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Scarily Big Mortgage?

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tubbyman
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2009/07/27 23:33:51 (permalink)
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Scarily Big Mortgage?

Just at the wrong point in my life and indeed in the worst financial climate possible I've decided that I should ramp up my already massive mortgage even further and buy a different house.

Is it worth it?

Is the stress of having a very large mortgage worth it in the long run for a nice house in a nice area?

Would it be better to stay put, pay off the mortgage sooner and be secure?

What would you do?

I'd be swapping this house for one a similar size but a nicer position and in so doing, take the mortgage up the 300k +.

Half of me is thinking that it's insane and the other, more wreckless half is saying - do it, in a few years time it'll prove a decent investment.....

To put it in perspective - if I'd have stayed in my first house, I could have paid the mortgage off by now....


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    Blue_Lagoon3000
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    Re:Scarily Big Mortgage? 2009/07/27 23:55:14 (permalink)
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    If you can afford it mate go for it im holding back at the moment as im single and i dont need anything bigger i am just just renting an apartment at the moment im going to buy next year which exites me but until then im just going to rent.
    #2
    Faux Real
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    Re:Scarily Big Mortgage? 2009/07/27 23:59:28 (permalink)
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    If it were me I'd stay and pay it off.

    Although do you have kids?  Would they be better off in the nicer area?

    How secure is your job?

    Lots of things to consider I guess.
    #3
    BIGDOWNUNDER
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    Re:Scarily Big Mortgage? 2009/07/28 00:03:14 (permalink)
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    My first mortgage was for 270.000 and thats with Interest rates at 9%.  Its ok on a dual Income but if one partner loses a job your fcked!

    I'll cross that bridge after i've burned it.
    #4
    Dan Nukem
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    Re:Scarily Big Mortgage? 2009/07/28 00:16:40 (permalink)
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    What is the opportunity cost?
    #5
    galenkia
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    Re:Scarily Big Mortgage? 2009/07/28 00:20:59 (permalink)
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    Personally i would rather pay off the mortgage as soon as poss rather than get deeper into debt.
    #6
    BIGDOWNUNDER
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    Re:Scarily Big Mortgage? 2009/07/28 05:33:44 (permalink)
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    Just found out that weve paid enough off our Mortgage to buy a Hummer-the Mrs is not havin it!!!-will try sweet talking over dinner tonight, don't fancy my chances.

    I'll cross that bridge after i've burned it.
    #7
    TRAMP
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    Re:Scarily Big Mortgage? 2009/07/28 06:04:10 (permalink)
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    what's the monthly payament on a mortgage of that size?

    £2k?
    #8
    dementia
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    Re:Scarily Big Mortgage? 2009/07/28 07:24:09 (permalink)
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    Is the stress of having a very large mortgage worth it in the long run for a nice house in a nice area?


    I would have to say yes, do it when you are young. Many years ago,  when i bought my place my mortgage was £26,000, £170 a month, and i was sh1tting it lol, lots of sleepless nights but quite laughable now and well worth it imo.







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    #9
    tubbyman
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    Re:Scarily Big Mortgage? 2009/07/28 07:35:09 (permalink)
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    Neb

    what's the monthly payament on a mortgage of that size?

    £2k?
     

    About £1700 


    [font="verdana, geneva, arial, helvetica, sans-serif; -webkit-border-horizontal-spacing: 1px; -webkit-border-vertical-spacing: 1px; "]I would have to say yes, do it when you are young. Many years ago,  when i bought my place my mortgage was £26,000, £170 a month, and i was sh1tting it lol, lots of sleepless nights but quite laughable now and well worth it imo.



    that was one of my lines of thought - in 10 years time the remenants of a 300k wont seem like nearly as much.


    Personally i would rather pay off the mortgage as soon as poss rather than get deeper into debt.



    .....and that was the other


    There's a guy coming to value the house today so I suppose if I get the valuation I need I might go for it - if I dont, I wont. 


    Lap of the gods and all that.
    #10
    tubbyman
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    Re:Scarily Big Mortgage? 2009/07/28 07:37:51 (permalink)
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    Both our jobs are pretty secure - she's a teacher and I have my own business that is (so far) proving recession proof.

    If my job went t1ts up within the next 5 years we'd just have to pull the kids out of nursery and we'd still be OK. Being a teacher I reckon short of global catastrophe/gross misconduct her job is safe.


    #11
    rus1209
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    Re:Scarily Big Mortgage? 2009/07/28 08:35:20 (permalink)
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    £1700 - is that with a fixed rate mortgage?

