Options - follow head or heart?

[happytoseeyou]

Hi

I currently live in a 3 bed house with myself DH, and 2 x kids both under 8 years old. I am very lucky to have come into an inheritance and I don't know the best way to make this work for me so could do with some opinions.

My thoughts so far are that whilst we have enough space at the moment, we could potentially outgrow the house as the kids get older. So to make long term use of my unexpected good fortune we could :

a) stay where we are and pay off a lump sum of existing mortgage
b) stay where we are and use the money to build an extension
c) move to a 4 bed house (increasing the mortgage)

We have renovated the house quite extensively in the last 3 years to make it to our tastes so it would be a bit of a tug of the heart strings to leave, but my head can see that when the kids get older they may need space we don't have (space to park a car/hang out with their friends etc)

So head or heart? or another opinion all together?

[Acrosstheuniverse123]

I would stay where you are and pay off as much of the mortgage as you can. You can always move when the children are older. The interest on the mortgage of a larger house would be substantial. If you have already sunk money into the house and love it, stay for the time being. You can reassess a few years down the line.

[ACurlyWurly]

I would stay and pay off a chunk of the mortgage, I would also look at over paying the mortgage slightly. It is amazing how much difference £50 per month can make if you have it! (search mortgage overpayment calculator on Money saving expert)
The lower your loan to value is the better the mortgage rates you will be offered and you can save even more money or reduce your term.

Stay in the house you have worked on and love and then if you need more space later on in life sell up and use the equity to buy your bigger home.

Having unexpectedly been made redundant a few years ago I am now very cautious and think the knowledge that you have a smaller mortgage is very reassuring.

Also, I can see your rational that the DCs may need more space but realistically will this happen? I planned all this extra space for my DS, in his early teens he spent most of his time at friends houses or in his room with his mates or out playing, at 16 he signed up to the army and now at 18 is no longer at home and lives in barracks, only needs space for one night when he is home at weekends and then his car is on the road. If he had gone to uni it would be a similar situation. We were going to extend but now there are just 2 adults in a 3 bed house and I am not sure it would benefit us (still want a conservatory though!)

[happytoseeyou]

Thank you both, for your thoughts. Very wise words!

The more I think about this maybe head and heart are not too far apart, I do love the house we are in and chose the kitchen / bathroom etc as higher end items as the plan was this was our forever home ... and actually what has changed. Other than we are very fortunate to be able to pay a paying off a lump sum of our existing mortgage - which logically makes sense.

[JoJoSM2]

The interest rates are very low. Especially if you’ve got lowish loan-to-value. It’d make more sense to invest the money elsewhere: ISAs, LISAs, pensions etc. Things like children parking in 10+ years, I would not consider.