Hi I'm 29 and still haven't bought a place but I don't really understand the clamour to buy a house. I'm not that fussed about the concept of ownership so what are the other benefits? For example if I buy a flat for £70k now and sell it for £90k in two years have I really pocketed 20 grand or does it just go toward a new place? Does it make your next mortgage cheaper or something?
2006-11-18 09:20:13 · 9 answers · asked by micktravis 1 in Entertainment & Music ➔ Music
Sorry this should have gon in another section!
2006-11-18 09:22:06 · update #1
The best thing about owning rather than renting is that you're not burning your cash.
So - to take your example - if you buy a place for 70 and sell it for 90 then yes you have made 20k. Whether you choose to take the money and run, or put it into your next house is entirely up to you.
The ultimate point is to pay off your mortgage completely - although obviously that could take 20 years - but it's gotta be better than paying someone else rent for 20 years and having nothing to show for it. Instead you'll actually own your own home (rather than being in debt to the bank for the mortgage) and therefore will have an asset AND, even better, you won't have to pay either a mortgage or rent any more. Huzzah!
PS If you do decide to put your 20k profit into your next house, you can either buy a similarly priced house that you prefer to the one you have now, therefore yes your mortgage will be cheaper, or you can buy a more expensive house (bigger, better or in a nicer area) as you'll have more money to put down as a deposit and therefore the bank will lend you more.
Hope that helps :-)
2006-11-18 09:26:43 · answer #1 · answered by Anonymous · 0⤊ 0⤋
It depends on your life stage, and whether you feel ready for that kind of financial commitment. However it does make sense to buy at some stage. Most people use the equity on the place they sell to go towards the next property they want to buy. Don't feel pushed into buying if you're not ready, as mortgages are a big financial commitment.
2006-11-18 09:29:03 · answer #2 · answered by Jude 7 · 0⤊ 0⤋
You should think of your example the other way round. If you DON'T buy the property now for 70k you'll have to pay 90K for it in two years and you'll also have wasted all that rent in the meantime. That's what the property ladder is all about - just keeping up!
2006-11-18 09:26:50 · answer #3 · answered by Michael O 2 · 0⤊ 0⤋
The whole point is to make a lot of money for Estate Agents. If the price of your house goes up so does the price of the house you want to buy and so does the actual ££££'s given to the property hangers on such as Estate Agent, Valuers, Surveyors, Mortgage Companies etc. so you actually go down in the value scale in what you end up with or end up paying.
Your mythical £20k is actually more like £14k. the other £6k going in fees so your house you want is going to be lower down the scale unless you up your loan More money to others!!
2006-11-18 09:34:47 · answer #4 · answered by Anonymous · 0⤊ 1⤋
you build equity, rather than throwing rent money away. Plus in the states, you get tax benefits.
2006-11-18 09:23:00 · answer #5 · answered by Anonymous · 0⤊ 0⤋
in 3 years we made 45,000 profit on a house when we sold, its all about investment and living comfatably.
2006-11-18 11:23:23 · answer #6 · answered by The Exorcist 3 · 0⤊ 0⤋
To make the solicitors and estate agents even richer than they already are.
2006-11-18 10:19:09 · answer #7 · answered by checkmate 6 · 0⤊ 0⤋
CD's aren't that expensive are they, sod that! and who are "the Flat" I've never heard of them?
2006-11-18 09:31:28 · answer #8 · answered by Anonymous · 0⤊ 0⤋
a lot of people see it as a long term investment.... it will only be good when you need a pension, really
2006-11-18 09:24:40 · answer #9 · answered by Anonymous · 0⤊ 0⤋