Extend or move?

[fifitot]

There are 4 of us (me, DH and 2 kids, one a baby) in a 2 bed terrace. We bought the house 10 years ago and it is now worth triple the mortgage (even in this day and age). So we have alot of equity.The mortgage will be paid off in 5 years.

However I love the area, my neighbours and the proximity of the kids' school. But we need more space desperately, not least another bedroom but in truth more than that as we only have a small yard out the back. It is a small house.

My dilemma is whether to try and sell and move or extend. I am scared about job security (me and DH in public sector so dont' know what the future holds)and tbh even with all our equity our 'new' mortgage would be quite high as we are in our 40s now so wouldn't get a 25 year loan by any means. Though at some point in the future DH would inherit a reasonable amount of money so there is always that to think of.

On the other hand if we don't move now then we will have even less time left to get a mortgage if we leave it!

Unfortunately not much room to extend other than into the loft which would give us a 3rd bedroom and potentially a bit of cupboard space but nowhere else in house to extend I don't think. Garden too small to go into.

Not sure how much a loft extension would be but I guess it would add value to the property so worth considering.

Really don't know what to do. So any advice would be welcome.

[thisisyesterday]

i would really look at moving to somewhere with another bedroom and some more outdoor space.

have you had a look at any of the property websites to see what you could get for your money?

[fifitot]

Yes have had a look and seen some nearby. I am just a bit worried about mortgage costs and the actual cost of moving. We don't have much actual money so would have to borrow the moving costs and use some of the house equity to pay for that eventually.

Reckon house worth 200K, mortgage is 50K so gives us 150 equity to put down more or less. 3 beds in the area we like are about 250 so we would need to borrow another 100k - doubling our current mortgage.

It's just that our mortgage is so small that any move to somewhere suitable will see us at least doubling our monthly mortgage payment and am a bit scared given state of jobs market (though am sure we will be ok) and about to have a large childcare bill every month when I return to work.

It's a real dilemma.

[thisisyesterday]

it might be worth seeing an IFA about it and just talking through potential costs?

[lalalonglegs]

#100k mortgage really not huge - you can get 3.8% deals fixed for five years which, if your mortgage only lasts 20 years rather than 25, is about #600 a month (don't know how much you earn but isn't enormous amount shared between a couple). Think of getting a better quality of life - and you will still have tons of equity.

[CarGirl]

I would start by making cut backs now and saving money hard and fast to see how much money you can afford to live on and be okay. That will give you an idea whether you could afford to take on a larger mortgage or not and theortically give you the money to move or extend at the same time!

we decided to extend up into the loft, mainly the cost of moving before the increase in mortgage was astronomical - stamp duty, solicitors, estate agents, moving, surveys etc etc and quite importantly we have low interest rates at the moment...what happes when they start to rise

We make the most of the space we have, using the height of the rooms for storage, being ruthless in what we keep, sell anything we don't actually use etc etc etc

Our dc also have the largest bedroom to share - we have 4 dc in a small 3 bed and then went into the loft but couldn't have a bedroom only a storage room but still makes a big difference.

[CarGirl]

Loft conversion about £20-£30k depending on what you need doing and where you live.

[fifitot]

Thanks for your ideas ladies. Will seek financial advice as suggested and also maybe get quotes from a builder.

I will have astronomical nursery fees for the next 3 years so maybe will have to put off until then.

[jbond]

I suggest staying put and getting a loan on the house to get an extension. that's what i did. we got the loft extended and we've now got another lovely room in the house! we got our loan from imperial blue finance who were just wonderful to work with.

if you extended with a secured loan (which would last around 5yrs like mine) and then by that time your mortgage will have finished and you'll have enhanced your house. perfecto!!

the economies going to get better and so house prices should go up was well (well thats what DH says!!) ;)

[Fizzylemonade]

How many rooms do you have downstairs?

If you are looking long term you need to imagine yourselves with older children.

We did a stepping stone house which was a 3 bed house, the bedrooms were all doubles and we have 2 children. But the garden and the downstairs were quite narrow meaning that it was all well and good when I had a toddler and a baby. Not so good as they got older.

We moved into our now forever house a year ago, 4 bed on a much bigger plot so the boys have a massive garden to tear round, DH now has an office so he can work from home on some days.

I would talk to a financial advisor about mortgages and talk to a builder about the cost of the loft conversion and weigh up the cost of that against moving. Unless you have a pot of money that you can finance that with you'll be borrowing money to do it.

Personally I'd be voting for a move.

[NightLark]

Blimey OP, you sound like me. We're dealing with the exact same issue, right down to the finances, ages (I'm 39, DH 42 and it was a bit of a surprise that we couldn't get a 25 year deal any more) and the public sector jobs.

I'm leaning towards moving as we're due DC3 in the summer, and the thought of the disruption of any building work is just awful.

But our 'dream extension' is a downstairs one to make a kitchen-diner, which would make the house much more saleable, as well as much more usable for us.

But wouldn't ultimately solve the issues of small plot, small house (despite being a 4 bed semi on paper. It's titchy.) So dithering. But as I say, leaning towards a move as that would actually solve some problems rather than papering over the cracks, IYSWIM.

[RubberDuck]

I would move. If you extend you really do it for yourself, these days you don't really "get it back" in the increased value of the house (at least that's what we discovered when we sold our extended house recently).

For us, it was okay because we got a lot of use out of that living space and it was worth the money we 'lost'. But it sounds to me that an extension on yours would only give you temporary improvement and it'd only be delaying your move, so I'd say moving would be a better option for you.

[frostyfingers]

If you extend, how long do you think your house would stay "suitable" - if it will last more than 5 years or so then it's worth looking into, less than that and I'd don't think you'd get a return - not a financial one as such, but the actual use.

We're thinking about extending rather than moving having been on the market for a wuile, but would have to stay put for at least 5 years to reap any sort of reward.