    Can you\would you look at a variable rate.
    #12
    Red Bull
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    Re:Scarily Big Mortgage? 2009/07/28 08:44:58 (permalink)
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    rus1209

    £1700 - is that with a fixed rate mortgage?

    Can you\would you look at a variable rate.


    Why would you?

    Festar: You can't plead poverty with 2 cars. That's like a little Kenyan chap pleading poverty with 2 packets of uncle bens rice hidden under his bed.
    #13
    Aaron Hallett
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    Re:Scarily Big Mortgage? 2009/07/28 08:45:51 (permalink)
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    can you afford the new repayments or would you be living off the dry bones of your arse by trying to pay it off....


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    #14
    Stocky_Mike
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    Re:Scarily Big Mortgage? 2009/07/28 08:57:41 (permalink)
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    I have a friend who did exactly this.  £300k for a 4bed house for himself and his partner.. His mortgage repayments are £1600 a month, council tax is £2800 a year (or thereabouts) and his gas and electric are way over £150 a month..  He says to me everytime we speak "I wish I'd stayed in my £80k house and had cash to splash about".  It's a mistake.. Don't do it!!
    #15
    rus1209
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    Re:Scarily Big Mortgage? 2009/07/28 08:58:32 (permalink)
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    RB - We have the approx the same amount outstanding. We're making £200 per month overpayments and it only comes to approx 1k per month.

    I understand rates will go up at some point but that is a huge difference compared to £1700
    #16
    Red Bull
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    Re:Scarily Big Mortgage? 2009/07/28 09:04:24 (permalink)
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    rus1209

    RB - We have the approx the same amount outstanding. We're making £200 per month overpayments and it only comes to approx 1k per month.

    I understand rates will go up at some point but that is a huge difference compared to £1700


    Presuming he takes out a variable rate, that oddly due to the credit crucnh are lower than the fixed rates available at the mo. In a few months time when rates start to rise, I'm already seeing the fixed rates creep up a little, in the last few months. He will then get to a point where he can no longer get a fixed (paying 1700 per month, which already is stretching it, in his words) and he'd then be fcuked, no?

    Festar: You can't plead poverty with 2 cars. That's like a little Kenyan chap pleading poverty with 2 packets of uncle bens rice hidden under his bed.
    #17
    rus1209
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    Re:Scarily Big Mortgage? 2009/07/28 09:20:16 (permalink)
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    I appreciate where you are coming from and each to their own just saying there are always other options.

    Presumably fixed rates are higher as they are governed by banks and not the boe, therefore being money grabbing so n so's :) Not many mortgages being approved\people defaulting so they are trying to get there profits from some where. When the economic climate calms down I wonder if fixed rates will come down also.

    Kids in a nursery can cost approx 1k a month so having kids could cost 2k a month so there's some funds if needed - just speculating though...

    It just made sense for us at the time, not telling anyone what to do - honest guv,.
    #18
    Red Bull
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    Re:Scarily Big Mortgage? 2009/07/28 09:27:17 (permalink)
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    SVR's and fixed are both done by the bank. Historicaly SVR's are higher than fixed rates but, not at the moment due to the weird times we are in. Be sure of one thing, when SVR's rise they will go up quickly with them jumping above fixed rates, fixed rates won't drop anymore. IMO

    If you have loads of cash and or your selling the property soon, a variable would be a good option. If you are going to struggle to make the payments, like the op, i'd say a variable rate mortgage would be suicidal :-)

    Festar: You can't plead poverty with 2 cars. That's like a little Kenyan chap pleading poverty with 2 packets of uncle bens rice hidden under his bed.
    #19
    967Stuart
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    Re:Scarily Big Mortgage? 2009/07/28 10:09:59 (permalink)
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    Got to weigh up your options, Me and wife moved out of our flat about a month before the Market crashed (a couple of years ago) and we are so glad we moved into our house, It was a massive commitment and the hike in the mortgage payments was pretty scary at first, we went from paying £700 a month on our flat to paying £1250  a month on our house now.

    We don't out anywhere near as much as we used to, but its nice coming home from work and sitting down in a nice home knowing you are working your backside off for it, makes it worthwhile.

    My best mate and his misses moved into a nice big house but they are only paying the interest off , he told me last month he was paying £900 a month !

    Makes me feel depressed at the end of the year when i get a letter saying "Thanks for your payments of £15k , you have paid £2k off your mortgage !!! .....
    Must be even worse for my mates knowing they are basically renting their own house off the bank.

    Just sit down and work out all the costs and see if you could manage it -

    Mortgage payments
    Tax band
    Heating costs
    Electric
    etc.

    #20
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