in my step to go home, do some work on the garden then crack open a beer and survey all the good work. Not sure if you can put a price on that.
£180k mortgage is a lot, are you on your own? If I were you I'd think about staying put for a year or too and seeing what you can save. In terms of the interest rates you'll get 100 opinions if you ask 100 people. I remortgaged last year and fixed for 5 fully expecting them to have gone up by now, so don't take my advice!
okgo said:
FredClogs said:
£180k mortgage is a lot!
Is it?Seems quite low to me and thus not exactly a huge issue, you can always think 'what if' but nothing would ever get done if we always let this rule every decision.
FredClogs said:
For a single guy I think it is, it's a grand a month ish. mind you I've lived in the north for a long time, I don't know what normal down there is.
I have a wife too. I thought the average house in the UK was about £180k these days so thought that was pretty much normal, or is it because I'm 41? A 25 year mortgage will be seeing me into the 60's, that's the main concern.I can't see me going for it unfortunately, I worry to much.
Edited by RowntreesCabana on Tuesday 23 June 16:03
Buster73 said:
I was in a similar position 12 years ago , stay in a nice house paid off in full or move up to a bigger house .
I moved , best thing I ever did , less commuting , more room inside and out , met loads of new people .
As a plus point but secondary to my reasons for moving , my old house is now worth about £50k more than when I sold it , whilst this one has gone up over £150k during the same time , those valuations on houses sold not estate agent valuations.
How do your circumstances differ though? How old were you when you did that, do you have a profession?I moved , best thing I ever did , less commuting , more room inside and out , met loads of new people .
As a plus point but secondary to my reasons for moving , my old house is now worth about £50k more than when I sold it , whilst this one has gone up over £150k during the same time , those valuations on houses sold not estate agent valuations.
I don't think £180k is a large mortgage. I've been living with a £300k one for the past 10 years.
I think the answer is how much you really want that nice place with a garden. If you don't scratch the itch you might regret it and you're only 41!
To put it in context I was 47 last time we moved. I wasn't keen on a move as I could see the end of the tunnel with respect to being mortgage free but, as usual, SWMBO prevailed. Originally it was to be an equal value move, I didn't want to increase the mortgage but it ended up being 4 x greater!
On reflection it is without a doubt the best move we ever made. Kids had easy access to their secondary school, the location is fantastic and we have integrated really well in to the local community. We had plans to retire to the South Coast but they've been shelved and we're staying where we are.
And the mortgage - I could pay it off but whilst interest rates are so low I can do other things with the cash!
I think the answer is how much you really want that nice place with a garden. If you don't scratch the itch you might regret it and you're only 41!
To put it in context I was 47 last time we moved. I wasn't keen on a move as I could see the end of the tunnel with respect to being mortgage free but, as usual, SWMBO prevailed. Originally it was to be an equal value move, I didn't want to increase the mortgage but it ended up being 4 x greater!
On reflection it is without a doubt the best move we ever made. Kids had easy access to their secondary school, the location is fantastic and we have integrated really well in to the local community. We had plans to retire to the South Coast but they've been shelved and we're staying where we are.
And the mortgage - I could pay it off but whilst interest rates are so low I can do other things with the cash!
Oddly enough, just done very similar.
Had a nice enough family home, managed to pay off the mortgage. We could have stayed put, especially with my own paranoia about job security, but decided we wanted more space and a bigger plot; better for us, better for the kids.
Borrowed a similar amount to how much you are considering - interest only to maintain lifestyle, and it's a low LTV so not too concerned. Will plan to pay off more when the strife goes back to work.
Definitely the right move - love where we are now (moved last summer). More space, more privacy, quieter.
In terms of contingency for my job security paranoia, I borrowed more than I needed to so I could keep a wedge of savings in case of emergency. Not everybody's cup of tea, but it helps me relax to have a reasonable sum of instant access, ready use funds, and the difference between the interest I am earning on my savings, and that I am paying on my mortgage, is not big enough to cause me any stress.
We only moved about 400m as the crow flies; we love the area. It's odd walking past our old house (and visiting our old neighbours) though.
Had a nice enough family home, managed to pay off the mortgage. We could have stayed put, especially with my own paranoia about job security, but decided we wanted more space and a bigger plot; better for us, better for the kids.
Borrowed a similar amount to how much you are considering - interest only to maintain lifestyle, and it's a low LTV so not too concerned. Will plan to pay off more when the strife goes back to work.
Definitely the right move - love where we are now (moved last summer). More space, more privacy, quieter.
In terms of contingency for my job security paranoia, I borrowed more than I needed to so I could keep a wedge of savings in case of emergency. Not everybody's cup of tea, but it helps me relax to have a reasonable sum of instant access, ready use funds, and the difference between the interest I am earning on my savings, and that I am paying on my mortgage, is not big enough to cause me any stress.
We only moved about 400m as the crow flies; we love the area. It's odd walking past our old house (and visiting our old neighbours) though.
Living with a big mortgage.. gives benefit of a nice house / happier family life, but creates risk if your income changes.
It's normal to focus on the risk. Weirdly though, having a big mortgage is my motivation to progress my earnings. It makes me work hard. When I work hard, good things happen and that makes me enjoy it.
Without the 'debt' alarm clock in the morning, I fear that I'd just become lazy and drift about not really achieving much. I know this sounds odd, but I guess we are all wired a bit differently. Personally, I quite like the 'risk', see it more as a motivator than a worry.
And if it all tumbles down and I can't afford the mortgage? Then f
k it, we'll sell up, take the equity out and buy another house. Not exactly the end of the world. Just another chapter.
I do have a mate though with a decent mortgage / decent house, but it seems to work the other way. He almost hates his house, resents that it keeps him chained to a day job he doesn't like and if he didn't have dependents would love to live in a smaller place with no debt and work as a green keeper on the local golf course.
There isn't a right answer, we are all wired a bit differently regarding what we consider risk and rewards.
It's normal to focus on the risk. Weirdly though, having a big mortgage is my motivation to progress my earnings. It makes me work hard. When I work hard, good things happen and that makes me enjoy it.
Without the 'debt' alarm clock in the morning, I fear that I'd just become lazy and drift about not really achieving much. I know this sounds odd, but I guess we are all wired a bit differently. Personally, I quite like the 'risk', see it more as a motivator than a worry.
And if it all tumbles down and I can't afford the mortgage? Then f
k it, we'll sell up, take the equity out and buy another house. Not exactly the end of the world. Just another chapter. I do have a mate though with a decent mortgage / decent house, but it seems to work the other way. He almost hates his house, resents that it keeps him chained to a day job he doesn't like and if he didn't have dependents would love to live in a smaller place with no debt and work as a green keeper on the local golf course.
There isn't a right answer, we are all wired a bit differently regarding what we consider risk and rewards.
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