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Buy or live mortgage free?

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    Buy or live mortgage free?

    Hi, this may sound like a strange question...

    Recently my Grandmother has moved into a retirement home and has offered that my wife and I can live in her 2 bed flat for free for as long as we like. The flat is very nice and in a great location. So, this all sounds ideal.

    However we are keen to buy our own house, larger than the flat and something that will be big enough for 2-3 kids in the future. Something like this wont be cheap - we have about a 20% deposit for the dream house. So do we stay in the flat rent and mortgage free for as long as possible and do something else with the money or jump in and buy once the prices bottom out and/or we need more space?

    The answer may seem obvious at first, but I'd be interested in different opinions about this... thanks
    Last edited by beaker; 9 September 2008, 21:43.
    Don't ask Beaker. He's just another muppet.

    #2
    Buy, because one day you will live rent and mortgage free. Who wants to be paying rent for ever out of their pension ?

    Comment


      #3
      The obvious answer is to live rent free for as long as possible, and save save save. The housing market is yet to bottom out, that's going to happen over the next couple of years, by then you'll have a sizable deposit to put on a cheaper house.
      The court heard Darren Upton had written a letter to Judge Sally Cahill QC saying he wasn’t “a typical inmate of prison”.

      But the judge said: “That simply demonstrates your arrogance continues. You are typical. Inmates of prison are people who are dishonest. You are a thoroughly dishonestly man motivated by your own selfish greed.”

      Comment


        #4
        Originally posted by beaker View Post
        Hi, this may sound like a strange question...

        Recently my Grandmother has moved into a retirement home and has offered that my wife and I can live in her 2 bed flat for free for as long as we like. The flat is very nice and in a great location. So, this all sounds ideal.

        However we are keen to buy our own house, larger than the flat and something that will be big enough for 2-3 kids in the future. Something like this wont be cheap - we have about a 20% deposit for the dream house. So do we stay in the flat rent and mortgage free for as long as possible and do something else with the money or jump in and buy once the prices bottom out and/or we need more space?

        The answer may seem obvious at first, but I'd be interested in different opinions about this... thanks
        I suspect there will be bargains to be had when the market bottoms out, with lots of choice and room for negotiation. When that time will come I have no idea, but the experts on here will know for sure

        Comment


          #5
          Originally posted by Bagpuss View Post
          The obvious answer is to live rent free for as long as possible, and save save save. The housing market is yet to bottom out, that's going to happen over the next couple of years, by then you'll have a sizable deposit to put on a cheaper house.
          The obvious answer is to buy the place off Gran for a suitably reduced price and then sell it for a profit later.

          Gran may not agree though.

          Comment


            #6
            Rather than have your Gran in a home, why not sell the flat - add the profit to your deposit - buy a big house with a granny flat out the back.

            Comment


              #7
              My inclination would be to live rent free and amass a sizable cash lump sum, when the market has bottomed out (which I don't think will be for a while) you will be able to buy with a small mortgage.

              As you don't have children yet and the flat is nice and has a good location it's an ideal opportunity to save a good quantity of cash in bank accounts. You're in no rush for either a home or more space so you have the luxury of being able to wait for the most favourable conditions.

              Comment


                #8
                Originally posted by TykeMerc View Post
                My inclination would be to live rent free and amass a sizable cash lump sum, when the market has bottomed out (which I don't think will be for a while) you will be able to buy with a small mortgage.

                As you don't have children yet and the flat is nice and has a good location it's an ideal opportunity to save a good quantity of cash in bank accounts. You're in no rush for either a home or more space so you have the luxury of being able to wait for the most favourable conditions.
                WHS

                Comment


                  #9
                  You need to make sure of a couple of things.
                  Is Granny going to have to sell the flat to pay for her retirement home?
                  Are you any good at saving?

                  As others have said, now is not a good time to buy. Live cost free at grans place and save like mad. Set up a bank account and pay into it what you would expect to pay as a mortgage or rent. Do this in such a way that it is easier to pay than not. Otherwise you will just spend the money.
                  By the time housing bottoms out you should have a sizeable sum put away and a saving habit.

                  Make sure gran isnt going to be asset stripped by the retirement home though.
                  I am not qualified to give the above advice!

                  The original point and click interface by
                  Smith and Wesson.

                  Step back, have a think and adjust my own own attitude from time to time

                  Comment


                    #10
                    Originally posted by The Lone Gunman View Post
                    You need to make sure of a couple of things.
                    Is Granny going to have to sell the flat to pay for her retirement home?
                    Are you any good at saving?

                    As others have said, now is not a good time to buy. Live cost free at grans place and save like mad. Set up a bank account and pay into it what you would expect to pay as a mortgage or rent. Do this in such a way that it is easier to pay than not. Otherwise you will just spend the money.
                    By the time housing bottoms out you should have a sizeable sum put away and a saving habit.

                    Make sure gran isnt going to be asset stripped by the retirement home though.
                    Thanks all for your answers...

                    Gran has a good stream of dividends coming in so I don't expect she'll need to sell the flat anytime soon. I currently save about 60% of my after tax income, should be able to get this up to about 75% more when I take rent out of the equation.
                    Don't ask Beaker. He's just another muppet.

                    Comment

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