Mortgage free, is it possible?

C

Cabaiste

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My wife and I have been in the market to buy a house since late summer 2006 to no avail. We have seen a few that we liked and got outbid on a few and lost out on others due to some indecision and really for a long while there was nothing we liked in our price range so we just didn;t bother.

We recently married and recieved some very generous gifts from our parents. Between this and our own house deposit savings we have the bones of €135k on hand.

Her parents are strongly encouraging us to go out and buy quick, but my dream would be to sit on this money, invest it (hopefully wisely) for a couple of years and try and buy a house with the proceeds, mortgage free!

Is this just a pipedream?
 
With the current equity climate, investing is risky as shares a dropping across the board and when they will recover nobody knows.

Also at present, its a buyers market, so its in your favour to buy as with that amount of savings, a mortgage should be affordable. If there is a up turn in the market down the line, this will also cause an upturn in the market.

My advice is to go and see what you like and bid wisely to get the best deal...

Best of luck
 
Realistically I don't think you'll get to the point where you start off with no mortgage, I suppose it depends on the price of what you buy/build(?).

When you say a couple of years - how many do you mean? To make a significant return over 'a couple of years' you're going to have to take a risk - is that advisable?
 
I should have said, obviously we will continue to add our monthly saving to the balance that we have already accumulated which after paying our rent and bills is usually about €750pm.

Some other factors:

Our rent is very low, even for the town we are living in it is quite low. However we have no lease, only a verbal agreement with the landlord that we can stay there for another 12 months at least.

Houses in an estate that we are interested in are currently asking €340 - €355k The last house sold in this estate was for €362k in August / September last year. There are currently 3 or 4 available. We haven't looked at them or made any enquiries yet!
 
Cabaiste said:
We recently married and recieved some very generous gifts from our parents. Between this and our own house deposit savings we have the bones of €135k on hand.

Her parents are strongly encouraging us to go out and buy quick, but my dream would be to sit on this money, invest it (hopefully wisely) for a couple of years and try and buy a house with the proceeds, mortgage free!

Is this just a pipedream?
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No. But how much can you realistically accumulate based on your €135K lump sum and other savings/investments over two (?) years? Once you know that then that is obviously the budget for your mortgage free property. Anything above that will require borrowings.
 
Your dream will not happen if you crunch your figures. You would be investing 135k for 2-3 years. You are saving 750 per month, which will add 27,000 in 2 years. The houase you would like to buy will cost 300+. Your investment would want to do very well (i.e double your money) to enable you to buy mortgage free!
 
Sorry - missed the post above with the indicative acquisition prices. In the light of these I totally agree with the previous poster. Either accept the fact that you will probably need to borrow or wait a lot longer or else adjust your targets to your budget if you really want to be mortgage free.
 
Why not consider getting a mortgage whenever you decide to buy and pay it off quickly rather than wait till you have the cash. I feel you would end up chasing your house as in a few years the market will pick up again.
 
Just running some numbers and even saving €1000pm and earning 8%pa (both pretty aspirational!) it would take us 5 years to save up roughly €255k. Whether or not we could get what we want for that kind of money in 5 years time is anyones guess.

ClubMan said:
Why the preoccupation (if that's what it is) with being mortgage free?
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I wouldn't say I have a preoccupation with it, but I think if possible most people would like to be free of debt.
 
I built a house direct labour 3 years ago, saved a fortune, €80k less than the avergae builders quote we got. Thats 80K less mortgage. That was in the boom. If you were to that now, with the over supply of labour and supplies you'd make even bigger savings. Get you closer to the morgage free goal. Direct labour isnt easy but well worth most impoertan get a good engineer. Thats if building a house suits you
 
Cabaiste said:
Just running some numbers and even saving €1000pm and earning 8%pa (both pretty aspirational!) it would take us 5 years to save up roughly €255k.
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Even if that was realistic €1K p.m. at 8% over 5 years only totals c. €73K gross. See here.
 
I would assuming the OP is also including the lumpsum 135k, plus the interest on that over the same 5 year period at the (unrealistic) 8%.
 
it's hard to say where to put your money at the moment, we are seeing asset depreciation across every market, stocks, property, even the bond market is in crisis. Several banks have gone bust and are only open due to government intervention (although this has not happened in ireland). You could be mortgage free tomorrow if you bought in roscommon, where do you want to live? if you flesh out some of the details you'll get more accurate answers
 
dewdrop said:
Why not consider getting a mortgage whenever you decide to buy and pay it off quickly rather than wait till you have the cash. I feel you would end up chasing your house as in a few years the market will pick up again.
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Really now. Where is the moderation on this? Speculation on the property market of the worst kind. Flippant and with no basis. Pretty dangerous advice there to be allowed seep out.
 
cabaiste what about bidding really low now on your perfect house in perfect area

when they accept move in stop paying rent and overpay mortgage or break even on diff between savings and mortgage monthly amount, and pay off any extra savings and earnings you want against mortgage and everymonth you are paying yourself and getting nearer to mortgage free

good luck great position to start off married life in
 
groom said:
Really now. Where is the moderation on this? Speculation on the property market of the worst kind. Flippant and with no basis. Pretty dangerous advice there to be allowed seep out.
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Agree.
 
Invest the money for 5 years, by then the market will have bottomed out and you will be the only cash buyer in town. The world will be your oyster.
 
but my dream would be to sit on this money, invest it (hopefully wisely) for a couple of years and try and buy a house with the proceeds, mortgage free!

Is this just a pipedream?
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Far from a pipedream if you are willing to wait- see attached
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You can see that we are back to Nov 2005 prices and they are only going to keep on sliding back- just hang tight for a while and you will be laughing

Best of luck
 
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