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House Move/Future Financial Life - Help!!!

(9 Posts)
emma16 Wed 08-Jan-14 23:07:08

I could do with some good impartial advice please if possible & hopefully im posting this in the right place. I'll try & make this story short without all the big emotional tale!!
Me, my husband & 2 kids live in a small 3 bedroom mid terrace house..2 double rooms & a small box room, and my hubby has always wanted to move/upgrade to something bigger with more room etc. We've spent quite a few years being pretty skint, i stopped working in 2008 after our daughter was born to after her & our already born son, altho i do some part time cleaning jobs now, he has always worked full time, living on a budget etc like most people but nearly 2 years ago he changed jobs & has had a huge increase in wage.
It's took us until recently to really relax ourselves with spending as we've always been used to being tight with money so we've built up a bit of a savings pot which subconsciously is lovely to have & life's been pretty good for a while.
We saw a house (bungalow) which is on an estate we've always wanted to live on, been & seen it twice, hubby loves it, so do i although im not really happy that the bedroom that would be ours is actually smaller than the bedroom we have now, but nonetheless the rest of the house makes up for that & the outside. Now it's actually come to the crunch time of making a decision, we're totally stuck.
A bigger home for the 4 of us as we grow, kids get bigger & older, grandkids come along etc, is something we always thought we wanted. And we still do in a way, but i don't know if we're scared just because it's change, or if it's because subconsciously we don't want to leave where we are & the financial security of it?
The maths are this; our mortgage at the mo £76k, the new one potentially £170k. Hubby brings home £3400 a month, my little jobs £200 a month. We can get a mortgage for around £650 a month over 26 years, or obviously we could bring that mortgage term down but our payments would increase.
My husband works day & night shifts & has done since 19 years old, he's now 37, i don't want him working himself into an early grave.
If we stayed where we are we could reduce our term to 14 years paying around £540 a month, put more money into his works shares schemes that has seen a lot of people make a lot of money over the years & get our mortgage paid off probably even sooner than that. Which means by him being 50 we could be mortgage free & then he continues to work his full time job till around 56-57 & then semi retire. Im planning on going back into more solid employment hopefully once our youngest has got into high school.
Inheritences that we know will come our way will most likely, or hopefully, be just free money rather than paying a mortgage off as that should be gone by then, and can then be put away for retirement or to help our own kids whilst they're a young family.
If we move, all that changes doesn't it? Is it fair for our son to grow up in a tiny box room no bigger to fit a single bed in & about the same width of that free on the other side though? If we stayed where we are it means we could help them get their own house quicker than if we provided a larger house which may make them just stay at home longer?? Surely this would be better for them financially to get on the housing ladder younger?
Someone help us!!! It's a decision between head & heart & we've totally mashed our heads going over & over what's the 'right' thing to do.

CogitoErgoSometimes Wed 08-Jan-14 23:36:03

I think a bigger home in a nicer area sounds very sensible. Teenagers take up a lot more room than little kids and you can save yourself a lot of arguments if everyone has somewhere to disappear. Don't think a nicer home means they are less likely to move out smile Whether it's this bungalow you end up in or some other property, I don't know, but I think you'll appreciate having more space. Is there room to extend at some stage?

Financially speaking, spending £650/month on a mortgage out of a household income of £3600 leaves you with a huge amount of spare cash each month even allowing for bills and so on. Given that you say you're used to being careful with your budget, you'll probably be able to save several thousand each year and use it to pay lump sums off the capital. Being mortgage-free at 57 is therefore still very possible. Being optimistic, your household income is most likely to rise as you get more work and as your DH gets various payrises.

Downsides, it's a bigger financial commitment & interest rates could go up, jobs can be lost.

emma16 Thu 09-Jan-14 08:31:55

Im the kind of person who always looks at the 'what if's too, we've seen so many people get into financial trouble when they've had a bit of luck money/job wise as they've just got too big too quick & i really don't want to be like that. We've lost a few family members at a young age, one being a parent this year, and it's made us realise life can be short & should we just enjoy the big wide world & the ability to help our kids & support them alot more when they're growing up.
Your right we could easily up our mortgage payments to a lot more, but after years of being on a tiny budget & having limited chance to actually 'enjoy life' doing stuff, days out with the kids, holidays, not worrying if i spend over the food budget by £50, we're both abit nervous about having a huge mortgage so that we can clear it in a decent amount of time.

