Some basic assumptions:
- London real-estate market is very expensive.
- I used mortgage calculators "how much I could borrow".
- I cannot borrow enough to buy a home in an area I want to live in long term; the only places I can afford I could bear to live in for 2 years maximum.
- I'm thinking about taking a mortgage anyway to "step into property ladder"...
- ...and I borrow £250k for 25 years...
- ...and I buy the place worth £300k
The rationale being - over the 2 years I'll own the place I will repay 2 years worth of mortgage worth ~£25k, I'll also accumulate savings worth another ~£25k and increase my credit score, and borrow some cash from friends and family, and...
Eventually I might be in a position to buy a place that is at least semi-decent.
Now the question is: assuming the my £300k property is still worth in region of £300k what should I do?
- Sell it, repay existing mortgage, use the surplus to fund a new one.
- Any other shenanigans.
Asking here because it's hard to find a proper guide... Most of the first-time buyer guides don't discuss the length of time to live in a property. In my current circumstances I cannot afford a place I want to have (shared ownership might be an option) so I'm contemplating getting a "anything really" further away to make the plan real in years to come.
Alternative way of asking the question - how long should I pay the mortgage to break even / be positive when selling the property?
(assuming the real-estate prices stay still)
(can do a Google Spreadsheet to simulate different rates of depreciation / appreciation too)