Given that there are strict rules around getting a mortgage, where usually the 3.5 times the combined income is what is given, is getting and spending the amount better than actually just getting a smaller mortgage and having a house paid off in full in just a few years?
I guess this is more of a long term investment question.
I have a fairly sizeable deposit. Approx 275k, should be near 300k when I am going to actually drawn a mortgage
Now I could buy a nice 3-bed semi in Cork for about 300-350k and have a tiny mortgage and own my house in say, 3-5 years easily.
Or I could apply to the bank and spend all the amount they are willing to lend.
Say I get 400k off the bank, then in theory I could spend 600k (if not more) on a house if I put all my savings into it.
My thinking is this...
If house prices rise by say 10% over the next 3 years (which is conservative imo) then a 10% rise of a house of 300k is a capital gain of 30k, but a 10% rise of a house worth 600k is a capital gain of 60k which being its ones primary residence is a tax-free capital gain. If this house is your forever home then the return will be greater again in 10-20-30 years...
I know that interest payments would be larger on the larger home, but would it be THAT much more?
Also, I know the market is not uniform, house prices in different categories will rise at different levels.
However, I think one gets what I am saying here. My parents would have said, get the small house and have it paid off faster, then upgrade, but I think a little bit the opposite way, generally, because Central Banks over the past 10-15 has folded the world with money and asset prices have followed and I genuinely believe this will continue in the short to medium term anyway as the world is hooked on debt and cheap money. (My own personal view, I may of course be very wrong)
I am a 41-year-old First Time Home Buyer with two young children.
Apologies if this question has been asked before.
I guess this is more of a long term investment question.
I have a fairly sizeable deposit. Approx 275k, should be near 300k when I am going to actually drawn a mortgage
Now I could buy a nice 3-bed semi in Cork for about 300-350k and have a tiny mortgage and own my house in say, 3-5 years easily.
Or I could apply to the bank and spend all the amount they are willing to lend.
Say I get 400k off the bank, then in theory I could spend 600k (if not more) on a house if I put all my savings into it.
My thinking is this...
If house prices rise by say 10% over the next 3 years (which is conservative imo) then a 10% rise of a house of 300k is a capital gain of 30k, but a 10% rise of a house worth 600k is a capital gain of 60k which being its ones primary residence is a tax-free capital gain. If this house is your forever home then the return will be greater again in 10-20-30 years...
I know that interest payments would be larger on the larger home, but would it be THAT much more?
Also, I know the market is not uniform, house prices in different categories will rise at different levels.
However, I think one gets what I am saying here. My parents would have said, get the small house and have it paid off faster, then upgrade, but I think a little bit the opposite way, generally, because Central Banks over the past 10-15 has folded the world with money and asset prices have followed and I genuinely believe this will continue in the short to medium term anyway as the world is hooked on debt and cheap money. (My own personal view, I may of course be very wrong)
I am a 41-year-old First Time Home Buyer with two young children.
Apologies if this question has been asked before.