There's potential to extend into our loft at where we live now, our son could then go up there & that would give him more bedroom space, not huge but more than he has now.
Thank you for your reply CogitoErgoSometimes, you are probably right we should just bite the bullet now & go for it....

Mum2Fergus Thu 09-Jan-14 08:38:06

I can see your dilemma. The prospect of a bigger family home (bungalow too so potential to develop?) that is, based on your figures, affordable-Id jump at it! However your budgeting history is making you cautious. If it was me, I'd get all financials down on paper and play with the numbers a bit-what if interest rates go up, your income increases, DH income decreases...how does it all look then? At the end of the day it all comes down to how much risk you are prepared to live with.

DP and I had similar challenge about a year ago. We were committed renters but after our 2nd rental in as many years being put up for sale, and DS schooling starting this year, we finally took the plunge! Bank offered stupid amount in principle (both well paid jobs) but we opted for an ex Council house (albeit bigger than we'd lived in previously, huge harder and fab location) which we could still easily afford should one of us lose our jobs...such is my level if risk taking lol...

CogitoErgoSometimes Thu 09-Jan-14 09:40:45

£650/month isn't a huge mortgage really. My take-home is rather less than yours, we're a household of 2, I pay about £1000/month in a mortgage and we have lots left over for savings, holidays and grocery treats. If you're worried about early death, get mortgage protection or life insurance perhaps? If you're worried about job-loss or disability there is insurance you can take out for that as well. Interest rate rises can be combated by having a fixed-rate term on the mortgage. Lots of options.

The other point would be that nice housing estates with big bungalows are always popular. If you need to sell up at any stage I doubt you'd struggle to get a buyer. Also, if you wait a year or three, you could find that the price gap between what you have now and the place you want has widened.

emma16 Thu 09-Jan-14 10:35:22

Thanks for your reply's, it does help to have some independent advice rather than your own thoughts bashing around your head!!

The plus points with that new house is, it's a bungalow so potentially we could stay there forever, it's on probably the best estate in the town at the top with just fields out the back & very quiet, they have turned the garage into a double bedroom with an ensuite wetroom so again long term when you dont know what can happen in life, this could be very handy. Also with having an elderly grandmother this could be useful at some point, also when my husbands dad may need help in the future. What could be our bedroom is tiny, smaller than we have now, but it has a conservatory attached to it (quite large) & the thought is that we could knock into that & create one big bedroom for us at some point.
The plus point to doing work like that on that house is, it will add value to it because of all i've said above. There's no point doing stuff to our house where we are now as it will always be just 'a 3 bed mid terrace'.

We'd always have life insurance for the worst eventuality of course, my husband works in the power industry & they have plant life/security from the government for the next 20 years which gives him another 20 years full time work there. Never say never obviously. He has full pay for 6 months if he was in an accident & then half pay for another 6 months too.

I know your probably just thinking 'do it!!', but like many people when you've lived a pretty small humble budgeted life for so long, a big change like this is quite scary. Should we just appreciate what we've got, kids have what they have, and just enjoy life...or take life by the opportunity's & make it just that little bit better. I wish i could take a tablet to cure worry & indecisiveness!!

Mum2Fergus Thu 09-Jan-14 10:59:34

Mortgage aside, you can still live your existing budgeted life...if anything I'd recommend you do! Your lifestyle to date (and forgive me if I'm wrong) had been about securing a comfortable environment for your family, this move could easily be perceived as an extension of your existing choices.

CogitoErgoSometimes Thu 09-Jan-14 11:59:35

You see, I tend to think that the things we end up regretting most in life are not the mistakes we made or the crap that happened but the chances we passed up. So not 'just do it' in some reckless, caution to the wind kind of way, but that when a real opportunity presents itself, you'll never regret taking it. Good luck

emma16 Thu 09-Jan-14 14:05:18

That's very true CogitoErgoSometimes, that has really made me think. And yes your correct Mum2Fergus, a move to this new house could & probably would if i really think about it, make our lives as a family better in the long run. I didn't realise what a big decision moving house could be to be honest!! Thanks again smile

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