Cash buy vs mortgage

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confused12

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Hi all,

All things being equal, and buying as ppr, if I had 200k cash, is it generally recommended to:

1. Buy a property worth 200k
or
2. Buy a property worth 400k, put down 200k and take a 50% mortgage

I understand there are lots of variables, but what are your thoughts on these options?
 
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Do you want to live in a 200k house or a 400k house?

Should you take out a mortgage if you can buy in cash?

If an individual wants to buy a house for €300,000, should they buy the house in cash if they have it saved? Or should they take out a small mortgage even if they have the 300k on deposit and use the mortgage money and invest the rest? Or say they have 200k ready to go but need a 100k, should...
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That's a fair question.

I think everybody would like to live in a house that's worth 400k rather than 200k.

But if that meant a large degree of financial loss/wage enslavement, then I don't think I'd be that keen unless in the long run it was really advantageous
 
This is a huge decision and you really should complete a Money Makeover template.

Key Post - Basic information required for the "Money Makeover" forum

It can be difficult, but please try to use a meaningful title in your thread For example "27 year old with mortgage arrears". You will get a much better and much more coherent answer if you give as much information as possible in your first post. For example, if you give your mortgage rate, it...
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Otherwise, it's a theoretical question and we would have to make a number of assumptions about your income, your age, etc. to give any meaningful answers.

The only general rule is that it's expensive, risky and disruptive trading up. If you can afford to buy your ultimate house now, you should do so.

Brendan
 
Thanks Brendan, I might do a monkey makeover template.

Are the costs of trading up associated with solicitor's/auctioneers fees etc?
 
confused12 said:
Are the costs of trading up associated with solicitor's/auctioneers fees etc?
Click to expand...

They are only a small part of the total costs.

Most houses need to be decorated and/or refurbished.

It's unlikely you will move from your old house straight into your new house, so you might have to rent in the meantime and/or pay storage.

And the risk is that you might sell your old home and not find a suitable new home for some time.

Brendan
 
- A 50% Loan-to-Value (LTV) would be viewed as conservative, subject to the Loan-to-Income (LTI) bein

- A gain in respect of the sale of one’s home is tax-free

- It’s nice to have a nice home

They’re so of the reasons one might go for the €400k option rather than the €200k one.
 
Continued here:

Buying a house - how big to go?

Age: 32 Annual gross income from employment or profession: 100k Monthly take-home pay: 5k Type of employment: doctor, contractor In general are you: (a) spending more than you earn, or (b) saving?: usually about half my income Rough estimate of value of home: nil current home Other...
www.askaboutmoney.com
 
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