Big house vs disposable income

[Roseybee10]

What would you do?

Big four bed detached house and not a lot of disposable income?

Smaller three bed semi detached with a lot of disposable income?

(We have two kids at moment).

[Northernlurker]

Well the key is the 'at the moment'. If you plan more kids then I would be looking for a smaller, cheaper 4 bed because you'll need the income. If sticking at 2 then go for the 3 bed and enjoy yourselves!

[NoArmaniNoPunani]

I'd pick the three bed, I'd want to give my children nice days out etc.

[SweetAndFullOfGrace]

Detached house. I hate sharing walls with other people.

[Roseybee10]

I think we'll be sticking at two but then they always say the third one is a surprise lol and I really don't want to move again. On the other hand I want to have nice holidays and be able to buy nice clothes after years of scrimping and saving and never really having a disposable income.

It's so hard to decide. I think ideally I want something in between - I.e a detached 3 bed with potential to covert the garage or a semi detached extended into a four bed but so few come on the market.

[SpecificOcean]

Can you keep looking for a large 3 bed perhaps one that has been extended? The price difference can be quite significant and you might not be getting much less space.
You wont want to keep scrimping forever- life can get dull.

[daisydalrymple]

This is where we are at roseybee, except we have 3 dc. Dh wants to move to a 4 bed, but we don't have savings and just enough equity for a 15% deposit on the cheapest 4bed in our area, but we would in effect be doubling our mortgage. I just don't want to take that risk. We're currently in a 3 bed semi, all decent size bedrooms with a spacious loft we could convert, with enough space in our bedroom to make stairs up to the loft and make a new doorway and partition wall to our room.

I would rather remortgage for the £15k or so to convert. I took a career break a few years ago and ds2 is 8 months old so don't see me returning to a well paid job for a few years. I would absolutely love a new 4-bed, our house isn't on the best street and it was in need of total renovation when we bought- dh wanted a project which he tired of and we also ran out of cash, so it's only half done and what we did do needs redoing, so I really dislike our house in its current state. But I'm fairly risk averse ao don't want the bigger monthly mortgage payments.

[daisydalrymple]

Phew, sorry roseybee I went on a bit there should have started my own thread! Didn't mean to hijack!!

[specialsubject]

what do you have in the way of savings in case of job loss (almost inevitable), illness (hopefully not) and so on?

[HighOverTheFenceLeapsSunnyJim]

Over stretching yourself on the mortgage can have a huge effect, what is your job security like?

[Roseybee10]

It's so hard to know what the best thing to do isn't it daisy?
There is just nothing coming on the market in between at the moment and we desperately need to move from our two bed flat. We've had an offer on it now and are just waiting for mortgage offer for the buyers but then we'll have a real deadline to find somewhere argh!

[Blu]

How will your income pan out over the next few years if all goes as expected?
Do you have security but not meteoric pay rise prospects (e.g teacher)

Do you both work now or is there capacity for you to go back to work and increase household income?
or what?

How old are your children?

What about schools?

Do your jobs come with pensions?

A house you can extend (e.g loft) may work out better value because you don't have to pay a new lot of stamp duty and moving costs - and your Council tax stays he same for a house you extend while you are still the owner.

Are prices rising fast in your area? Because where we are it has become harder to buy a bigger house, even with the increased equity, because the extra price bracket is so big in cash terms.

When you say 'not a lot' of disposable income, how tight would things be? To the wire and scrimping for every penny? Or comfortable - one not-extravagant holiday a year, the odd day out and eat out once every 6 weeks or so? Because spending 'a lot' of disposable income is money you will never see again and may be better invested in security, equity or savings for the future.

Running costs are higher on a bigger detached house: don't put yourselves in a potential debt situation.

If you can manage a life that is 'fine' but not extravagant and not put yourselves at financial risk, I would stretch to the detached house .

[Roseybee10]

It wouldn't be over stretching ourselves but it would mean we wouldn't have huge disposable income per month compared to a smaller house with a smaller mortgage.

I suppose it's the difference between one meal out a month, an older car and one holiday a year vs four meals out a month and a big holiday, a bigger, newer car and 3/4 mini breaks a year.

I'm a teacher so my job is pretty secure. I also only do four days so I could go back to five days if I needed to. Hubby's job is also pretty secure as he's quite high up in his work and not a lot of people can do what he does.

[Roseybee10]

Sorry crossed posts Blu.

[Blu]

In your shoes I would go for the bigger house.

If you have been in a flat, you will get so much more pleasure at home in a house - using the garden, having friends round instead of going out, having a BBQ, etc - especially as you have the good summer hols.

You can add holidays etc when you have the cash.

[Blu]

P.S I live in a 3-bed semi, and it's fine - v good in fact - but investment is investment and you might feel trapped once your kids are teens if you can't afford a bigger place and wish you could and have spent all your cash on cars and hols.

But I am thrifty by nature and hate to send money on cars beyond their basic ability to get from A to B and back again for as many mpg as possible.

[CloserToFiftyThanTwenty]

Are you into "house for life" territory, or is this a house for the next eg 10 years?

[mandy214]

I would also consider interest rates. They are likely to go up so factor in a potential rise in affordability. We stretched ourselves when we bought here but knowing income would go up within 2 or 3 years. I don't regret it and it sounds like we were struggling more than you will but it was miserable sometimes (mostly when I was forced to camp and everyone else was jetting off to somewhere hot!). I wouldn't have wanted to scrape by long term if I could help it.

[VivaLeBeaver]

We chose the smaller house. It means we can do stuff with dd. Days out. Holidays. School trips. Clothes to fit in with teenage mates. Uggs. New phones. Ipad. Teenagers are expensive

[Roseybee10]

It's probably our house Til retirement so at least 20 years. X

[CrispyFB]

My parents went for the bigger house and garden. Sure, we never had stuff like shiny new bikes for presents every Christmas like other children did (although we did have bikes, just second hand/refurb), didn't go on holiday very often either. But we had such an amazing garden it was worth it - when I think back to my childhood I remember playing in the garden far more than the material things I had. It was the envy of my fancy-trainer wearing friends

I guess my parents believed (as do I) that you can usually make do or cut corners/find bargains with material things, but it's impossible to make a plot of land physically any bigger.

[CloserToFiftyThanTwenty]

I'd go for the bigger house, in your circumstances

[Kitsmummy]

The bigger house situation honestly doesn't sound such a hardship, I'd go for that one!

[Toffeelatteplease]

No contest. Disposable income hands down!!!!

[HeadDreamer]

I would go for the bigger house in your shoes. Your tighter isn't that tight. One meal out a month, one holiday a year. That's pretty good.

[flossy101]

We are in the exact same situation. I am
Staying in the three bed and enjoying life with a large disposable income.