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Houses- do we buy outright or take on a mortgage?

Houses- do we buy outright or take on a mortgage?

Old Aug 29th 2002, 9:58 am
  #1  
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Default Houses- do we buy outright or take on a mortgage?

Dear All

Some useful advice needed please

When we move to Perth we will have funds to buy a house outright hopefully. I hear that mortgage rates are partcularly high out there. Also thinking maybe of buying a smaller property to rent. Therefore questions are:

1. Is it best to invest your money wisely and not put all eggs in one basket in the house.
2. Id there money to be made from buying and renting.

Basically i am hoping to have another child and spend some time with current one, therefore likely to be out of the full time workforce for a few years. I would like to out the money that we bring over to good use. Would welcome any advice from people who live there, or have looked into this for themselves.

Thanks and regards


Nibbles
xxx
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Old Aug 29th 2002, 1:42 pm
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Default Re: Houses- do we buy outright or take on a mortgage?

I generally would not advise people to buy straight away. Rent for a while to:
- get settled
- get to know your city,
- be clear where you're going to be working
- get familiar with the financial scene in Australia.

Renting is good value compared to buying in most cities at the moment.

Jeremy


    >On Thu, 29 Aug 2002 09:58:20 +0000, NickyTurner <[email protected]> wrote:
    >Dear All
    >Some useful advice needed please
    >When we move to Perth we will have funds to buy a house outright hopefully. I hear
    >that mortgage rates are partcularly high out there. Also thinking maybe of buying a
    >smaller property to rent. Therefore questions are:
    >1. Is it best to invest your money wisely and not put all eggs in one basket in the
    > house.
    >2. Id there money to be made from buying and renting.
    >Basically i am hoping to have another child and spend some time with current one,
    >therefore likely to be out of the full time workforce for a few years. I would like
    >to out the money that we bring over to good use. Would welcome any advice from
    >people who live there, or have looked into this for themselves.
    >Thanks and regards
    >Nibbles xxx
    >--
    >Posted via http://britishexpats.com
 
Old Aug 29th 2002, 2:23 pm
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Default Re: Houses- do we buy outright or take on a mortgage?

If you have spare cash (not immediately ear marked for something else) and you are buying your own home then that cash should be used instead of a mortgage. Why pay mortgage interest at say 6% when all you get back on your savings is say 4% (that's a net loss of 2%).

If you need a large amount of cash in the near future for another purpose then you can always borrow against the equity in your house (at standard mortgage rates).
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Old Aug 29th 2002, 2:58 pm
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Default Re: Houses- do we buy outright or take on a mortgage?

Thanks for that- very useful and something that i have sort of deduced from comments i have read on this site. Now all i need is smoenoe to tell me where to live, and our PR might come in handy.

Cheers

Nicky

Originally posted by etlniwd:
If you have spare cash (not immediately ear marked for something else) and you are buying your own home then that cash should be used instead of a mortgage. Why pay mortgage interest at say 6% when all you get back on your savings is say 4% (that's a net loss of 2%).

If you need a large amount of cash in the near future for another purpose then you can always borrow against the equity in your house (at standard mortgage rates).
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