Is it better to move up the property ladder or pay off extra on your existing mortgage?

Question

I have a one bedroom maisonette and find that I'm getting on okay. When I get married there will be two of us here with double the salary.

Is it better to move somehwere larger and get a larger mortgage

Or is it better to pay extra on this mortgage and try and clear some of it quickly before moving on?

Answer 1

I can tell you as a Long Term Single Parent, that it is FAR BETTER and was FAR BETTER for me to pay off and pay down the existing mortgage on the home I purchased rather than move on up to another property -- because ... I kept this home through out all the years I was on Active Duty, rented it out, and when I finally secured my Military Retirement -- NOW .. the home was within a few payments of being paid off in full - a REAL BLESSING considering that I had two young children to raise and DID Raise them to adulthood in the home.

FAR, FAR better to repurpose your space, or if you can -- to build on and/or remodel to obtain additional room -- and that is ONLY of you have the existing property space to do so.

IF NOT -- paying down the mortgage faster allows you to not just gain greater equity in your existing property, but also to have that as a Leverage in when you DO need to either move on up or remodel.

Answer 2

Hi there-
Ive been in the real estate business for 6 years and I would tell you that its better to pay down your existing mortgage to create wealth in the equity you will gain. If you get a larger house with a larger mortgage you will need at least a year to start seeing the mortgage go down and if you do a 100% financing you will not have much equity. Its a hard decision but I think your better to stay where your at and pay down the existing mortgage. Good luck!
If you have any questions email me or visit my website.

[e-mail]
www.americanhm.com/denielle.hass

Answer 3

Good question. Assuming you and your future wife like your current flat, I'd say pay off as much as you can on the existing mortgage for the first year. During that year, you and your wife can find out what it's like living together, how you share the space, what your ideal, larger place would be, etc. In the second year, instead of paying off, start saving - you will need bits of money for surveyors, removals, incidental expenses as well a bit of new furniture & redecoration of new place. At the same time, start looking together for somewhere bigger.

If you or she don't like your small flat, then start looking soon - always more important to live somewhere you like if possible, especially early in a marriage. I wish you luck and happiness.

Answer 4

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Answer 5

I am in a similar living situation about purchasing a property. It seems to me that I am going to go for a bigger property. Especially, right now the market is unstable and I want to take advantage of purchasing below market value. Why would you pay more debt off this property unless you plan on living there for the rest of your life? A problem can arise though if you owe more on the property than it's worth (if you purchased last year) then, you have no choice but to pay down some of the balance.

Answer 6

A general rule of investment is: "The more debt you make, the more capital you have to invest, and the higher are your potential earnings".

So if your aim is to maximise the earnings from your property (capital gains + subletting), and are willing to take on the risks associated with a bigger mortgage, then get into as much debt as you possibly can, ie. buy more/ bigger properties. If you would rather have peace of mind and safety, stick with your current property and pay off the mortgage.

In the end it comes down to balancing risks against opportunities, , like in any other form of investment.

Answer 7

Move up the property ladder if you can afford the payments. The gains will be maximised.