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do i have to keep a mortgage? would i be daft to sell up, move further from the centre and not have a mortgage at all? god that's tempting.

27 replies

oranges · 02/08/2007 12:42

i have a flat that has sky rocketed in value, but i'm really enjoying working part time, and would love to have no mortgage so dh and i could work how we liked. is it madness to just sell up and buy somehting cheaper?

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RubySlippers · 02/08/2007 12:45

not madness if you can afford it
what would you do with the capital?
i would love to be mortgage free but i have another 20 years to go

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cat64 · 02/08/2007 12:46

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oranges · 02/08/2007 12:47

i'd just buy something that equlas the profit, so there'd be no capital left over, but no mortgage to worry about. my flat is on a main road with no garden and its getting impossible with a toddler.

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RubySlippers · 02/08/2007 12:47

Cat64 has some good points

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oranges · 02/08/2007 12:50

the thing i will need money for are school fees really - i want the option of paying if local schools don't work out. and holidays but they don't have to be ultra luxurious. other than that, we manage easily within our means.

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LadyMacbeth · 02/08/2007 12:53

It's not madness - dh and I downsized when I first stopped work to have dd1 so we could be mortgage free for a few years - but of course the value of our old house rose more than that of the new house. Now we are in another house with a bigger mortgage than ever but we hope to stay here for many many more years now!

The financial freedom of being mortgage free was lovely. But IIMO property is the best investment you'll ever make because the returns are so good - so I actually believe in stretching yourself to live in the most expensive property you can realistically afford. I know others wouldn't agree with this but still...

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Quattrocento · 02/08/2007 13:11

I agree with Lady Macbeth and Cat. Rather unfortunately we chose to do just what you are suggesting. We now live in a not-very-fashionable area in a quite-large-but-not-very-large house.

The upside is that we are mortgage-free. The downside is that had we bought in a nicer area with a mortgage, we would be much MUCH wealthier now. Financially, it was a mistake.

It kind of depends how long you want to be wherever you want to be, and what you think will happen to property prices both where you are now and wherever you want to be.

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lulumama · 02/08/2007 13:15

if you sell, buy something else, with no mortgate, and use a lot of the capital to pay for school fees, you are going to stymie your ability to move up the property ladder in the future , no ?

what if you decide to have more children?

as has been said, property is a good investment..why not release some equity and do a buy to let, or invest in another property, so you have your initial property aswell ?

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oranges · 02/08/2007 13:25

I'm pretty sure property prices in my area will rocket - its in central London. I only want to move because its hopeless with children.

It sounds silly, but I feel houses is one thing I never have any luck with - my whole life I've had to move every three or four years, and have now pretty much given up on the idea of having a 'family home' as such. I just want the rest of my life to be as stress free as possible. We also had considered keeping this place with tenants in and renting elsewhere ourselves.

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ninedragons · 02/08/2007 14:21

Personally, if I were in your situation I probably would rent out my flat and find something more family-suitable to rent myself. Central London is blue chip, and I really wouldn't be in a hurry to get rid of it if I could possibly avoid it.

This is a useful calculator for working out the financial merits of renting versus buying:

homefinance.nytimes.com/nyt/mortgageCalcs/calculator/rentVBuy/

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fridayschild · 02/08/2007 22:35

if you buy a house near a good state school (assuming the school stays good) at the end of your child's education you can sell the house and get back the premium you paid for living in the catchment area

If you pay for private schooling you never get the cash back

I vote rent out the central London pad and either buy or rent in the suburbs. You can always sell the flat in 6 months time if being a landlord is too much hassle

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foxcub · 02/08/2007 22:50

Orange - if you do this you need to accept that you'll probably never be able to afford to move back into central London. And in terms of financial planning, London prices will always appreciate a lot quicker than out of town ones.

We have been thinking of doing this, but if we did so, would rent out our London home and rent a house elsewhere (rent would be cheaper to), thus safegauding the equity in our expensive London house. That's a win/win situation.

My sister moved out of London a few years back and regrets the fact that she cannot ever afford to move back now.

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TheQueenOfQuotes · 02/08/2007 22:53

oh well I'm going to go against what everyone else says - I'd do it in a flash. If we could be mortgage free it would awesome - £650 a month extra!

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seb1 · 02/08/2007 22:57

In theory though although your cheaper property will go up less, you will save on your mortgage payments, with on an interest only mortgage of £100,000 over 20 years that could be £115,000

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oranges · 03/08/2007 11:42

It is weird that a mortgage is the only high interest loan we are encouraged to take out to be responsible. oh, I don't know. I do have a feeling I'll regret selling this place as we could never afford it again. but its off a main road, with no garden, and the local schools are awful.

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mummydoc · 03/08/2007 12:03

do you work in central london? because obviously you would have more commuting stress if you move out, why not rent out the flat and rent the kind of house you would like/could afford in the area you would like to move to and try it for 6 months, if life is great in the new house/area then sell the flat and buy a house in that area. then use some of the money you currently use on a mortgage to put into investments to pay the school fees in the future ....now why didn't i do that . personally i could never liv ein a big city with small children, but then i love living in the country surrounded by fileds with my dog, kids and chickens!!

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Azure · 03/08/2007 12:24

Areas such as Chiswick are more family-friendly and are almost as good an investment as central London, while being quite close. How far out would you have to move to achieve your goal?

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oranges · 03/08/2007 12:32

chiswick is lovely, but how easy is to to commute to kings cross from there? i have an idea its pita. i was thinking of moving north - harpenden or summat, but i shudder at the idea of being in the suburbs. i'd rather just move right out to the country, but that isnt possible with our jobs.

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foxcub · 03/08/2007 12:42

Chiswick tres expensive. But you can hop on either the Piccadilly Line or the District Line (change at Hammersmith to Piccadilly) and go straight to Kings X very easily.

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noddyholder · 03/08/2007 12:49

We have just sold and are planning to rent for a while and then buy mortgage free hopefully.Prices are starting to come down a bit here so fingers crossed.I would love the freedom too

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oranges · 03/08/2007 13:02

i've just had a look at chiswick and its not as expensive as I thought. we wouldn't be mortgage free, but we could sell this and get a house there for an equivalent sum. ((wanders away, pondering...))

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redtoenails · 03/08/2007 13:08

happiness is more important than making money on a house imo

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PippiLangstrump · 03/08/2007 13:31

I am sure you can sell that and get a bigger place still in london (maybe not as central) and be mortgage free or with a mini one.

we did it and I am telling you it's such a relief to be free.

life it is so much easier here with a child than it was before (not great area for/with kids) and 15min to kings cross. I can still have a life but got the parks and good schools and no money given to banks.

The best thing financially one could do is to be mortgage free.

Having said that I would not do it if it meant going somewhere you do not like/want to live in. oh and I would never ever rent again.

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oranges · 03/08/2007 14:49

pippi, are you in north london?

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PippiLangstrump · 03/08/2007 23:20

Oranges, I am yes, in barnet. It is suburbia no doubt and I was scared - but I am very happy with the choice. link to central london are very good, like I said, 15min to kings cross by overland.

It is unbelieavable how much more independent DD has become since having more space in the house, a big garden etc - she does not need me constantly to entertain her.

more to the point before as the area was not great for kids I was forced to go up and down the city. now I still do it but only when I feel like it IYSWIM. there's a big park in front of the house, and shops close buy.

and now we can think about saving for the kids, holidays without guilt etc

mind you I never thought 3 years ago that i'd write such things but hey I've turned into my mum!!!

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