19 Oct 05
come on you wise and knowledgeable lot assist me with my dilemma.
i am considering taking out a larger mortgage to move to what i hope would be my final home, this mortgage would put me on the limit of my borrowing capacity.but the new home would be hopefully everything we have ever wanted.
my wife though would settle for borrowing a bit more and extending our current house....
i have been advised to borrow as much as possible and move as this would make the best investment....
any advice??????
19 Oct 05
I need to do the same thing. We need a bigger house, and I know it's a good investment. On the other hand, in Northern CA, $600k gets you a crappy little 1500 square foot "fixer upper" with no property. I know I need to buy a bigger place, but I'm not thrilled with what I'll get if I double my mortgage payment. My quality of life will plummet, and my house will get just slightly bigger. On the other hand, what may seem like a HUGE mortgage payment now, won't be in 10 years. I guess my half-hearted advice is: go for it. It'll suck either way, but at least if you buy a bigger place, you'll have more money when you're dead.
19 Oct 05
i have been advised to borrow as much as possible and move as this would make the best investment....Man this has red flags written all over it !! Just to toss in my 2 cents worth, because I faced this decision about 12 years ago...to renovate or move (rebuild or buy). Locations means a lot, we really liked the piece of land we had built on years earlier. We were able to turn our bungalow into a nice two storey for the cost of the new piece of land and new construction. It's worth almost 4 times what it was back then, but markets do fluctuate.
any advice??????[/b]
You have to look at what equity you would have with this new home, your age has a lot to do with as well. You don't really want a high mortgage with little equity if you're closing in on retirement. If you don't mind moving, study the finances carefully until you're comfortable with the payment options. So many factors to consider.....hope it works out well for you! It was a great choice for us ! Hope this helps
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19 Oct 05
Originally posted by knightwesti currently have a nice house, 3beds, 2 reception, consevartory, garage
Where is this new house?
Where is your current house?
80ft garden. it is ideal for mine and the wifes work, my kids school.
my parents and in laws are also nearby. but it is what i would class as an industrial area. by simply moving 10/15 miles i am in the country which is something i have always wanted.
i missed the boat (so to speak) when i moved here 8 years ago i should of bought bigger then and i do not want to make the same mistake again.
i am 38 i owe 64k and have 10 years left on current mortgage but i am considering taken it up to 150k and back over 25 years.
if i remain i will probally borrow a further 20k...and put an extra 2 bedrooms in the attic.........😕
19 Oct 05
Originally posted by mr frostyIf that's all you have to borrow, I think you should definitely upgrade. At 38, you've got plenty of years to pay it off.
i currently have a nice house, 3beds, 2 reception, consevartory, garage
80ft garden. it is ideal for mine and the wifes work, my kids school.
my parents and in laws are also nearby. but it is what i would class as an industrial area. by simply moving 10/15 miles i am in the country which is something i have always wanted.
i missed the boat (so to speak) ...[text shortened]... emain i will probally borrow a further 20k...and put an extra 2 bedrooms in the attic.........😕
19 Oct 05
Originally posted by rbmorrisDitto.....the other option you'll be 63 before paying off mortgage(assuming no additional or accelerated payments). Even if the $20k adds another 5 years, you'll only be 53 and mortgage free, with plenty of options with all that equity.
If that's all you have to borrow, I think you should definitely upgrade. At 38, you've got plenty of years to pay it off.
19 Oct 05
Originally posted by rbmorrisDitto.....the other option you'll be 63 before paying off mortgage(assuming no additional or accelerated payments). Even if the $20k adds another 5 years, you'll only be 53 and mortgage free, with plenty of options with all that equity.
If that's all you have to borrow, I think you should definitely upgrade. At 38, you've got plenty of years to pay it off.
19 Oct 05
1 edit
Originally posted by mr frostyBest advice, sit down with a mortgage consultant and go over the figures with them. It may cost a wee bit, but money well spent now will save you in the long term.
i currently have a nice house, 3beds, 2 reception, consevartory, garage
80ft garden. it is ideal for mine and the wifes work, my kids school.
my parents and in laws are also nearby. but it is what i would class as an industrial area. by simply moving 10/15 miles i am in the country which is something i have always wanted.
i missed the boat (so to speak) ...[text shortened]... emain i will probally borrow a further 20k...and put an extra 2 bedrooms in the attic.........😕
Look at your income and expenses and ask youself what would happen to your standard of living if say interest rates were to rise, you or your wife was to lose job, your wife was to fall pregnant etc etc.
On a £150K mortgage at 5% interest then repayments will be in order of £625 (Interest only) and £877 (Repayment).
If interest rates rise 1% or 2%, then the figures become £750 or £875 (Interest only) and £967 or £1060 (Repayment).
For the interest only mortgages you will have to have some repayment option, such as endowment, pension etc in place to repay the loan.
Also your Council Tax will probably rise quite substantially as you new property will be in a higher bracket. possibly two or more higher than you are currently are in.
Too many variables to answer question concisely here, the main one being WHAT DOES YOUR WIFE WANT?
Edit - see how your Council tax would vary by using this site
http://www.voa.gov.uk/
19 Oct 05
1 edit
Originally posted by mr frostyAside from the pure fiscal arguements I would advise live where you will enjoy your life the most.
i currently have a nice house, 3beds, 2 reception, consevartory, garage
80ft garden. it is ideal for mine and the wifes work, my kids school.
my parents and in laws are also nearby. but it is what i would class as an industrial area. by simply moving 10/15 miles i am in the country which is something i have always wanted.
i missed the boat (so to speak) ...[text shortened]... emain i will probally borrow a further 20k...and put an extra 2 bedrooms in the attic.........😕
I have a £289k morgage (spread over 2 properties). I'm aware that interest rate rises could hit me hard. However you only live once so it is best to live the best quality life you can.
Loft conversions rarely pay for themselves never mind the interest on borrowed monies to build them.