What should I do with my money - Preparing to buy a house
Discussion
I currently have a flat which I own, but looking to sell it and buy a place jointly with my girlfriend in around a years time.
I have around £1k per month in excess that I can save - Wondered what peoples thought's are on what I should do with it?
I should probably start with my current state of finances:
£120k owed on mortgage, flat worth £170k absolute minimum (It was valued at £200k by an EA but I thought this was a bit much)
No debt other than this
I have three months living costs in the bank, fairly secure employment (With three months notice period) and I have a decent unemployment insurance policy which provides a good level of cover against most things except being sacked through underperforming which I can't really see happening. My continuity fund could be higher given the current situation, but I'm happy with where it's at.
I've got around £14k in ISA investments, which cost £12k ish
I'm looking to buy a house worth around £300k ish, Girlfriend can raise 5% deposit herself, which I can match comfortably with the equity in my flat or by saving up for around 12 months. I'm fairly against ploughing all equity into the new place and not bothered about overpaying mortgages or joinltly depositing more than 10% - As I'd like to make 5-10% per annum in investments over a very long period rather than overpay on a pretty cheap loan - Big fan of compound interest here.
So I'm currently in favour of pulling out the equity (after paying 15k deposit for the house) and pushing that into investments / pension
It's tempting to keep ploughing my excess £1k per month money into my private pension as I'll remain a higher rate tax payer for the next 12 months but I'm likely just dip below the threshold after 12 months. The allure of free money - IE £10k into my pension costing £6k is hard to ignore, but I wouldn't be able to get to it for a while (I'm 30) My pension fund is just £16k currently (Private + company) so I do want to improve this.
The above could be a good reason to do a mix of pension investment + continue straight forward ISA investment
OR Do I just save up what I can as cash - use most of the new cash saved for the deposit on the next place - Dumping most of my equity when selling the flat into investments?
Or something else? Not sure what to do...TIA
I have around £1k per month in excess that I can save - Wondered what peoples thought's are on what I should do with it?
I should probably start with my current state of finances:
£120k owed on mortgage, flat worth £170k absolute minimum (It was valued at £200k by an EA but I thought this was a bit much)
No debt other than this
I have three months living costs in the bank, fairly secure employment (With three months notice period) and I have a decent unemployment insurance policy which provides a good level of cover against most things except being sacked through underperforming which I can't really see happening. My continuity fund could be higher given the current situation, but I'm happy with where it's at.
I've got around £14k in ISA investments, which cost £12k ish
I'm looking to buy a house worth around £300k ish, Girlfriend can raise 5% deposit herself, which I can match comfortably with the equity in my flat or by saving up for around 12 months. I'm fairly against ploughing all equity into the new place and not bothered about overpaying mortgages or joinltly depositing more than 10% - As I'd like to make 5-10% per annum in investments over a very long period rather than overpay on a pretty cheap loan - Big fan of compound interest here.
So I'm currently in favour of pulling out the equity (after paying 15k deposit for the house) and pushing that into investments / pension
It's tempting to keep ploughing my excess £1k per month money into my private pension as I'll remain a higher rate tax payer for the next 12 months but I'm likely just dip below the threshold after 12 months. The allure of free money - IE £10k into my pension costing £6k is hard to ignore, but I wouldn't be able to get to it for a while (I'm 30) My pension fund is just £16k currently (Private + company) so I do want to improve this.
The above could be a good reason to do a mix of pension investment + continue straight forward ISA investment
OR Do I just save up what I can as cash - use most of the new cash saved for the deposit on the next place - Dumping most of my equity when selling the flat into investments?
Or something else? Not sure what to do...TIA
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