Comments on: The {Great} Mortgage Payoff: Progress

By: Diane

Diane — Thu, 08 Apr 2010 16:16:11 +0000

Hi Laura,
I’m a first-time reader. I “found” you today via the wonderful SIF. I love your site and we share similar dreams of creating better lives for ourselves than the traditional corporate path offers.
Please forgive me if the things I’m about to ask have been covered in the past. I scanned your archives, but didn’t see the answers. I’m an American and am not familiar with the UK mortgage lending system, so the answers may be obvious to your UK fans.
Why are you trying to pay off a house that you intend to sell soon?
Wouldn’t you rather have the funds within your control so you can realize your dreams now?
For example, cash in hand could pay for several lovely home scouting holidays to Portugal, your mortgage holder usually won’t.
I dream of doing something very similar, but I would never prepay my mortgage. Instead, I’m working on accruing as much CASH as possible. Money that I can control and use – right now – and not have to wait until I’ve sold my house.
Thanks for taking the time to read this. I’d love to know more about your plans. I promise to dutifully read through every post thoroughly this weekend.

By: Alice at Simply The Nest

Alice at Simply The Nest — Mon, 08 Mar 2010 15:14:23 +0000

I think renting for a few months while you search for your dream (yellow) home is a good plan. I know what you mean about going back to renting after years of home ownership – the thought of having to ask permission to hang a picture on the wall! – but I would imagine being there in person for six months will make it far easier for you to find and buy the right place. If the rental schemes in Portugal are anything like England, you can probably find somewhere with a six-month minimum rental period followed by month-by-month rolling, which would give you a nice target date plus some flexibility.

I also love the B&B idea – we’re looking to do something similar in France, so we’ll need to make sure we buy somewhere with enough space to enable this.
Alice at Simply The Nest´s last blog ..Blog It Forward – What Inspires Me?

By: Amy aka ForDGRedial

Amy aka ForDGRedial — Thu, 04 Mar 2010 09:19:05 +0000

For me this is the eternal question in my head. At the moment we rent because we have no deposit. Our rent is just over £1,000 a month. But are we right to, long-term, want to buy? I think given we’d need to pay about £5-10k in solicitor fees etc we would have to choose a house that we would live in for over 2yrs for it to make sense…

Amy x
Amy aka ForDGRedial´s last blog ..Project 10 Pan – updated again

By: Teresa

Teresa — Wed, 03 Mar 2010 21:14:17 +0000

I can’t advise on the renting versus owning problem but maybe the answer will present itself when the time comes if you don’t worry about it too much.
Teresa´s last blog ..Dewi Sant!

By: Caroline

Caroline — Wed, 03 Mar 2010 16:48:25 +0000

Someone round the corner from me has just painted their house that exact same colour – it looks a bit wrong on a 17th century cottage, though ….
Caroline´s last blog ..Where In The World Wednesday: Torrevieja, Spain

By: Tony

Tony — Wed, 03 Mar 2010 13:23:14 +0000

@Simple in France: you are right. For example, a few years ago you could get 70+ THB to 1 GBP. Now you’re lucky if you get 50 THB. That’s a *painful* drop. I think for that reason it’s not wise to depend on a *single* source of income from your “home” country to fund a stay in your “away” country – unless there is a reasonable margin of safety (such as if the mortgage is already paid off). That income can be very welcome though. The other advantage of course is that in addition to the rental income, the capital appreciation of the home you are letting out can be substantial, depending on market variations. In the UK the *long-term* trend is up, and that will continue to be the case I believe. There is also something reassuring in having your investment in bricks and mortar – especially in these turbulent times. I have certainly been considering renting out to partially fund a stay abroad (I wrote something on the matter on this site), but I am also coming around to the notion that selling up would be a much less stressful option It doesn’t quite get rid of the currency fluctuation problem though. You can also run into a similar problem with interest rates – the rates in the UK suck at the moment. But then moving funds abroad can be equally problematic – just look at the Icelandic bank catastrophe. It ain’t easy managing this moving abroad malarkey is it? And, like Laura, I’m going to have to come to a decision one way or t’other at some point too

By: Simple in France

Simple in France — Wed, 03 Mar 2010 10:48:00 +0000

You know, I was just thinking too. You have to be careful when renting out a home (in one currency) and hoping to convert that income to another currency. Maybe you’d just be renting to pay the mortgage(without ever changing currencies)–in which case, you’re probably ok. But if you are using savings or income in one currency to pay for mortgage or living expenses in another, currency fluctuations can be a bummer. . .and those seem to be a sign of our times these days.
Simple in France´s last blog ..The nonconformist

By: anna

anna — Wed, 03 Mar 2010 10:17:04 +0000

@Laura – great decision! Wait until completion day – you’ll be heady with excitement! Are you going to rent or buy abroad?

@Tony – thanks for your comment – will look at link. We have always thought that we’d go somewhere in France (SW or South) mostly because I speak some French and love the landscape. But, I realise that I’m increasingly thinking of travelling aorund (quite extensively) and seieng what’s out there in other places. So maybe the scenario would be renting for a few years and see what happens. I agree with Laura – I’ve never been so indecisive

By: Tony

Tony — Wed, 03 Mar 2010 09:36:24 +0000

@Anna: “I think I *do* need to own my own home abroad… or do I?”

It depends Have you found somewhere abroad where you’d be happy to settle down, and feel comfortable buying? Probably you’ll have to travel around, try different countries and so on before you find somewhere you’d be happy buying. In some places it’s possible to buy a plot and have a house built to your specification (replete with solar heating etc if you wish) at reasonable prices. It’s also possible of course to rent some places abroad with fantastic facilities at reasonable prices. I take it the place you are currently renting is in the UK? Generally renting accommodation in the UK doesn’t give you much bang for your buck, compared to say Bangkok, Kuala Lumpur or Penang (or practically anywhere else it seems!). Do a Google search for Oakwood Residence Bangkok. I stayed there for around 300UKP a month (ignore the ridiculous prices they quote on their site by the way – things don’t work like that in Thailand!) – that place was all-inclusive 5 star luxury top floor apartment, complete with my own maid Where are you thinking of relocating to abroad?

@Laura: Yes! Can you taste the freedom yet?

By: Laura@movetoportugal

Laura@movetoportugal — Wed, 03 Mar 2010 06:53:47 +0000

@dreamer good point about the rent covering property costs; it’s ok when interest rates are low and mortgage payments low; when they go back up then it could be a {real} problem

@anna i think Tony is right too, he usually is

@tony we’re definitely selling {i’m not changing my mind again}
I’m usually SO decisive over things; this has been a strange one for me!