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Would You Move Every Three Years Just to Make Money? Check with Your Mortgage Broker.

Could you? But would you?

A mortgage client this week was talking about her buying history. She bought her first home at 19, she borrowed 3.5 times her salary and bought a one bedroom starter home in 1987 for £27,500. Her father thought she was mad – but she was determined. She sold it a year later for £47,000 and bought a 2 bedroom flat for £85,000.

She’d been promoted, she wanted to be closer to the city and not on a small estate on the outskirts of town. She stayed there 8 years because she loved it, then bought a family 4 bed house for £165,000.

She always remembers being advised (although can’t remember by whom) to move every 3 years. This way you stayed ahead of the growth curve and ahead. 

That way you were always stretching yourself to borrow more and own a bigger home. 

The Upgrade Cycle

It’s got an actual name – The Upgrade Cycle!  

You buy your first home, it’s all you can afford, you love it – but soon you realise you’d love more space. Maybe you’ve been promoted, or your personal circumstances have changed, maybe you want more space – inside space and outside space. 

Your starter home was just that,  starter home. So after about three years, you start looking for a bigger place to upgrade to, either a bigger flat or a bigger house. This upgrade cycle will repeat itself a few times, as people work their way up to a house that they are happy with and that is big enough for their family.

Then as your life changes and evolves you continue to move, stretch yourself and move again. 

But always remember the costs – yes there are significant costs involved and they have to be weighed up against the benefit in the value of your new potential home. This is when it becomes tough, because often a decision to move home is a practical decision, supported with soooo much emotion .

This is where your calculator needs to come in. Keep your excitement in check and make sure you work out what your break even point?

You need to weigh up the sheer cost of moving versus the potential growth in your equity. A recent Bloomberg article reported that the annual U.K. house-price growth has reached its highest level in nearly seven years at 10.9%, according to the Nationwide Building Society.

Buying a home can be a smart move. Warren Buffett says real estate is a valuable asset “for a great many people,” and one self-made millionaire calls home-ownership “an escalator to wealth.”

So it makes sense to keep climbing that escalator – right? If three years feels too quick then review your situation at five years and keep the emotional decision separate from the numbers and your financial break even point. 

How Can Your Mortgage Broker Help?

So if you’re thinking of moving and want to make the most of this “mini boom” and act fast, work the numbers and please get in touch and I’ll talk you through how I can best support you achieve your goal.

Call me on 07969 859749 or email and let’s chat! Here’s my mortgage website – Five Valley Mortgages

Rachel x

** Think carefully about securing a mortgage against your home. Your home may be repossessed if you fail to keep up with the mortgage payments

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